On Friday The S&P Hit Its Highest Valuation Level In HISTORY – Find Out What Happens Next

Congratulations bulls, you have done IT.

In a quiet pre-holiday trading session the S&P has done something it hasn't done since 1929.

My data feed shows that in the summer of 1929 the S&P Shiller equivalent has topped out at 29.55. We all know what happened shortly thereafter.

Today, the S&P has quietly and without fanfare surpassed that top by clocking in a staggering valuation level of 29.59.

Now, by this point most bulls are surely screaming "You idiot, just look at the 2000 spike higher to 45". I understand and perhaps that is the reason most bull continue to anticipate this bull market to keep going for years and at least 50% higher.

Fair enough, but you have to take one very important factor into consideration. Earnings on the S&P, or lack thereof, during 1998-2000 period were highly distorted by overweight tech companies. I have seen very good research that adjusted that P/E all the way down to 26 - a more reasonable estimate (Google It).

Long-story short, here is what I am driving at.

It can be argued that on Friday we saw the S&P hit its highest valuation level in history. Higher than 1929, 1966, 2000 and 2007. 

What happens next? 

Well, bulls would argue, for a million different reasons, that this market will continue to run higher. Trump, bullish technicals, anticipated tax cuts, the FED, etc....  I won't argue against any of these points today.

I will simply point out that that for the stock market to justify today's P/E Ratio of 29.59 major economic/earnings expansion needs to take place in the very near future.

An unlikely outcome considering the fact that the FED has already pumped Trillions of dollars in stimulus into the economy over the last few years (QE + zero interest rates) and is now tightening. Failing to ignite anything but speculation and valuations in the process. Plus, as we have discussed so many times before Trump's Tax Cut Plan is dead on arrival. Find Out Why Trump's Tax Plan Is Dead On Arrival. 

So, the question remains.....what happens next? 

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 

Weekly Stock Market Update & Forecast – May 26th, 2017

State of the Market Address:

  • The Dow is once again above 21,000.
  • Shiller's Adjusted S&P P/E ratio is now at 29.59.  Arguably the highest level in history (if we adjust for 2000 distortions) and now above 1929 top of 29.55.
  • Weekly RSI at 68.59 - neutral. Daily RSI is at 60.85 - neutral.
  • Prior years corrections terminated at around 200 day moving average. Located at around 17,500 today (on weekly).
  • Weekly Stochastics at 74.25 - neutral. Daily at 94.01 -overbought.
  • NYSE McClellan Oscillator is at +16. Neutral.
  • Volatility measures VIX/VXX are once again sitting at or near their historic lows. Commercial VIX long interest was slightly lower this week Now at 74K contracts net long. That is to be expected as commercial traders took profit during last week's spike. We should see volatility long interest higher over the next few weeks. 
  • Last week's CTO Reports suggest that commercials (smart money) are shifting their positioning to net short. Short interest has descreased slightly during the week. Once again, due to profit taking. We should expect higher short interest numbers at the end of next week. For now, the Dow is 3X, the S&P is at 2X, Russell 2000 is at 2X and the Nasdaq is at 3X short. That is a significant short position against the market.

In summary: For the time being and long-term, the market remains in a clear bull trend. Yet, a number of longer-term indicators suggest the market might experience a substantial correction ahead.  Plus, the "smart money" is positioning for some sort of a sell-off.

ELLIOTT WAVE UPDATE:

Since many people have asked, I will attempt to give you my interpretation of Elliott Wave and how it is playing out in the market. First, I must admit. I don’t claim to be an EW expert, but I hope my “standard” interpretation is of help.

Let’s take a look at the most likely recent count on the S&P.

Explanation:

Long-Term: It appears the S&P is quickly approaching the termination point of its (5) wave up off of 2009 bottom. If true,we should see a massive sell-off later this year.

Short-Term: It appears the S&P might have completed its intermediary wave 3. If so, the market is now correcting in an intermediary wave 4. Once wave 4 is completed, the market will  push higher, perhaps to a new all time high in wave 5 of (5). If true, the above count should terminate the bull market.
If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 


ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it.


Daily Stock Market Update & Forecast – May 25th, 2017 – Elliott Wave Edition

ELLIOTT WAVE UPDATE:

Since many people have asked, I will attempt to give you my interpretation of Elliott Wave and how it is playing out in the market. First, I must admit. I don’t claim to be an EW expert, but I hope my “standard” interpretation is of help.

Let’s take a look at the most likely recent count on the S&P.

Explanation:

Long-Term: It appears the S&P is quickly approaching the termination point of its (5) wave up off of 2009 bottom. If true,we should see a massive sell-off later this year.

Short-Term: It appears the S&P might have completed its intermediary wave 3. If so, the market is now correcting in an intermediary wave 4. Once wave 4 is completed, the market will  push higher, perhaps to a new all time high in wave 5 of (5). If true, the above count should terminate the bull market.
If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 


ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it.


