Bull Of The Year Award Goes To…..

Daily Chart August 3 2015

8/3/2015 - Another down day with the Dow Jones down 91 points (-0.51%) and the Nasdaq down 13 points (0.25%). 

.....this guy. I often concentrate on the bearish side of the story. Not because I am some sort of a doom and gloom permabear, but because my timing and mathematical work shows that we are in for quite a beating.

And whatever your stance might be, this guy takes it to a whole new level. Shortage of assets? I am literally speechless. He is more confident in the market's ability to surge higher than I am in my ability to wake up tomorrow morning. I wonder if he will still have a job if the market craters 20-30% from today's levels. It will be fun to re-visit this video when that happens.

Watch and decide for yourself. At least for now I am sticking with my overall bearish call.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years.  If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. August 3rd, 2015  InvestWithAlex.com

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Bull Of The Year Award Goes To..... Google

San Francisco: The Most Insane City In America?

crazy san francisco

And not in a good "Genius" kind of way. For two reasons. Real estate prices and tech valuations.

San Francisco Real Estate: 

Our friends and DHB had an excellent analysis on the subject matter here The Insanity that is San Francisco Real Estate: Median home price is 34% higher than previous peak bubble price and stands at $1,360,000.

San Francisco real estate is operating in a bubble only understood by venture capitalist running start-ups with no net operating income yet generating millions in funding phases.  Sell the sizzle and not the steak.  The gold tech rush is in full swing.  San Francisco real estate makes Southern California housing look like a timid and shy teenager in comparison.

This is sheer insanity. There is no other way to describe it.  Normal people, those who have not just sold their "idea" startup for a billion dollars, will be taken to the cleaners if they buy at today's prices. It is as simple as that.

Now, back to today's Tech valuations Uber valued at nearly $51B after funding: 

Mark Cuban is dead on in identifying Silicon Valley's Tech Bubble 2.0: Why This Tech Bubble is Worse Than the Tech Bubble of 2000.  At the end of the day, Silicon Valley has about as mush liquidity as California's dried up reservoirs. Something that Angel investors, venture capitalists and stock option millionaires are about to find out.

How big is this bubble? Consider the following. Uber's valuation went from $60 Million in 2011 to $51 Billion today(not a typo).  They must be making a ton of money.....right?WRONG. Bloomberg estimates that Uber showed $470 million in operating losses with $415 million in revenue last year. Plus, the company was set a major legal blow in California by requiring their drivers to be classified as employees. And as far as I am concerned, it is just a matter of time before other states and countries regulate Uber out of business to protect taxi drivers.

In other words, the valuation above is not only outrageous, it is, how should I put it, retardedly outrageous.

Back to Mark Cuban. It is now evident that most market pundits out there are dismissing Mark's view. And while Mark talks about Angel Investors and illiquidity in that market, his analysis can just as easily be applied to today's stock market. More about that in a second.

First, here is what most people don't realize about Mark Cuban. After selling his first business Mark became a heck of a trader and investor in the 1990's. His returns were so good at the time that Goldman Sachs tried to bring him in order to figure out what he was doing. This same ability helped him unload Broadcast.com for $5.7 Billion to Yahoo right at the top of the tech bubble. Here is what he thinks.

I have absolutely not doubt in my mind that most of these individual Angels and crowd funders are currently under water in their investments. Absolutely none. I say most. The percentage could be higher. Why? Because there is ZERO liquidity for any of those investments. None. Zero. Zip.

So why is this bubble far worse than the tech bubble of 2000 ?

Because the only thing worse than a market with collapsing valuations is a market with no valuations and no liquidity. If stock in a company is worth what somebody will pay for it, what is the stock of a company worth when there is no place to sell it ?

We often talk about the stock market, but we rarely look at this side of the equation. Mark is absolutely right. If you are an Angel Investors, good luck getting your money out. Especially when today's Silicon Valley's bubble bursts. Plus, the chances of hitting a good exit in tech are about as good as winning a lottery.

What's more, the bubble Mark Cuban has identified in the tech industry is the same bubble I see in the stock market. The drivers behind both are the same. The only difference is the amount of liquidity available.

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San Francisco: The Most Insane City In America?  Google

Investment Grin Of The Day

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Investment Grin Of The Day Google

My Outrageous Mistake: How We Missed Monday’s Bottom By 1 Point On The Dow

Daily Chart Uly 31 InvestWithAlex

7/31/2015 - A negative day with Dow Jones down 55 points (-0.31%) and the Nasdaq down 1 point (-0.01%)

Instead of complaining about today's valuation levels, allow me to illustrate to you just how accurate our timing and mathematical work can be. Not always, but often enough. If you would like to find out what the market will do next, please Click Here.

Long story short, in my weekly update to my subscribers I have suggested that the market was about to bottom on July 28th (+/- 1 trading day) and then bounce. Prior to Monday's opening I have indicated that we were about to put in a bottom at the open and then reverse (see below). At 17,425 (+/- 25 points).

We did just that 15 minutes into trading. I personally reversed my short position into a long position just 20 Dow points shy of the actual bottom at 17,399 ( in the final analysis our forecast missed by 1 point - outside of our range). Again, if you would like to find out what the market will do next, please Click Here.

