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Stocks Are On Borrowed Time
The Fed announced that QE is officially over.
This is a MAJOR concern for stocks. The markets are currently holding up because it’s the end of the month.
Let me explain…
Unlike individual investors who don’t have to report returns until year-end, most investment funds have to report their performances for each month.
For this reason, it’s very common for stocks to rally into month end as institutions buy stocks to force the markets higher. Doing this allows them to record month end returns at the best possible levels.
The simplest term for this is “performance gaming.”
With October having been a terrible month for most investors courtesy of the 9% drop in stocks earlier, institutions are highly incentivized to push the markets higher today, despite the fact that QE has ended.
At the end of the day, the single biggest driver of stock prices has been QE. Every time QE ended, stocks have tanked. So a new QE program is not coming anytime soon.
This is a major problem for stocks. The Fed has “saved” stocks every time in the last four years with a new QE program. It won’t be this time.
In 2010, the S&P 500 staged a death cross, where its 50-DMA broke below its 126-DMA (the half year moving average). Stocks were in a perilous state with the 2008 Crash still in everyone’s short-term memory.
The Fed stepped in, hinting at, then all but promising, and then finally launching QE 2 in July, August, and then November, respectively.
This set off a rally in stocks that lasted until the EU Crisis erupted in full force in 2011. Once again stocks staged a death cross. And once again, the Fed stepped in with promises of action followed by the announcement of Operation Twist in September 2011. Stocks took off and we were back to the races.
Which brings us to 2012. Europe was really going down in flames. Greece, then Portugal, and even Spain were lining up for bailouts. And the bailouts were getting larger by the month with Spain requesting €100 billion in June 2012.
ECB President Mario Draghi promised to do “whatever it takes” to hold the EU together. But the carnage was spilling over even into US markets. So Bernanke’s Fed promised yet another QE program, though this new program would be “open-ended” in June.
Sure enough, Bernanke unveiled QE 3 in September 2012. He then upped the ante, unveiling QE 4 in November 2012.
Stocks took off again, launching one of the sharpest, strongest rallies in history.
Which brings us to today.
The Fed has ended QE. And it won’t be launching a new program anytime soon. So when this rally ends and stocks collapse, the Fed won’t be coming to the rescue.
Be prepared.
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Best Regards
Phoenix Capital Research
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How many years have we been reading on zerohedge that stocks are on borrowed time? 4? 5? What you never see on zerohedge is what you do after the crash. What do you do? Oh ya, you buy stock. And that drives the price right back up there in a few years. Stocks do seem overpriced...but whats the alternative?
How many years have we been reading on zerohedge that stocks are on borrowed time? 4? 5? What you never see on zerohedge is what you do after the crash. What do you do? Oh ya, you buy stock. And that drives the price right back up there in a few years. Stocks do seem overpriced...but whats the alternative?
They will pretend that they are not and fully expect the msm to not notice.
So Yellen, the ultradove is going to stop printing money, putting enomous pressure on our empire to shrink? Am I supposed to believe that? Is this for real?
At today's low rates, time is cheap. Borrow away.
The wrath of unintended consequences .
"Sheeple wear Wolfskin !"
See
https://www.academia.edu/9031355/The_Were-Sheeples_Almanac
http://andreswhy.blogspot.com/2014/10/were-sheeples-almanac.html
Stocks are obviously very concerned today with 3% gains by mid day.....I think they can keep this shit going longer than any of us can live.
Who you jivin' with that Cosmic Debris??
https://www.youtube.com/watch?v=LjPlhb4f9P8
And when all those corporate genius CFOs decide to stop daytrading their own compnay's shares what do you think they will do. If you said you think they will hold on to their valuable company buybacks, you'd be wrong. they will be dumping those shares faster that shit through a goose.
Yep and my guess is those companies wont even have operating capitol when it blows.
Actually great short idea, high buybacks, + high debt + flat sales+ overbought IBM comes to mind
They should end QE but no they wont. Its back door QE from now until it goes boom. If you think the markets are messed up now just wait. They are going to wipe the floor with both bulls and bears. Fiat from the start is about swipping the smart money of savers.
"The Fed has ended QE. And it won’t be launching a new program anytime soon. So when this rally ends and stocks collapse, the Fed won’t be coming to the rescue."
LOL...wanna bet?
They said they were ending QE, they didn't say they were over creating money. Watch the whatever backed securities.....
Phoenix Capital is on borrowed time
God, I hope so; I'm tired of their stupid advertisements for their newsletter.
No Phoenix Capital has probably no capital, only debt after investing on margin on Gold, and short-selling the S&P
why is that moron posting everyday ?
as long as he's posting, the SP cannot collapse.
When Pheonix cap will become a bull and drop their pesimistic views- I believe we are very close to this - (I can "hear " their desperation )
then I'll know my short positions are in the right way....
Just cut & paste this piece for later reference...
Phoenix Capital lost so much money during last 2 years with all the wrong picks, I don't know why anybody would take their word for anything be it true or false.
my dog has always crapped better stuff than Phenix Crapitall Research
two clicks
because they pay to put their crap here.
I'm afraid so. it's called advertising. They want to explain to you how to protect yourself. the people on ZeroHedge already know how to protect themselves; with precious metals. just more nonsense to page through.
Sooner or later even the boy who cries, "WOLF!" gets eaten.
But, I'm still stacking phyz, just in case. It's nice & shiny and cool to the touch.
His stuff is SPAM.
"Buy my newsletter."
Nope. The Fed will come to the rescue if need be. It may be covert, it may be reverse repos, currency swaps, but there is no way the Fed would let this stock market collapse.
Now the Fed will lose control at some point. Maybe when a few shale oil drillers go bankrupt.
The shale oil drillers are de facto bankrupt. Fixed for ya. (Although nobody recognized this yet.)