Daily Stock Market Update & Forecast – May 24th, 2017

State of the Market Address:

  • The Dow is once again above 21,000.
  • Shiller's Adjusted S&P P/E ratio is now at 29.45 Arguably the second highest level in history (if we adjust for 2000 distortions) and right behind 1929 top at 29.55.
  • Weekly RSI at 67.65 - neutral. Daily RSI is at 58.21 - neutral.
  • Prior years corrections terminated at around 200 day moving average. Located at around 17,500 today (on weekly).
  • Weekly Stochastics at 71.25 - neutral. Daily at 80.04 -overbought.
  • NYSE McClellan Oscillator is at 16. Neutral.
  • Despite this week's jump higher VIX/VXX remain near their historic lows. Commercial VIX long interest was slightly higher this week Now at 94K contracts net long. 
  • Last week's CTO Reports suggest that commercials (smart money) are shifting their positioning to net short.  In fact, short interest further increased as compared to last week. For instance, the Dow is 4X, the S&P is at 2X, Russell 2000 is at 2.5X and the Nasdaq is at 4X short. That is a significant short position against the market.

In summary: For the time being and long-term, the market remains in a clear bull trend. Yet, a number of longer-term indicators suggest the market might experience a substantial correction ahead.  Plus, the "smart money" is positioning for some sort of a sell-off.

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 


ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it.


Daily Stock Market Update & Forecast – May 23rd, 2017 – Elliott Wave Edition

ELLIOTT WAVE UPDATE:

Since many people have asked, I will attempt to give you my interpretation of Elliott Wave and how it is playing out in the market. First, I must admit. I don’t claim to be an EW expert, but I hope my “standard” interpretation is of help.

Let’s take a look at the most likely recent count on the S&P.

Explanation:

Long-Term: It appears the S&P is quickly approaching the termination point of its (5) wave up off of 2009 bottom. If true,we should see a massive sell-off later this year.

Short-Term: It appears the S&P might have completed its intermediary wave 3. If so, the market is now correcting in an intermediary wave 4. Once wave 4 is completed, the market will  push higher, perhaps to a new all time high in wave 5 of (5). If true, the above count should terminate the bull market.
If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 


ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it.


Daily Stock Market Update & Forecast – May 22nd, 2017

State of the Market Address:

  • The Dow remains below 21,000.
  • Shiller's Adjusted S&P P/E ratio is now at 29.30 Arguably the second highest level in history (if we adjust for 2000 distortions) and right behind 1929 top at 29.55.
  • Weekly RSI at 65.88 - neutral. Daily RSI is at 53.12 - neutral.
  • Prior years corrections terminated at around 200 day moving average. Located at around 17,500 today (on weekly).
  • Weekly Stochastics at 66.25 - neutral. Daily at 47.45 - neutral
  • NYSE McClellan Oscillator is at -5. Neutral.
  • Despite this week's jump higher VIX/VXX remain near their historic lows. Commercial VIX long interest was slightly higher this week Now at 94K contracts net long. 
  • Last week's CTO Reports suggest that commercials (smart money) are shifting their positioning to net short.  In fact, short interest further increased as compared to last week. For instance, the Dow is 4X, the S&P is at 2X, Russell 2000 is at 2.5X and the Nasdaq is at 4X short. That is a significant short position against the market.

In summary: For the time being and long-term, the market remains in a clear bull trend. Yet, a number of longer-term indicators suggest the market might experience a substantial correction ahead.  Plus, the "smart money" is positioning for some sort of a sell-off.

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 


ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it.


At What Point Do Media Talking Heads & Reporters Become The “Enemies Of The People”

Many questions, but very few answers. Let's very quickly explore.....

If Mr. Stalin would have won the November US election we would have been witnessing something bizarre all over America. Reporters and media talking heads all across America, by their thousands, would have been sent to labor camps of Montana......never to return home again.

Luckily for them, Mr. Stalin did not run.... or did he?

We have been strong supporters of President Trump ever since he launched his presidential campaign. In fact, we predicted his victory over a year ago InvestWithAlex Predicts: Donald Trump Will Be The Next President.

That is no longer the case. Our support was out the window as soon as he decided to bomb Syria/Afghanistan and bring us to the edge of a nuclear war with North Korea.  As well as flip flopping on most important issues that gave him the victory in November.

Still, that doesn't give the media the right to launch an all out, and fictitious, war on the Presidency. Just consider the following...

They found that the tone of some outlets was negative in as many as 98% of reports, significantly more hostile than the first 100 days of the three previous administrations:

So, what's the big deal?

In other words, good or bad, the so called "Deep State" and their corporate controlled media is going after the democratically elected Trump Presidency with the vengeance.

