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Weekend Reading: Is This The Big One?
Submitted by Lance Roberts via STA Wealth Management,
Some month's back I posted an article entitled "No One Rings A Bell At The Top" wherein I stated:
"The current levels of investor complacency are more usually associated with late-stage bull markets rather than the beginning of new ones. Of course, if you think about it, this only makes sense if you refer to the investor psychology chart above.
The point here is simple. The combined levels of bullish optimism, lack of concern about a possible market correction (don't worry the Fed has the markets back), and rising levels of leverage in markets provide the 'ingredients' for a more severe market correction. However, it is important to understand that these ingredients by themselves are inert. It is because they are inert that they are quickly dismissed under the guise that 'this time is different.'
Like a thermite reaction, when these relatively inert ingredients are ignited by a catalyst, they will burn extremely hot. Unfortunately, there is no way to know exactly what that catalyst will be or when it will occur. The problem for individuals is that they are trapped by the combustion an unable to extract themselves in time."
Of course, what I didn't realize at the time was that, on Thursday, the markets would plunge like a stone sending investors running for cover and the media scrambling for answers. What caused it? Is this THE correction? What happens now?
This weekend's reading list is a collection of thoughts as to whether the current correction is just a buying opportunity, or whether this is Redd Foxx's "Big One."
RETORT REPORT
Wallace Witkowski penned: "One out of four stocks on the S&P 500 Thursday are firmly in correction territory, or down 20% or more off their 52-week highs. At last count, 133 stocks on the index are bearish, according to FactSet data."
G Shelter retorted: "Well the Bear is just growling so far. He hasn't mauled anyone yet. He's afraid of The Bullard."
THE LIST
1) Tom McClellan Sees Market Decline by Tomi Kilgore via MarketWatch
At the moment, they are telling him to be bullish on the stock market for all of his trading time frames, including those that trade every few days, weeks and months. But bulls should be ready to flee, as soon as this week.
That's because McClellan said his timing models suggest 'THE' top in stocks will be hit some time over the next week. He expects "nothing good for the bulls for the rest of the year," he said in a phone interview with MarketWatch."
Read Also: Great News: Investors Are Dumping US Stocks by Howard Gold via MarketWatch
2) The Bulls Are In Danger Of Turning Into Lemmings by Doug Kass via Kass' Korner
"Though the bullish cabal postulates that serious market tops and corrections can only occur in response to recession, those observers may not be focused on the changing landscape of a flat, networked and interconnected world and could be failing to properly analyze failed or less effective monetary policy.
The current conditions that have presaged a possible developing global economic crisis are sui generis – in a class by itself, unique and served up by a financial culture and orthodoxy that may have never existed before. And, though history rhymes, the outgrowth of malinvestment that has been emitted from current conditions is taking different forms, as it has done in each progressive cycle."
Read Also: Bear Markets & Contractions: Then And Now by Chris Ciovacco via Ciovacco Capital
3) The Tide Has Turned by Thad Beversdorf via Stockman's Contra Corner
"I've been writing for almost a year now about the economic cannibalism that has been feeding earnings growth. I have discussed this concept with a dire warning that feeding earnings expansion through operational contraction is a short lived meal. And well we are now seeing the indications that the growth through contraction has now hit its inevitable end. Have a look at the following chart which is really the only chart one needs to study at this point. The chart depicts S&P 500 adjusted earnings per share (blue line), S&P Price level (green line), S&P 500 Revs per share (red line) and US Productivity of Total Industry (olive line)."
Read Also: Listen Up-The Do Ring A Bell At The Top by Jim Quinn via Stockman's Contra Corner
4) Big Stocks Are Last Hope For Decaying Market by Michael Kahn via Barron's
"We can add the already falling trend in the small-company Russell 2000 to the mix, but the S&P 500 still rules. Its resilience, thanks to the strength of a limited number of big stocks, hides the fact that market breadth has been falling since April, according to the New York Stock Exchange advance-decline line. More stocks have been falling than rising. And Wednesday afternoon the number of NYSE stocks hitting new 52-week lows soared to 267. That is more than 8% of all issues traded that day, and it is quite ominous."
