Another volatile week in world stock markets. Bailout in Europe leads to an excuse to cover short positions and a snap-back rally the first part of the week. This gave those of us who see a correction materializing the chance to get out of any long positions and re-position for the sell-off that is coming. A lot of world markets and many commodities are looking very weak right now. I wouldn't want to be long anything at the moment, other than gold, silver, and the U.S. dollar.
But that is the short term outlook. In the longer term, I see serious roadblocks and hazards emerging in the next 6 months and beyond. This will lead to the realization toward the end of this year that we are not out of the woods yet--not even close. 2011, unfortunately, will be ugly. I have zero faith that this recession is truly over, although many will have you believe that. "Time to buy back in, catch the train before it leaves the station, load up your mutual funds." It makes me ill when I hear such poor advice. Unless you are loading up on precious metals, don't bother. Stay in cash, sell and take profits--get out of the market by the end of this year, or you could see your positions cut in half in 2011. Yes, that's right, I said cut in half!
The market is not the place to be. Not the U.S., not China, not Europe, not Brazil. Not right now and not until the recession is truly over. If you read the next two posts, you'll see that I don't expect that to happen until the end of 2012 or even 2013. Do yourself a favor and let everything play out before you buy back into this market. If you've made a profit or recovered some losses in the past year's rally, good for you! Take profits, open up a money market account, buy a CD even though you're only making a couple percent. Do anything, just don't keep your money in the stock market--any stock market!
2011 will be rough. If there is going to be a market "crash" or major sell-off in the next three years, I believe it will occur in 2011. I have no confidence that it will take that long, though, and I would guard against a 2010 crash as well. Don't listen to the news. Don't believe the media's claim that the recession is over. Do not buy back in now. It's too late--this rally is over and 2011 is looming. Fear is an emotion that sometimes can't be trusted when it comes to investing. Right now it's time to trust your fear.
Saturday, May 15, 2010
Saturday, May 8, 2010
Prediction: 2012
If this last week's action in world stock markets tells us anything, it's that you shouldn't listen to the media. While rosy reports came in from numerous companies, jobs report data looked fantastic, and Larry Kudlow, Jim Cramer, and other talking heads spoke about the re-emergence of the U.S. economy, stock markets tanked. Failure to use common sense to consider that the stock market was WAY overbought is leading to some horrible predictions. Like Mr. Cramer's insistence that the Dow Jones industrial average is going to 12,000. We'll see 8,000 before we see 12,000.
Which takes me to my prediction, this time for the year 2012. I'm worried about 2012. I truly hope that the U.S. in 2012 does not resemble Greece in 2010, but I honestly have no real confidence that things are going to be back to business as usual by then. In fact, 2012 could very well be worse than 2008, in the stock market and in the economy. Take a quick minute or two to read Robert Kiyosaki's article in Yahoo Finance: 2010: The Best of Times or the Worst? . Mr. Kiyosaki is not someone whom I would consider betting against. In my opinion, his predictions could not only come true, but could also carry over well into 2012. His next Yahoo article was entitled, "Doing the Dead Cat Bounce," also a must read.
I hate to even bring this up, because anyone who reads this will probably think I'm nuts, but I don't believe anyone really reads this anyway so here goes: December 21, 2012. Whether the Mayans actually predicted the world would end on this day, or they simply couldn't read their calendar after this date, I have no idea. Leave that up to the scholars to debate. All I know is that "Y2K" caused many people to panic, so why shouldn't people fear the Mayan prediction as well? Especially if we experience economic and political turmoil in the year 2012, leading up to December 21.
World stock markets are going to suffer over the next few years. Gold will likely see new highs. Why not just wait it out? Keep your hard earned money, your nest egg, your retirement account in cash or gold. Buy some Japanese Yen, perhaps. Just don't own any stocks. On December 22, 2012, buy back in. Do some buying on the Hong Kong exchange, open a brokerage account with Peter Schiff's company, buy some ETFs. You'll be happy you avoided another stock market erosion from 2010-2012 if you do this. Buy, hold, and diversify will truly be dead come 2012.
