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The Markets Are On Borrowed Time
Emerging
Markets, which have lead the S&P 500 for years are flashing MAJOR warnings
signals.
Remember,
the Emerging markets bottomed before the S&P 500 (November 2008 vs. March
2009) during the Crash.
Emerging
markets ALSO lead the S&P 500 during the April 2010 top by roughly one
month (they topped in early April while the S&P 500 topped at the end of
April):
Finally,
Emerging markets ALSO bottomed before the S&P 500 during the rally from the
summer of 2010 until now:
Another
market leader flashing a major red flag is Gold, which has ALSO lead the
S&P 500 since the 2008 Crash:
As was the
case with the Emerging Markets, Gold bottomed in November 2008, leading the
S&P 500 by roughly three months. Which is why I want to emphasize that Gold
has already begun a significant
correction today while the S&P 500 continues its melt-up.
This is yet
another serious warning sign that US stocks are on borrowed time. Be on guard,
we could be putting in a MAJOR top soon.
Good
Investing!
Graham
Summers
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In my mind, this is pretty simple. The Fed concluded with the decision of QE1 and now 2, wthat we were screwed; a no win situation. Meaning, we were facing the abyss of economic depression and a currency collapse. So the plan was to lessen the blow over time and under improving conditions. That is all they could do. It has worked.
How? by implementing QE1 and 2, the dollar would collapse as part of another plan. Furthermore, we were in such bad economic shape, creating financial steroids would allow the economy to grow and strengthen. What is better a collapse of your currency when you are in a near depression or when your economy looks like it is taking off? If the economy is taking off, much of the collapse appears to many as higher demand. Confidence from the steriods created more confidence. This confidence created more demand and the circle now continues. All the while, the dollar can have an orderly retreat without much fanfare other than people are talking about how the dollar will collapse. Alas, it is and has already happened!!! Folks, think about it. the dollar is at a 25 to 30% discount. Maybe it drops another 10%. The Euro Union is trading in the 1.35 range versus 1.50 after all of their problems??!!! The Yuan won't move because the chinese wont let it. However, in real terms, those boys are feeling it!!! The Aussie?, etc etc. We are simply having a dollar collapse as we write these very words.
QE Series would be sold as a way to help employment and get the economy going as well as keep long term rates down. When they went up? They sold it as a signal of a strengthening economy. These guys are not idiots. Equities and commodities are a way for U.S. CITIZENS to regain some of the wealth they will lose from a declining dollar. So to summarize QE series is to disguise the collapse of the dollar as part of a planned program to the sheep and the world in an orderly transition rather than a full fledge worldwide collapse that would destroy the financial system around the world and most likely cause world war III. In Real dollars, the market is down and not up. Why does the fed exclude all the items from CPI? because reporting inflation on helps to ignite it from the masses accelerating the purchases. Therefore, not reporting it certainly fools many.
The fed is in a real box, unless it can get the Repub's to go along with this plan, there will be blood in the streets by fall if not just before QE2 ends some time in May. My bet is the Repub's fold as usual as neither party understands money very well. Look today, wow a big 60 billion budget cut from the Repub's. Thats it? We elected more Bozo's with false promises as thats all the options we are allowed to have.
equal time for men??? Call out the hangman, this is pure heresy and blasphemy!!!!! What the hell??? Mimbos on Zerohedge?? What's next, Hugh Hefner showing up for Catholic communion???
Another week, another POMO-induced meltup. Bill Fleckenstein must be having nightmares,
as the insane non-stop bottlerocket moves in many big name stocks is being
repeated again. My condolences to the
"pro traders" and "technical experts" like Tom O'Brien,
David White, and Larry Pesavento over at TFNN.com who have been bearish on the
market for the last 6 months. Meanwhile,
the Monster Energy swilling 19-year old motion chasers without MBA's or any sort
of CMT credentials are killing it. How
far is this thing going to go?
Many of the old timers like insufferable Bob Brinker
remember the days of un-interrupted bull runs of the 1990's, who amazingly
stayed long the entire time. The 10,000
hedge fund managers, many of who are too young to remember those monsterous
runs, are still trying to pick tops and jump on the short side at the first
sign of a coming correction.
Same result this week. Banks, retailers, REITs, cyclicals, steel stocks, etc. making new highs.
http://stockcharts.com/freecharts/candleglance.html?rkh,xrt,$cyc,iyr,iwm,slx|C
I always wondered. If
we ever got into another run like that, would I get shanked out and left
behind? Or would I be able to hang on
for the entire run?
Anyone old enough to remember these?
Cindy Crawford in 1995:
And remember poor Bill Fleckenstein documenting the huge 600% rocket run in the SOX in 1999?
Gisele "I Wanna Get Paid In Euros" Bundchen in 1999:
For those who think the market is way overextended and are looking for shorts, these are some of the weaker ones. Either these stocks are going to get weaker, or they could stabilize and turn around:
http://stockcharts.com/freecharts/candleglance.html?akam,ntap,tlab,csco,mrk,cpb|C
But I'm not too keen on shorting anything, as long as the "Metrosexual" stocks are still making new highs:
http://stockcharts.com/freecharts/candleglance.html?sbux,wfmi,lulu,anf,jwn,coh|C
Ryan Seacrest's net worth now reportely at $45 million....
http://www.celebritynetworth.com/richest-celebrities/actors/ryan-seacrest-net-worth/
Stocks we should all be watching, at "Do or Die" levels right now:
MSFT sitting at support at the 200-day:
BRCM has not participated in this week's meltup. Certain coke-inhaling, high-end hooker chasing billionaires in Orange County are acutely interested in seeing BRCM turn around:
Other things we should be watching is the IBD Top 50 index. Will we have more big volume breakout moves in names like ARUN?
Watch 'em here:
http://clearstation.etrade.com/cgi-bin/bbs?post_id=9642146
Eventually, we are get an "Overnight Surprise" Black Swan event. And all those guys who are buying futures heavily on Friday to make a killing on "Mutual Fund Meltup Mondays" are going to get burned.
Here is an example of one poor dude who lost it all on one weekend:
But that probably won't happen until the bears finally capitulate, throw in the towel, and start beating on their associates who have been gloating about their ill-gotten gains in a fraudulent market.
Like this guy:
the premise is Gold has 'already' started a major correction and the S&P will follow. Er, Gold is back on the up right now and silver is within a whisker of its all-time top!! The PM's are either going to bounce off their tops again and drop or they're going to blow through their tops and both make new all-time highs... the jury is still out, this article is premature at the moment given the evidence
Looks like a new troll here at ZH. Your theme of "premature" is on all your posts.
interesting perspective. i agree with most of what you write. maybe gold will lead down. don't know. but the chart(s) appear pursuasive, even if it's painful from my gold bull viewpoint. still accumulating physical silver and gold, though.
the warning being given off by emerging markets may be a sign of deflation for emerging economies which tend to be commodity producers. If they do eventually have to acknowledge the USA win in the begger thy neighbor game, then at that point inflation may form a top. There is absolutely no reason for brazil to be trading so weakly otherwise.
graham, excellent reasoning but if you keep this up robotTrader will show you his NFLX chart or hwanger will try to sell you his home decor business... don't say i didn't warn you.
gold began a significant correction today? what?
Buy hard assets, equities are artificially pumped up.
"There's no place for fiat to go except gold" -- Alan Greedspan, 2010, CFR
None of this matters....just BTFD as there continue to be buyers of stocks even at these levels and no one seems willing to sell.
Nobody is buying, except the insiders who want their derivatives to end up in the money - using a little cheap money, huge leverage and frontrunning trading, 97% chance of success assured.