But Also Read: S&P 500 Ready To Rally? by Tiho via The Short Side Of Long
5) Is High Yield Sending A Warning by Urban Camel via The Fat Pitch Blog
"Spreads on high yield (junk) bonds relative to treasuries have widened. This implies heightened credit risk. The widening and narrowing of spreads is correlated to equity performance over time. Since mid -2014, these have diverged (data from Gavekal Capital).
Are equities setting up for a fall? The short answer is no, at least not based on this measure alone."
Read Also: Junk Is Getting Junkier by Ed Yardeni via Dr. Ed's Blog
Other Reading
The Genius Of Warren Buffett In 23 Quotes by Paul Merriman via MarketWatch
A False Sense Of Security by Ben Carlson via A Wealth Of Common Sense
After 6-Years Of QE - St. Louis Fed Admits QE Was A Mistake by Tyler Durden via ZeroHedge
The Fuss About Market Liquidity by Yves Smith via Naked Capitalism
Debt-Financed Buybacks Has Placed Investors On Margin by Dr. John Hussman via Hussman Funds
"Most Bull Markets Have A Copper Ceiling" - Anthony Gallea
Have a great weekend.
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i doubt this is the big one. we'll probably see a +1000 move monday
ZHERS PARTY IN THE STREETS
Actually, I am panning for gold after work (and this weekend) ... so ...
Regards,
Cooter
Good luck, Cooter, finding some gold!
* * *
But, ugh, another one of "those weekends."
Hey gang! Scooby'll give you a big one!
Scooby Dooby Doo where are you?
I'm prepping for the big ONE!
And Scooby Dooby Doo what are you going to do?
I'm spending the weekend in my bunker!
Rooooby dooooby dooo!
Nope, it's not the big one. But Bull fucking is fun.
we have not even begun to fall.
All 200,000 of them.
well..
Fed Says Rate Hike ‘Approaching,’ But Inflation Conditions Not Yet Metand
Aranca: Buybacks & Dividends – A Trillion Dollar OfferI think the next six weeks are the last "big one" before the big one. That will most likely either happen near the US's elections, or sometime in 2017-2018.
I have little doubt whoever is President of the US in January, 2017 will get to experience a collapse of an empire firsthand.
Respectfully, I disagree.
We won't make it that long.
Cramer's whining today will likely be heard by the Fed and others. They'll try to find more red meat for the Street sharks, and the country will (and very much SHOULD) pitch a bitch. It would be about time.
THEN...look out.
m
That's basically just 18 months away. They've stretched the 2008 collapse out seven freaking years. Don't underestimate their ability to delay.
I'm not saying thing aren't/won't be bad the next six weeks (and 18 months) but this isn't the global collapse... yet.
All manner of old tricks have yet to be used. They haven't sent out checks to Joe Sixpack, for example, nor have they done bail-ins. Greece is way ahead of the rest of the world on the collapse bandwagon and they've still got a government and are still laboring under the illusion that debt gets repaid somehow. There's a lot of denial yet to go before things go boom.
Well...maybe if they try to buy Joe Sixpack...
You no doubt are correct about the "man" throwing everything thing they have left at it, and that MIGHT extend it a piece.
But...for the very reason you mentioned, what's left of the working class rank and file have had it up to their necks with Wall Street, corporations, and asset racketeering. As you say, seven godammned YEARS...and just look where we are.
Trump is a loon, but he wouldn't be a front runner without resonating.
If the American people don't finally put their foot down on cronyism this time, they've got NOTHING to complain about.
m
If they say that XXX is polling 52 to Hillary's 48, I just wonder who in hell are the 48 out of a hundred. I haven;t run into anyone who is really 'FOR' Hillary. I see the idiot wall nodding to what she says on TV but that is staged $XXX per head to nod on time. Where are they? Maybe back East somewhere or maybe California around SF.
