Posts Tagged ‘market myths’

Market Myths Exposed: Inflation Is Not A Threat, Deflation Is

Market Myths Exposed: Inflation Is Not A Threat, Deflation Is 
Our free eBook reveals the 10 most common financial misconceptions 

Dragon breathing fire

By Nico Isaac, at Elliott Wave International 

Most people are confident they can recognize a myth when they hear one: Wearing a hat causes baldness; eating a bunch of carrots gives you perfect vision; ‘light’ cigarettes are better for your health than the regular kind.

But what about this sentence: Inflation is the number one threat to the US economy? Ask the mainstream experts, and this statement is in no way a fabrication of the truth; it is truth itself. Case in point, this recent insight from a reputable news source:

"Given the extraordinary amounts of government spending, we believe inflation is likely to rear its ugly head." (CNBC)

It looks reliable. It sounds reliable. But the reality is different. That fact is the subject of Chapter Three in Club EWI’s free educational eBook Market Myths Exposed, aptly titled "Myth No. 3: Worry About Inflation Rather Than Deflation."

With groundbreaking insight from EWI’s president Bob Prechter, this chapter reveals how the most vital financial players have been led right up to the water of easy money. Yet, like the saying goes, no amount of incentive — be it record low interest rates or trillions of dollars in federal bailouts — has gotten them to "drink." Here, the "Market Myths" chapter sheds light on this global leverage fast:

  • Banks: The premier dispensers of credit are about "95% invested in mortgages," which can fall in dollar value at the start of a crisis. Also, a chart of Credit Standards At All Banks since 1997 reveals a new trend of tighter lending criterion. Both are deflationary.
  • Consumers: The premier devourers of credit are paying off their balances. See: chart of Total Consumer Credit (Annual Rate of Change) since 2000. This is deflationary.
  • Private Equity: "Of the ten largest leveraged buyout deals since 2007, four have defaulted and two are in distress. Just in this small group, there is nearly one-half a trillion dollars worth of loans headed for the dump."
  • Small Businesses are self-liquidating; meaning, they create profits to pay back loans versus consumers. YET, "Market Myths" Chart of Bank Loan Availability to these small Enterprises contains a big, black arrow


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Individual Investors Have Jumped Into Another Fire

Individual Investors Have Jumped Into Another Fire

By Robert Prechter

[The following article is an excerpt from Robert Prechter's Elliott Wave Theorist.]

Moscow’s apartment building fire under control

First they bought into the “stocks for the long run” case and got killed. Then they jumped on the commodity bandwagon and got killed. Many investors are buying back into these very same markets, but others are running to what they perceive as safe “yields” in the municipal bond market. So far this year, individual investors have “poured a record $55 billion” (Bloomberg, 11/12) into muni bond funds, with the pace running $2b. per week in August and September; many other investors are buying munis outright. These must be the people who tell us that they can’t live without “yield” and also cannot imagine their city, county or state government going bust. But as Conquer the Crash warned and as The Elliott Wave Theorist has reiterated, the muni bond market is heading for disaster.

Municipalities have borrowed more than they can repay, they have pension liabilities that they cannot meet (up to a trillion dollars’ worth, according to Moody’s), and tax receipts are falling. The only reason that states haven’t failed yet is the so-called “stimulus package,” which took money from savers, investors and taxpayers—thereby impoverishing the people who live in the various states—and gave it to state governments to spend so they would not have to cease their profligate spending. But political pressures will eventually cut off this gravy train. In the 2010-2017 period, the muni bond market will become awash in defaults. The leap in optimism since March, which has shown up in every financial market, has fueled a retreat in muni bond yields to their lowest level since 1967 and narrowed the spread between muni bond yields and Treasuries.

This rush to buy municipal bonds is occurring right on the cusp of a dramatic decline in their values. While many individuals are loading up right at the peak so they can participate in the next major market disaster, smarter investors, such as insurance companies Allstate and Guardian Life, are getting out. Our recommendation for investors is 100 percent safety, and such a program does not include muni bonds.

