Daily Stock Market Update & Forecast – July 12th, 2017


State of the Market Address:

  • The Dow remains well above 21,000.
  • Shiller's Adjusted S&P P/E ratio is now at 29.90.  Arguably the highest level in history (if we adjust for 2000 distortions) and now above 1929 top of 29.55.
  • Weekly RSI at 74  - overbought. Daily RSI is at 61.10 - neutral.
  • Prior years corrections terminated at around 200 day moving average. Located at around 17,700 today (on weekly).
  • Weekly Stochastics at 89.13 - overbought. Daily at 67.71-neutral.
  • NYSE McClellan Oscillator is at -10. Neutral.
  • Volatility measures VIX/VXX are once again sitting at or near their historic lows. Commercial VIX long interest remains the same. Now at 70K contracts net long. 
  • Last week's CTO Reports suggest that commercials (smart money) are shifting their positioning to net short. Short interest has decreased slightly during the week. For now, the Dow is 6X, the S&P is at 3X, Russell 2000 is at 2X and the Nasdaq is at 3X short. That is a substantial 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 – June 20th, 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 and now 4. It appears the market is now pushing higher to complete 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.


Yo Canada, Your Real Estate Is Way Overpriced.

Canada-US-debt

In October of 2013 I did the unthinkable. I came out and stated that the US real estate market was topping out its "Dead Cat Bounce" leg and that the subsequent decline in real estate prices will make 2006-2010 decline look timid by comparison. You can see the full report here Real Estate Collapse 2.0 Why, How & When as my opinion hasn't changed.  And while we haven't seen substantial declines just YET, the market is rolling over as we speak. That is to say, the worst is yet to come.

And if you thought California real estate was expensive, just take a look north of the border. The situation in Canada is equivalent to the hottest markets in the US, with one primary difference. Canadian real estate was a late bloomer and their speculative cycle didn't really get going until after 2002. Since their real estate cycle was about 8-10 years behind, they were not impacted by the real estate collapse in the US. Further, when the next round of financing (by the FED) showed up in 2008, Canadian Real Estate simply continued to accelerate as if nothing has happened.

Basically, Canadian real estate is where the US real estate was 9 years ago. The cycles confirm that as well. When this particular liquidity party ends (happening now) and the stock market shifts into the bear market, I would fully expect Canadian real estate to collapse. It is never different. Our friends at DoctorHousingBubble.com have a wonderful piece on Canadian real estate I encourage you to check it out. The Canadian housing bubble makes California real estate look sensible: Crash in energy prices will put pressure on home values up north as Canadians go into maximum leverage.

Plus, Garth Turner's Blog "Greater Fool" is a great place to follow 

Z30

Yo Canada, Your Real Estate Is Way Overpriced. Google

Dreaming Of A Housing Bubble

houseingbubble-investwithalex

Real Estate market continues to deteriorate. A good article from Bloomberg. Housing Falters as Forecasters See U.S. Sales Dropping

“The big housing rally wiped itself out because prices increased too quickly for buyers to keep up.” 

What happens next?

There are three primary lines of thought out there. First, the bottom in the real estate market was set back in 2010. There is a shortage of real estate and the real estate market will continue to surge higher for many years to come. Although it is incredibly overpriced. That is the view that Blackstone Group has.

Second, yes the real estate market is going through a bit of a slow down, but it will recover within a relatively short period of time or as soon as the US Economy catches fire. This is the primary view of most people on both the Wall Street and the Main Street.

Then there is my view (that very few people share). That view clear shows that what the real estate market has experienced over the last 4-5 years was a "Dead Cat Bounce" in the overall secular bear market that started in 2006. Further, it suggests that the real estate market is rolling over as it begins it's stage 3 massive decline.  You can read all about it in my comprehensive report  Real Estate Collapse 2.0 Why, How & When

z33

Dreaming Of A Housing Bubble Google

Real Estate Sales Slide As Inventory Surges Higher

real-estate-sales-and-inventory-investwithalex

Despite real estate insiders proclaiming that real estate market is about to surge higher .......because, you know, real estate always goes up and we are running out of land to build on, the chart above suggests otherwise.