@ seek, I agree the next president is going to have an economic disaster on his hads like we have never seen , which makes me wonder, why the fuck would anyone WANT to be in that office when it happens? I certainly wouldn't. I agree that the Obama admin and their lackeys will probably do everything they can to keep this from coming unglued, and I agree, they haven't used all their tricks quite yet, retirement accounts aren't 'required' to hold treasuries yet , no bail ins , etc. but, again, these people wanting to run for office all talk about their plans that will restore 4% growth(delusional, IMO). Are they fucking STUPID? I just can't see why you would want to be in charge of the train when it finally goes off the rails. Or are they just such big egomaniacs that they really do believe that their leadership will guide the world out of the mess we have created for ourselves?
Musical chairs and the next president only has half an ass cheek on a chair.
I agree, while it might not be Monday when it goes tits up, and tehre may be a few 'token' rallies, China is not going to change it's economic policies. nuking countries doesn't win you any friends.
I don't think the Community Organizer's 'luck' is going to last that long... Especially given the geopolitical situation with Russia and China. Another year might as well be another decade. That's how much shit is going to fly between now and when he leaves office.
i doubt this is the big one. we'll probably see a +1000 move monday
Which direction? Does your + mean up? Or will it see saw? Or will it crash? I agree that volatility will increase. And I also forecast a Sucker's Rally...before the Shemitah collapse. But I foresee a lesser decline on Monday although it will still decline. I forecast an advance by next week's end. The following week it will recover enough to begin the test of the 200mDA. But we will see.The BIG ONE will happen suddenly:
"So how will it all end? Bill explains, “This is going to be an overnight or over the weekend type of event where you have what you have on a Friday and you wake up on a Monday morning and you can’t trade anything and you’re locked in to your position."
http://sgtreport.com/2015/05/this-is-how-people-will-lose-everything-bil...
"A major stockmarket crash probably worse than 2008 looks imminent, and by imminent we mean probably within weeks, possibly as far as out as two to three months, but perhaps within days. A break below 2040 on the S&P500 Index may trigger it. Virtually all stocks on the broad market should be sold, and bear ETFs and possibly Puts bought before the breakdown."
http://www.marketoracle.co.uk/Article51929.html
"It...could happen slowly
it...could happen in the twinkling of an eye
and when it does...it will surely burn you
but i dont think...those scars are something you should hide"
"In Vain" The Heartthrobs.uk 1980s band from Reading
I hope the local coin store isn't stripped bare tomorrow.
Good luck. I got the last silver eagles my neighborhood store had. At this point, it might be good to just get it in whatever form there is - rounds, bars, junk etc.
The big one is in my toilet bowl now...
Size madders.
What a bunch of crap.
no shit
Mexican or Indian?
My gut feeling says this isn't it...Seems too calm out there...
Who do you think is out there?
If this was the big one, we would see the fed panicing and attempts to keep it propped up...and probably a message from the liar in chief since America has become a reality show.
Dunno lead story on drudge yesterday was Caitlyn Jenner....
Good point. We're fucked.
Don't fall asleep.
I saw that yesterday and laughed.
With direct energy weapons, currency wars, and destabilization projects worldwide.
The coliseum is fed bread and circus.
Invasion of the Body Snatchers comes to mind for some reason?
Maybe, but maybe it is a good time for TPTB to let it fall. The government and Fed have China as the distraction from their crimes. The sheep will fall for it and there is nothing the rest of us can do about it anyway.
The big one will be starting Monday cash withdraws in the US will be paid out in USD Bluebacks. Which will be almost as good as Greenbacks. Except for that 60% automatic no hassle devaluation rate.
overheard in the Hampsteins: You look pretty glib, Chaim, what gives?...my clients money HAA!
I can picture that chubby little cocksucker Blankfein laughing and saying Yep we sheared 'em again
Every Stooge has his day................
https://www.youtube.com/watch?v=-N11lv4SLMY
re Is this the BIG ONE?