******

This is a message and free e-book offer from Elliott Wave International:

You’ve no doubt heard the old mantras "stocks for the long haul," "diversify," "buy and hold."…
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Phil on MoneyTalk

 

MoneyTalk: Why markets aren't rattled by Trump's troubles

President Donald Trump has stirred up controversy around the world after meeting with NATO allies and Russia's Vladimir Putin. Yet, U.S. markets are still not far off their record highs. Phil Davis, options strategist and founder of philstockworld.com weighs in on how he's playing the market with options.

[In the next clip], Phil Davis discusses his trade strategy and how options can be used in the current market conditions.

...

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Zero Hedge

California Supreme Court Blocks Proposal To Split Up State From November Ballot

Courtesy of ZeroHedge. View original post here.

The California Supreme Court has shot down a measure that would have allowed Californians to vote on whether the state should be divided into three smaller states, dealing a serious setback to Venture Capitalist (and Elizabeth Holmes superfan) Tim Draper, who has insisted that the state is "ungovernable" in its current form and spearheaded a campaign to split it up.

The Court on Wednesday sided with an environmental group that had challenged the ballot measure, arguing that the reforms demanded by the ballot measure were "...



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Insider Scoop

Comcast Ends Pursuit Of Fox Assets, Will Focus On Sky

Courtesy of Benzinga.

Related CMCSA 'Convergence' Is Key: Credit Suisse Weighs In On The Telecom And Media Sector Raymond James: AT&T To Suffer Extend...

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Digital Currencies

Citadel CEO Says Bitcoin Still A "Head Scratcher" But Billionaire Lasry Sees $40,000 Soon

Courtesy of ZeroHedge. View original post here.

Ken Griffin, the CEO and founder of the Citadel hedge fund, has reiterated his negative stance on Bitcoin (BTC) in an interview with CNBC this morning.

Speaking at the Delivering Alpha Conference in New York, ...



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Chart School

S&P Firms Breakout As Tech Keep The Pressure On

Courtesy of Declan.

Given overnight news and Netflix disappointment I was surprised to see markets finish as strong as they did given comments on the economy by the Fed Chairman.

The S&P opened at support and 'engulfed' the prior day's trading; it's not a true bullish engulfing pattern as this is a reversal pattern and what we have is a breakout but it does contribute to a confirmation of the breakout.


The Dow Jones is inching towards channel resistance. In the context of other indices, it was a low key day...

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Biotech

How summer and diet damage your DNA, and what you can do

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

How summer and diet damage your DNA, and what you can do

Bright sun and fatty foods are a bad recipe for your DNA. By Tish1/shutterstock.com

Courtesy of Adam Barsouk, University of Pittsburgh

Today, your body will accumulate quadrillions of new injuries in your DNA. The constant onslaught of many forms of damage, some of which permanently...



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Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



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ValueWalk

Buffett At His Best

By csinvesting. Originally published at ValueWalk.

Bear with me as I share a bit of my history that helped me create SkyVu and the Battle Bears games. The University of Nebraska gave me my first job after college. I mostly pushed TV carts around, edited videos for professors or the occasional speaker event. One day, Warren Buffet came to campus to speak to the College of Business. I didn’t think much of this speech at the time but I saved it for some reason. 15 years later, as a founder of my own company, I watch and listen to this particular speech every year to remind myself of the fundamentals and values Mr. Buffett looks for. He’s addressing business students at his alma mater, so I think his style here is a bit more ‘close to home’ than in his other speeches. Hopefully many of you find great value in this video like I have. Sorry for the VHS...



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Kimble Charting Solutions

The Stock Bull Market Stops Here!

 

The Stock Bull Market Stops Here!

Courtesy of Kimble Charting

 

The definition of a bull market or bull trends widely vary. One of the more common criteria for bull markets is determined by the asset being above or below its 200 day moving average.

In my humble opinion, each index above remains in a bull trend, as triple support (200-day moving averages, 2-year rising support lines, and February lows) are still in play ...



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Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)

 

"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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