MONDAY, JULY 27TH, 2015 -  INTRADAY UPDATES. 

(XXXX - Information not available in a free public forum).

PRE-MARKET: An incredibly important update to layer on top of our weekly update. I have spent the weekend re-calculating everything. Here are my findings.

  1. My original elliptical termination date of XXXX is still valid or just as valid as our XXXX date. We are dealing with a margin of error there. Meaning, once we bounce of off proposed bottom here, we should .........XXXX.
  2. My July 28th (+/- 1 trading day) TIME turning point is likely to arrive TODAY. In fact, I will put the probability of that happening at 75%.
  3. My extremely short-term work (which is more prone to error) suggests that we will see a short-term bottom here about 3 hours into trading or about 12:30 PM EST.

WHERE? My primary candidate right now or the best mathematical point is located at 17,425 (+/- 25 points). It is a strong, but a dirty point. Meaning, it can literally be anywhere within that range.

Elliptical support is at around 17,250 today. So, if you reverse into a long position, as I personally plan to do, you risk or opportunity cost should be around 200 Dow points. My advice, in terms of long-term or short-term investors remains intact here. .......... XXXX..............., then.........

My plan: I will attempt to reverse into a long position for this proposed bounce into.... XXXX. I will be running short-term calculations extensively throughout the day, in an attempt to identify the exact bottom, and I will let you know exactly when and where I am pulling the trigger.

Stay tuned. I should be commenting extensively today.

Finally, I will simply reverse from 100% short to 100% long DIA. Plus, get some call options with the profit I have just generated (very small allocation - as described in our weekly update). I will allocate 20% such profit to the "in the money November 2015 DIA call options". If this doesn't make sense, see weekly update TRADING section.

****CRITICAL -  PRE-MARKET 2: It appears we might open right into our target of 17,425. My thinking is, the market will bounce and then come back to test this level again to slightly lower about 2.5-3 hours into trading. With that said, if we slam right into 17,425 or lower at the open, I will execute the trade above. In case the market decides to start its bounce right thereafter. I will do that as soon as a down move stops and the market begins to bounce. I will not pull the trigger for as long as the market sells-off. Even if it goes below 17,400. Stay tuned.

9:45 AM EST: I executed all of my buy/sell orders when we hit 17,425 and DIA equivalent. I am now 100% long + some call options. I will outline all trades in our daily update.

10:15 AM EST Thus far, we have tested price support. However, my short-term TIME cycle has not arrived yet. It will in about 1.5-2 hours. That suggests we might re-test the lows at that point. That might be the last opportunity (if it arrives) to trade right at the proposed bottom if you haven't. However, as indicated below....I have already reversed.

11:45 AM EST: My short term TIME turning point arrives over the next 60 minutes. It would be a good place to set in a small double bottom. At the same time, we don't have to. The bottom can already be in as of this morning. If all of the above and below is true, this might be the last opportunity to reverse and/or go long.

July 27th, 2015: 1:50 PM EST: Considering market action thus far, I have a secondary short-term TIME turning point arriving in the first 60 minutes of trading tomorrow. It is likely we will stay at suppressed levels until then. A double bottom at around 17,399 is likely. Then, our proposed bounce should start.

I think the forecast/trading above and subsequent market action speaks for itself. Just pull up the Dow chart and compare. Also, the Nasdaq bottomed 50 minutes into its trading section the following day. Just as indicated in our 1:50 PM update. 

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years.  If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please NoteA bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. July 31st, 2015  InvestWithAlex.com

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My Outrageous Mistake: How We Missed Monday's Bottom By 1 Point On The Dow Google

COT Reports & Weekly Market Calendar – July 31st, 2015

COT Reports: If you are not familiar, the Commitments of Traders (COT) reports provide a breakdown of each Tuesday’s open interest for markets in which 20 or more traders hold positions. In other words, it gives us a preview of what commercial interests are buying or selling. As the theory goes, we want to be on the same side of the trade as the big guys.

While not a good timing tool, currencies, commodities and the stock market (to a lesser extent) tend to move in the direction of the bets made by the commercial players. Not always, but often enough.

Latest data, as of JULY 21st, 2015

Currencies: 

  • USD:  4K Long Vs. 78K Short - Significant short interest remains. No major changes.
  • Canadian Dollar: 63K Long Vs. 3K Short - Net increase in commercials net long position.
  • British Pound: 45K Long Vs. 31K Short - Remains neutral.
  • Japanese Yen: 132K Long Vs. 36K Short - Net decrease in short interest. A large long position in Yen remains.
  • Euro: 137K Long Vs. 11K Short - Significant long position remains. No changes.
  • Australian Dollar: 126K Long Vs. 1K Short- Significant long position. Slight increase in long position. Massive long position remains.

Conclusion: Based on the information above, commercial interests expect the US Dollar to decline while Canadian Dollar, Euro, Yen and Australian Dollar rally. British pound is neutral. 