... and does it come with a harness? "
- Hillary ("shopping" on 42nd St)
i hope so but not going to get to giddy just yet.
today was awesome of course as there was blood everywhere in the ''market''.
that being said, i need to see a follow through continuing into monday and tuesday ( while a 530 pt drop would be nice again or more, it does not even need to be that significant).
being that today is friday, the central banks around the world are prob huddling now and discussing ways to stop the blood in the ''market''.
if late sunday night you see china collapsing still and the u.s and europe follow through, this could deff be the start of the collapse.
if we get a 200 plus up day on the dow, while then tuesday becomes the pivotal day to see whether that rally continues ( and therefore this prob is not the big one) or if the rally is sold again, that could still indicate this is the big one.
im just worried that being the weekend, the pboc will do anything to prop up there ''market'' and then we see green in the u.s
we shall see.
My thoughts exactly. I'll be watching the Shanghai Sunday late into Monday morning. If it's in the red, then I'll be buying more QQQ puts and loading up on top of what I've already got. Just gotta do some research and find contracts that are enticing. GL
Mormegil FTW
Half the articles I read on here say the markets have risen due to extreme bullishness, the other half of articles say it's due to extreme bearishness from people who hate this rally and has risen as a contrarian rally. I don't know which it is.
WWSS - what would schrodinger say?
My glass is half full.
(Canadian Mist)
Half n half sounds like sumthing you'd get from an ol' gypsie woman in the back of a rusty peugeot.
Bottom line is ..."dont trust it"
nope. nein. nichts. nao. Today would have been much worse if those expecting a bounce off of the level at the close on Monday hadn't stuck in there.
The low - close level on the ES mini has been tested from above many times since mid-December 2014. I expect a bounce sucking in more money before the "big" move down.
I expect some kind of Fed statment on Monday before Market open, if the market looks to open red. Jawboning works wonders in these situations, especially with the idiot savant Algos.
Totally expected a ramp job today as who in their right mind would hold a short position over the weekend? Boy was I dead wrong.
The DHS must be entirely in position and ready to take on the American populace. Hollow points yuk I hate them.
Hollow points are only used for practice and would never be used against the citizens of America. </sarc>
Yeah right!
A few thousand weekend warrior mercenaries who would fold up like cheap lawn chairs in a fight vs. millions of heavily armed pissed-off citizens.
They're going to need some more DHS guys real quick to replace all the ventilated ones!
They would be a no show , dead people don't get pay checks
Noone's gonna get paychecks soon. Thing is: will that be enough to keep them from doing their job? Or, will that just entice them to 'pay' themselves at our expense?
I hate to say it this way, but about a few dozen DHS (MS-13 mercs, whatever) with these, can serve as replacements and then some ..
https://en.wikipedia.org/wiki/Minigun
Cartridge 7.62×51mm NATO
Caliber 7.62 mm (0.308 in)
Action Electrically driven rotary breech
Rate of fire Variable, 2,000–6,000 rpm
Muzzle velocity 2,800 ft/sec (853 m/s)
Maximum firing range 3,280 ft (1,000 m, 1,093 yd)
Feed system Disintegrating cartridge belt or linkless feed; dependent on installation [500-5,000 round belt]
Sights Dependent on installation; no fixed sights
What do you think it will take a stupid kid to know the difference?
https://youtu.be/qU04j2ssNAk
Is this the one? Does it matter ? ...
The current market is struggling without the yet to be implemented FED rate hike yet.
That will be the big one when everyone knows the manipulated markets will see all that malinvestment burn.
Raising interest rates in cycles (seen it so many times) was a good way to keep the malinvestment in check but now when it is primarily malinvestment in the markets is kind of stupid.
The biggest daily declines are AHEAD of us. I don't normally watch the market that closely. But I will next week - for entertainment value.
There are a LOT of CEO's and CFO's screaming SELL orders to their brokers right now. Darn, there goes that big bonus at the end of the year. The whole "stock buy-back thing" just evaporated.
