5/12/2015 – Another down day with the Dow Jones down 37 points (-0.20%) and the Nasdaq down 17 points (-0.35%).
Over the last few weeks I have suggested that today’s short setup is about as ideal as the long setup was at 2009 bottom. Hence, short sellers should be thankful for such high prices.
Bill Gross introduces the same idea, but in the bond market Bill Gross’s ‘Short of a Lifetime’ Would Mean Armageddon (watch the video, it’s worth your time).
“It’s Just A Matter Of Time”
While the conversation in the link above has to do with zero yielding German bonds, the same line of thinking should apply to the US Treasury market. At some point “follow the FED” trade will fail and the yields will surge. And while I don’t think we are there yet, it is just a matter of time. As a result, my forecast remains, 10-Year Treasury note will see a double bottom at 1.4-1.5% over the next two years before this 30 year bull run in yields is over.
When it comes to the stock market, “short equity” setup we are facing today is about as ideal as it was at 2000 and 2007 tops. Very limited upside or risk (if any) and massive downside. In other words, long-term investors should heed the lessons of two previous market tops. And instead of trying to figure out how many more years this secular bull market has left (hint: we are still in a secular bear market that started in 2000), they should seriously consider shifting their portfolios to the short side or cash.
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. May 12th, 2015 InvestWithAlex.com
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