Markets/Commodities/Volatility: 

  • E-Mini S&P 500: 223K Long Vs. 540K Short - Few changes. A substantial short position remains.
  • VIX: 75K Long Vs. 43K Short - No changes. A substantial long position suggests market turbulence ahead.
  • Gold: 85K Long Vs. 61K Short - Slight increase in net long exposure. Still neutral.

Conclusion: Based on the information above, commercial interests expect the stock market to decline as volatility surges higher. Gold is likely to remain within its trading range. 

Next Week's Market Calendar: 

  • Q-2 Earnings.
  • Monday - Manufacturing PMI
  • Friday - Unemployment & Payroll

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COT Reports & Weekly Market Calendar - July 31st, 2015 Google

Investment Wisdom Of The Day

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Investment Wisdom Of The Day Google

Is Our Historically Boring Market About To Get Exciting? You Bet

NYSE Spring

As the NYSE chart above illustrates, most of the primary US Indices have been compressing for more than a year. Some more than others. This is one of the reasons some people are calling today's stock market boring.

It is not boring, it is accumulating energy prior to a massive move. Higher or lower. To be exact, the stock market is doing the following two things.....

  1. It is doing its job by fooling 99% of investors out there. It is putting most traders and investors to sleep prior to a large move initiation. As of today, very few people believe that the Dow can exhibit a sustained 1,000 point move, let alone a rapid 5,000 point move.  Yet, that is exactly what the market is getting ready to do. As always, most investors will be caught with their pants down.
  2. The market is accumulating energy for a large move ahead. Up or down. The process is very similar to winding up a powerful spring. It appears to be stable and controlled, that is, until the spring snaps and a massive amount of energy is released in a rather rapid fashion.   Exactly the same thing is about to happen in our capital markets.

Luckily, my mathematical work allows me to know when this period of low volatility ends. To the day and to the point. If you would like to find out when that is, please Click Here.

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Is Our Historically Boring Market About To Get Exciting? You Bet Google

Are We In A Stealth Bear Market Already?

Daily Chart Uly 30 InvestWithAlex

7/30/2015 - A mixed day with the Dow Jones down 5 points (-0.02%) and the Nasdaq up 17 points (+0.33%) 

The stock market continues to behave as per our internal forecasts (subscriber section). If you would like to find out what happens next, please Click Here. 

Are we about to surge higher or take a massive beating? Let's take a look at both sides.

Bearish Case: 

It's nothing that we haven't talked about on this blog before. Think about it in the following fashion. The NYSE (largest index by capitalization) is already down 3-4% from its trading range initiation 13 months ago. The Dow set an important top on March 2nd, only to set in a double top on May 19th. The Dow Transports are flashing a major bearish reversal sign.

All of the above suggests that the market has been distributing for close to a year and once this distribution period ends, a new bear market leg will kick in. In fact, considering where the indices are today, it might have already started.

Bullish Case:

The primary argument on the bullish side is as follows.

  1. The market has been consolidating after a big 5.5 year run up: It is resting before the next leg up --- Fair enough. I will give them this one. That is technically possible.
  2. The market is not too expensive: I am seeing this over and over again. This time is different, this sector, that sector, accounting, statistics, etc.... People try to twist their numbers in a million different ways to justify today's valuations.  At the end of the day it is rather simple. Shiller's S&P P/E is at 27, the third highest level in history (behind 1929 and 2000). It is never different.....case closed
  3. We are in a secular bull market that has another 10 years to go. Wrong. If you study history you will see that bull/bear markets alternate in clearly defined 17-18 year cycles. The 2009 bottom was a mid cycle bottom, not a terminal point of 2000-2017 bear market. Meaning, we still in a secular bear market that will only complete in 2017-18. You can learn more about it here Market Cycles 

Who is right? 

I will let you come to your own conclusion. From my vantage point, the market has been in distribution for over a year now.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years.  If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please NoteA bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. July 30th, 2015  InvestWithAlex.com

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

Are We In A Stealth Bear Market Already?  Google

Mark Zuckerberg Begs For More Time At P/E Ratio Of 95

facebook

I am getting tired of going after Facebook (FB), but I continue to maintain that Facebook is one of the best longer-term short opportunities in the market. I have outlined it here. Why Short Sellers Should Drool All Over Facebook

Zuckerberg to Wall Street: Be Patient, Big Things Take Time

“What we decided was that over the long term, the ads and monetization would perform better if there was an organic interaction between people using the product and businesses,” Zuckerberg said.

I had a good chuckle over that one. I guess Facebook deserves more time, but not when their P/E is at 95 or when their market cap is higher than GE's. At that price they are nothing more than an incredibly overpriced pure speculation.

The primary thing investors must understand here is that Facebook is already feeding them promises. Maybe Instagram will reach 6 Billion users, maybe Oculus will change the way we live, maybe Facebook will grow at 20% per annum over the next 20-30 years in order to justify their current valuation. Or, maybe it will go the way of MySpace.

Point being, don't buy the hype if you value your money. Instead, consider profiting on the short side.

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Mark Zuckerberg Begs For More Time At P/E Ratio Of 95  Google

Investment Wisdom Of The Day

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Investment Wisdom Of The Day Google