M O A R
W A R
N W O
vs
B R I C
this is not your fathers socialism
I don't see the chart for the Christmas bonuses?
Yellen and her masters WANT this thing to crash... you can bet that Goldman and HSBC, after loading up recently with 9+ tonnes of PHYSICAL gold... and the JPM maggot Dimon with his monster holdings of PHYSICAL silver... are ready to toast marshmallows in the fire of the sheep/muppet's remaining assets...
So today they all went to the wailing wall and hit their heads against it hard. Is that enough? I do not think. God is not going to save them, because they have sinned to much and they will have to pay for it. Greed was your sin and all your gains will need to be given back to the people you have stealed them from, otherwise they will be taken away and then some more.
So today they all went to the wailing wall and hit their heads against it hard. Is that enough? I do not think. God is not going to save them, because they have sinned to much and they will have to pay for it. Greed was your sin and all your gains will need to be given back to the people you have stealed them form, otherwise they will be taken away and then some more.
Good thing that they have the weekend to covet their neighbors.
Popcorn popping.
Guns oiled.
100 can cases of sardines, bricks of vacuum packed rice and grains stacked.
Thar ya go pardner.
Someone that knows how to handle this.
Yellen could use someone who knows what they're doing...
m
Yamaha TW200 all nice & maintained...?
Seriously, good on you.
We'll all look back on this time and even if 'guns' etc. comes to nothing, spending time thinking about the future and protecting your family is time worth spent.
Is this the big one?
Nah Friday the 13th is still a couple of months away.
Superstition rules O.K.?
What is to say that the PPT (if it actually exists) doesn't have basically, unlimited (theoretically) liquidity to thwart a bust or anything beyond a very very overdue "correction?" Aren't all the CB's working the same script and model? Seems like a premeditated outside force would be needed to 'break' the pattern. When was the last text book definition of a market correction? I think it was during August 2011.
inside info is that the lead hft algo tech slipped and fell in the john during a break, and had to go home early. Alll will be fixed on Monday. :-):-)
.
How is it possible to have any "market correction" if in fact we do not have any real markets ? All we actually have are the illusions of markets presented by control freaks via lies, manpiualtions, distortions and cronyism ?
All we are seeing is the end game of all above, coming to fruition and picking up inertia along the way !
This could also be a prelude to more QE ! But it won't work this time around with China failing.
a quick decline would be too painless. they are going to stretch out the pain for decades, sucking every last bit of blood they can along the way.
Perceptive. In pains the preys pray for quick deaths. It shall be a slow emasculation through the underestimated weapons of the Predators. Perversely, this grind is the hope for the DNA change in the Preys.
Nah, we still have about a month
Symbol of excess -- XOM's new campus --
http://www.chron.com/news/slideshow/Exxon-Mobil-039-s-new-campus-60749.php
It would be great if China drug everything down early and so severely that the collapse kicked off with Obama in office and before the next election or during. Anything else blow up in China lately?
"Charts are for losers"
Let's make the market great again!
Here are some more signs of a recession.
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record...
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
http://michaelekelley.com/2015/02/24/would-you-pay-39-more-than-asked/
http://www.zerohedge.com/news/2015-07-27/when-will-we-ever-learn/
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
I got udderly soaked
The bubble burst at 183. (Around the time lightning hit the one world trade centre in America) It's just been an unusual decline since the combined manipulation of a lot of previously very powerful people has been keeping it in it's weird jittery phase.
Traders must be exhausted. They will sell partly because their judgement is too f'd to do anything else (to the point about Bulls becoming Lemmings).
The united states of amerika will become the prettiest horse in the glue factory and experience unprecedented inflation as the world's elite flock to safer havens. Oh wait, that already happened.
1926 - house prices softened
1927 - car sales dropped
1928 - construction levelled off
But in wall street the music still played until 1929.
Investors and markets are slow to react to the oncoming storm.
BTFD and the BTFATH, its easy...