What you are seeing is a sharp decline in sales and surging inventory. This is indicative of a real estate market roll over I have predicted here in September of last year. The dead cat bounce in real estate prices is over and this disintegration within the real estate market will only gather speed from this point on. Here is all you need to know....Real Estate Collapse 2.0 Why, How & When.......Read and Weep. 

Z31

Real Estate Sales Slide As Inventory Surges Higher  Google

What Happens When Blackstone Starts Dumping Real Estate At Market? Part II

Just a quick revisit.

As far as I am concerned, Blackstone has lost it's way and should fire their entire real estate division. Why? Watch the video above. Their investment thesis in real estate is very simple. 1. The bottom is in. 2. There is a massive housing shortage. 3. Real estate prices will continue to rise.  That sounds great, except for one thing, it's a bunch of BS that can easily be discredited.

Now, remember, while these guys have been somewhat correct thus far by being one of the largest real estate buyers/investors in the nation, the market hasn't spoken yet. All they have done is bought a huge amount of illiquid real estate that they will be unable to unload when a bear market in real estate prices resumes. As often is the case, one minute you are a financial genius and a half an hour later you are a retarded idiot (after the market moves against you).

I wrote about this before and I continue to stand by my opinion. Good luck unloading your illiquid real estate Blackstone. 

In another sign that the “Dead Cat Bounce” for the Real Estate market is now over, Blackstone Group has announced that it’s real estate acquisition pace has slowed 70% from last years pace due to higher prices. In fact, this is the trend seen across the industry. Investors, hedge funds, institutions are all slowing down their real estate acquisitions to the tune of 70-90%.

“The institutional wave has passed,” Gray, who oversees almost $80 billion in property investments, said in a telephone interview. “It’s at a much lower level than it was 12 or 24 months ago.”

What happens next?

Easy. The real estate market might hover here for some time. Not too long thought. As soon the Bear Market of 2014-2017 hits and the US falls back into a severe recession, you will see housing going down once again. Once investors realize where we are in the real estate cyclical composition (dead cat bounce and not expansion) you will see the likes of Blackstone trying to get rid of their properties as fast as possible. With investors heading for the doors, mass volume of real estate should hit the market. Collapsing existing values just as fast, if not faster, than their initial ascend between 2010-2014.

Good luck selling your 43,000 rental properties Blackstone. 

Z31

What Happens When Blackstone Starts Dumping Real Estate At Market?  Google

The Shocking Downside Of American Real Estate Bubble 2.0

courtesy of doctorhousingbubble.com

courtesy of doctorhousingbubble.com

As Wall Street Journal reports.... Half of Americans can’t afford their house

Over half of Americans (52%) have had to make at least one major sacrifice in order to cover their rent or mortgage over the last three years, according to the “How Housing Matters Survey,” which was commissioned by the nonprofit John D. and Catherine T. MacArthur Foundation and carried out by Hart Research Associates. These sacrifices include getting a second job, deferring saving for retirement, cutting back on health care, running up credit card debt, or even moving to a less safe neighborhood or one with worse schools.

If you need someone to blame I have got a few people for you. You can start with Greenspan, Bernanke, Yellen, Clinton, Bush, Obama and everyone in the US Congress/Senate over the last 20 years. All of them were, more or less, directly responsible for perpetrating this massive financial crime against the American people.