Now, our extreme, some would even say radical view on MSM is very well known.

And that brings us to the slight variation of the question above.

If these wild dogs are viciously attacking the very foundation of the US Democracy, while promoting and cheering countless wars, even a nuclear war, should they be put down like the parasites that they are?

Unfortunately, I don't have the answer to that question. But, I have a feeling we might find out soon enough that Mr. Stalin was right all along. Finally, to add insult to injury....

Journalists Drink Too Much, Are Dumber Than Average, Study Finds

Makes sense. 

Weekly Stock Market Update & Forecast – May 19th, 2017

State of the Market Address:

  • The Dow remains below 21,000.
  • Shiller's Adjusted S&P P/E ratio is now at 29.26 Arguably the second highest level in history (if we adjust for 2000 distortions) and right behind 1929 top at 29.55.
  • Weekly RSI at 64.40 - neutral. Daily RSI is at 48.90 - neutral.
  • Prior years corrections terminated at around 200 day moving average. Located at around 17,500 today (on weekly).
  • Weekly stochastics at 77.95 - neutral. Daily at 24.82 - approaching oversold.
  • NYSE McClellan Oscillator is at -32.28. Neutral.
  • Despite this week's jump higher VIX/VXX remain near their historic lows. Commercial VIX long interest was slightly higher this week Now at 94K contracts net long. 
  • Last week's CTO Reports suggest that commercials (smart money) are shifting their positioning to net short.  In fact, short interest further increased as compared to last week. For instance, the Dow is 4X, the S&P is at 2X, Russell 2000 is at 2.5X and the Nasdaq is at 4X short. That is a significant short position against the market.

In summary: For the time being and long-term, the market remains in a clear bull trend. Yet, a number of longer-term indicators suggest the market might experience a substantial correction ahead.  Plus, the "smart money" is positioning for some sort of a sell-off.

ELLIOTT WAVE UPDATE:

Since many people have asked, I will attempt to give you my interpretation of Elliott Wave and how it is playing out in the market. First, I must admit. I don’t claim to be an EW expert, but I hope my “standard” interpretation is of help.

Let’s take a look at the most likely recent count on the S&P.

Explanation:

Long-Term: It appears the S&P is quickly approaching the termination point of its (5) wave up off of 2009 bottom. If true,we should see a massive sell-off later this year.

Short-Term: It appears the S&P might have completed its intermediary wave 3. If so, the market is now correcting in an intermediary wave 4. Once wave 4 is completed, the market will  push higher, perhaps to a new all time high in wave 5 of (5). If true, the above count should terminate the bull market.
If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 


ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it.


Daily Stock Market Update & Forecast – May 18th, 2017 – Elliot Wave Edition

ELLIOTT WAVE UPDATE:

Since many people have asked, I will attempt to give you my interpretation of Elliott Wave and how it is playing out in the market. First, I must admit. I don’t claim to be an EW expert, but I hope my “standard” interpretation is of help.

Let’s take a look at the most likely recent count on the S&P.

Explanation:

Long-Term: It appears the S&P is quickly approaching the termination point of its (5) wave up off of 2009 bottom. If true,we should see a massive sell-off later this year.

Short-Term: It appears the S&P might have completed its intermediary wave 3. If so, the market is now correcting in an intermediary wave 4. Once wave 4 is completed, the market will  push higher, perhaps to a new all time high in wave 5 of (5). If true, the above count should terminate the bull market.
If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here. 


ATTENTION!!! Please note, we have moved most of our free editorial content to our new website MarketSpartans.com Please Click Here to view it.


If Trump’s Tax Cuts Fail Will The Stock Market Rally Retrace Below 2016 Lows?

Over the last few months we have argued that Trump's ""Phenomenal" tax cuts are dead on arrival.

And that was before North Korea, Comney and an all out media/political war Trump has gotten himself into. Now we get this....

YES, fight he will, but that is no longer relevant. As David Stockman so often says, there is "no snowball's chance in hell on a hot day" that Trump's healthcare bill will pass, let alone his ambitious tax cuts. As Trump's impeachments odds show, he will be lucky enough to survive his first term, let alone pass anything in today's openly hostile Republican and Democratic Capital Hill.

And that begs the question......if Trump's stimulus is nothing but a pipe dream, what the hell is the stock market doing at today's valuation levels? And if he fails, will the stock market retrace below 2016 lows?

Well, first, allow me to remind you that Shiller's Adjusted S&P P/E Ratio is at 29. The second highest in history and right behind 1929 top (if we account for 2000 top distortions).

And if earnings are not surging higher, due to stimulus or tax cuts, prices must come down. Even crash. At that juncture it wouldn't be a question of "IF" Trump's rally gets retraced, but rather, where will the bottom be.

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here.