Which takes me to my prediction, this time for the year 2012. I'm worried about 2012. I truly hope that the U.S. in 2012 does not resemble Greece in 2010, but I honestly have no real confidence that things are going to be back to business as usual by then. In fact, 2012 could very well be worse than 2008, in the stock market and in the economy. Take a quick minute or two to read Robert Kiyosaki's article in Yahoo Finance: 2010: The Best of Times or the Worst? . Mr. Kiyosaki is not someone whom I would consider betting against. In my opinion, his predictions could not only come true, but could also carry over well into 2012. His next Yahoo article was entitled, "Doing the Dead Cat Bounce," also a must read.
I hate to even bring this up, because anyone who reads this will probably think I'm nuts, but I don't believe anyone really reads this anyway so here goes: December 21, 2012. Whether the Mayans actually predicted the world would end on this day, or they simply couldn't read their calendar after this date, I have no idea. Leave that up to the scholars to debate. All I know is that "Y2K" caused many people to panic, so why shouldn't people fear the Mayan prediction as well? Especially if we experience economic and political turmoil in the year 2012, leading up to December 21.
World stock markets are going to suffer over the next few years. Gold will likely see new highs. Why not just wait it out? Keep your hard earned money, your nest egg, your retirement account in cash or gold. Buy some Japanese Yen, perhaps. Just don't own any stocks. On December 22, 2012, buy back in. Do some buying on the Hong Kong exchange, open a brokerage account with Peter Schiff's company, buy some ETFs. You'll be happy you avoided another stock market erosion from 2010-2012 if you do this. Buy, hold, and diversify will truly be dead come 2012.
Sunday, May 2, 2010
Prediction: 2013
Having neglected this blog for too long, it is now time for me to begin crafting something I have been thinking about for a while. I am going to write a 5 part series on the future of world stock markets and what we can expect in the next 3 years and beyond. I am beginning with 2013 because I would like to allow the one or two readers who actually look at this blog to be able to read it from top to bottom. So I'm going to write this in reverse order--this will be part 5 of 5.
2013 will be a fantastic year. I truly believe that it will be the beginning of a lot of great things to come in the world economy with political reform, economic reform, energy reform, and all sorts of other needed change taking place. It will also mark the beginning of the greatest bull market of this generation and beyond. Unfortunately, it will come to fruition due to the pain we are about to go through in 2011 and 2012, but this pain will only make us stronger. Those who anticipate and react the fastest, make the right financial moves, and position themselves correctly will be ready to profit and succeed in the new world economy.
I don't need to write about the great bull market that is coming. Peter Schiff has already written about this in "Crash Proof" and Jim Rogers talks and writes about it all the time ("A Bull in China" is one example). These are not my ideas. I'm not an economist like Peter Schiff or a billionaire like Jim Rogers, but I know that they are men worth listening to. The timing, 2013, is not something they have written about specifically, to the best of my knowledge, but is my prediction of when this new bull market will begin.
In April 1942, the Dow Jones Industrial average bottomed below 100. At that time a new bull market began and the 100 level on the Dow was never seen again. I believe that in 2013 the Dow will bottom again. Below 6,500 just like 2009, perhaps. Maybe lower, or maybe a little higher. I don't know the exact number, but I believe it will bottom along with other world markets. As Schiff and Rogers advise, however, I would rather be long Asia at that time than the United States. China, Hong Kong, Singapore, gold, silver, oil, commodities in general. These are the places to be in 2013, but I'll let you read Schiff and Rogers to determine that for yourself.
2013 will be a fantastic year. I truly believe that it will be the beginning of a lot of great things to come in the world economy with political reform, economic reform, energy reform, and all sorts of other needed change taking place. It will also mark the beginning of the greatest bull market of this generation and beyond. Unfortunately, it will come to fruition due to the pain we are about to go through in 2011 and 2012, but this pain will only make us stronger. Those who anticipate and react the fastest, make the right financial moves, and position themselves correctly will be ready to profit and succeed in the new world economy.