While you might have enjoyed your house going up in value 500% over the last 15 years you will not enjoy what happens next. As the chart above illustrate, the "Dead Cat Bounce" in real estate prices is almost over and the market is rolling over. As predicted here, Real Estate Collapse 2.0 Why, How & When  the real estate market is about to suffer a massive Stage #3 correction. By the time it's over, most Americans should be able to afford a house...again. I can't wait.

z32

The Shocking Downside Of American Real Estate Bubble 2.0 Google

Real Estate Disaster 2.0 Continues To Gather Pace

houseingbubble-investwithalex Real estate collapse 2.0 predicted here in October of 2013, when I called for the housing market (dead cat bounce) top, continues to accelerate. Back than most people thought that I had lost my mind and/or that I had just escaped from a mental institution. .....which is expected by now.  In fact, the number of data points that confirm my original forecast is staggering. Here are a just a few.

  1. U.S. house price gains seen moderating over next few years: poll  - Moderating? "About to collapse" would be a more accurate description. 
  2. The Most Overlooked Statistic in Economics Is Poised for an Epic Comeback: Household Formation -  Yep, no one is getting married and no one (young people) has any money left after making payments on their student debt. Disaster. 
  3. Borrowers Tap Their Homes at a Hot Clip - Who said that people learn from their mistakes? 
  4. The Number Of California Real Estate Agents Collapses 30% - What about all of those investors buying hand over fist for cash? Don't they need realtors?
  5. "Pent-Up" Pending Home Sales Demand Missing; Down 9.4% YoY - Yep. 

  6. Zero Down Payment? China’s Developers Get Desperate - And let's not forget about the biggest housing bubble on the face of the Earth.

Here is the bottom line. If you are thinking about buying a house, understand, you are buying at the very top. If you are thinking about selling.....you have about 3-6 months max before this real estate market trend really accelerates and becomes apparent to everyone else.

Z31

Shocking News: Real Estate Market Continues To Deteriorate.

A number of important articles on real estate. 

To quickly summarize, you got to be freaking rich to be able to afford a house nowdays, Janet Yellen couldn't cure her own headache even if she tried and young people can either afford to jump on a "property ladder" with an overpriced shit box or start paying off their student debt.

mortgage-debt-wages

Listen, today's housing market is no different from the stock market. What was once a place to live and accumulate equity/savings, is now nothing more than Tesla Motors Inc (TSLA) high growth and highly speculative stock selling at 13 times revenue.

With the amount of speculation and debt out there, don't have any illusions that the real estate market will behave in a different fashion. Expect the real estate market to crash......just as the stock market will as soon as this credit driven speculation party ends. Just as it did in 2007.

Need more information? Real Estate Collapse 2.0 Why, How & When

Z31

Shocking Truth: Why San Diego Real Estate Prices Will Decline By Over 50%

San Diego Investwithalex

It's official. My home base, San Diego, has done it. San Diego the nation’s second least affordable city for buying a home behind San Francisco. 

"The report says a person in San Diego would need to earn $98,534 a year to buy a $483,000 home, the county’s median price in the first quarter."

Well, I have good news and I have bad news. The good news? As advertised, San Diego is a beautiful city, the weather is nice and it's a nice place to live. The bad news? Real estate prices will decline to the tune of 50% over the next 10 years.

Let me be crystal clear. Anyone.....anyone buying a house at today's prices will lose a ton of money. Don't worry, I know that most people (particularly in San Diego) will disagree with me. Yet, most of these people have no idea of where we are in the composition of the overall economic cycle, its application to real estate, real estate valuation work and so on.

Very briefly, what we saw in the real estate market between 2006-2010 was just the initial decline in the secular Real Estate Bear Market(stage 1). What we have witnessed since, 2010-today (stage 2) is a "Dead Cat Bounce". What's next?

Stage 3....a massive decline followed by another bounce and then by a final leg down. Now, these things don't happen overnight. They take years to play out. My timing work shows the bottom in San Diego real estate prices arriving around 2022-2024.... at the earliest.

Again with 50% or more price haircut expected, it would be VERY wise not to touch real estate in San Diego with a ten foot pole. If you need more information you can read my comprehensive report here Real Estate Collapse 2.0 Why, How & When

z32