I don't need to write about the great bull market that is coming. Peter Schiff has already written about this in "Crash Proof" and Jim Rogers talks and writes about it all the time ("A Bull in China" is one example). These are not my ideas. I'm not an economist like Peter Schiff or a billionaire like Jim Rogers, but I know that they are men worth listening to. The timing, 2013, is not something they have written about specifically, to the best of my knowledge, but is my prediction of when this new bull market will begin.
In April 1942, the Dow Jones Industrial average bottomed below 100. At that time a new bull market began and the 100 level on the Dow was never seen again. I believe that in 2013 the Dow will bottom again. Below 6,500 just like 2009, perhaps. Maybe lower, or maybe a little higher. I don't know the exact number, but I believe it will bottom along with other world markets. As Schiff and Rogers advise, however, I would rather be long Asia at that time than the United States. China, Hong Kong, Singapore, gold, silver, oil, commodities in general. These are the places to be in 2013, but I'll let you read Schiff and Rogers to determine that for yourself.
Saturday, March 20, 2010
Plunge Protection Team
This passage is taken from "What or Who is Driving up Prices?" from ETFGuide.com, as posted on Yahoo Finance yesterday:
"What's the PPT's job?
The Plunge Protection Team's job description is to prevent another 1987-like 'Black Monday' from occurring (the Dow fell 22.61% on 10-19-1987). How can that be done?
According to John Crudele of the New York Post, Robert Heller, a former member of the Federal Reserve Board, described the modus operandi of the PPT as 'buying market averages in the futures market, thus stabilizing the market as a whole.'
The existence of the PPT was verified by former-Clinton advisor George Stephanopoulos via an appearance on Good Morning America on September 17, 2000. At the time of Mr. Stephanopoulos' appearance, the Nasdaq (Nasdaq: QQQQ - News) was caught up in the dot.com bubble bust and had fallen 25% in less than six months, as did the Technology Select Sector SPDRs (NYSEArca: XLK - News).
What caused the 70% rally
TrimTabs founder and CEO Charles Biderman, added further evidence to suspicions many have had for a while. TrimTabs is a research firm that tracks money flows into the market.
Here's what Mr. Biderman had to say: 'We cannot identify the source of the money that pushed stock prices up so far so fast.' More specifically, the source of about $600 billion net new cash necessary to lift the market's overall capitalization by $6 trillion last year could not be identified.'
Biderman continues, 'We know that the U.S. government has spent hundreds of billions of dollars to support the auto industry, the housing market and the banks and brokers. Why not support the stock market as well? The money did not come from traditional players.
One way to manipulate the stock market would be for the Fed or the Treasury to buy a nominal $60 to $70 billion of S&P 500 stock futures each month for as long as necessary. Depending on margin levels, as little as $5 billion to $15 billion per month was all that was necessary to lift the S&P 500 by 67% (statement was made on January 6, 2010).'
Obviously the Plunge Protection Team was the culprit behind this entire rally. The ETF Profit Strategy Newsletter predicted the onset of this rally previously on March 2nd based on a composite of common sense indicators."
"What's the PPT's job?
The Plunge Protection Team's job description is to prevent another 1987-like 'Black Monday' from occurring (the Dow fell 22.61% on 10-19-1987). How can that be done?
According to John Crudele of the New York Post, Robert Heller, a former member of the Federal Reserve Board, described the modus operandi of the PPT as 'buying market averages in the futures market, thus stabilizing the market as a whole.'
The existence of the PPT was verified by former-Clinton advisor George Stephanopoulos via an appearance on Good Morning America on September 17, 2000. At the time of Mr. Stephanopoulos' appearance, the Nasdaq (Nasdaq: QQQQ - News) was caught up in the dot.com bubble bust and had fallen 25% in less than six months, as did the Technology Select Sector SPDRs (NYSEArca: XLK - News).
What caused the 70% rally
TrimTabs founder and CEO Charles Biderman, added further evidence to suspicions many have had for a while. TrimTabs is a research firm that tracks money flows into the market.
Here's what Mr. Biderman had to say: 'We cannot identify the source of the money that pushed stock prices up so far so fast.' More specifically, the source of about $600 billion net new cash necessary to lift the market's overall capitalization by $6 trillion last year could not be identified.'
Biderman continues, 'We know that the U.S. government has spent hundreds of billions of dollars to support the auto industry, the housing market and the banks and brokers. Why not support the stock market as well? The money did not come from traditional players.
One way to manipulate the stock market would be for the Fed or the Treasury to buy a nominal $60 to $70 billion of S&P 500 stock futures each month for as long as necessary. Depending on margin levels, as little as $5 billion to $15 billion per month was all that was necessary to lift the S&P 500 by 67% (statement was made on January 6, 2010).'
Obviously the Plunge Protection Team was the culprit behind this entire rally. The ETF Profit Strategy Newsletter predicted the onset of this rally previously on March 2nd based on a composite of common sense indicators."
Saturday, February 13, 2010
Trend
Looking at charts this morning, I'm only noticing one bullish chart in the entire world (okay, I haven't looked at every chart in the world, but I did get a snapshot): the U.S. Dollar.
Yes, the U.S. Dollar Index has a bullish chart pattern. And nothing else! What does that mean? That means get your money out of the stock markets because institutional investors and rich guys and girls are selling heavily right now.
The only safe haven I see right now is the U.S dollar and any vehicle that bets against stock markets--put options, short ETFs, or outright shorting.
That's the trend.
Yes, the U.S. Dollar Index has a bullish chart pattern. And nothing else! What does that mean? That means get your money out of the stock markets because institutional investors and rich guys and girls are selling heavily right now.
The only safe haven I see right now is the U.S dollar and any vehicle that bets against stock markets--put options, short ETFs, or outright shorting.
That's the trend.
Monday, February 8, 2010
Monday
Wouldn't be surprised to see a bit of a relief rally this week. World markets have generally sold off the past 4 weeks in a row. Could see a bounce. Some may test their 50 day moving averages and overhead resistance. This test will likely fail and the downtrend should eventually resume.
Saturday, February 6, 2010
Talking Heads
Back after a long absence--personal circumstances forced me to focus on other things, but I've been watching and trading world markets the entire time. My call for the bull market to end in October was off the mark. We got a head fake sell-off in October followed by bullish action in November and December (despite distribution the entire time) until the new bear market that began the second week of January. Now it's look out beloooooow!
I cannot even turn on CNBC for 5 minutes without getting upset these days. I never watch it and then I turn it on last night, thinking the "traders" on Fast Money and that options show would be warning people and advising a large cash position. Instead, I hear these "experts" talking about buying the dips, how earnings reports at Cisco are looking good, and tech is going to lead the way! What the.....?
I don't understand this at all. Bad advice all the way around. At the very minimum, recognize that the U.S. market has broken through support levels and the uptrend line. Add that to a 10 month rally in a bad economic environment, world market indices that have in some cases already broken below their 200-day moving averages, and massive distribution in everything except for bonds, the U.S. dollar, the Japanese Yen, and....that's it. What does that look like to me? A new bear market, that's what it looks like to me.
I cannot even turn on CNBC for 5 minutes without getting upset these days. I never watch it and then I turn it on last night, thinking the "traders" on Fast Money and that options show would be warning people and advising a large cash position. Instead, I hear these "experts" talking about buying the dips, how earnings reports at Cisco are looking good, and tech is going to lead the way! What the.....?
I don't understand this at all. Bad advice all the way around. At the very minimum, recognize that the U.S. market has broken through support levels and the uptrend line. Add that to a 10 month rally in a bad economic environment, world market indices that have in some cases already broken below their 200-day moving averages, and massive distribution in everything except for bonds, the U.S. dollar, the Japanese Yen, and....that's it. What does that look like to me? A new bear market, that's what it looks like to me.
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