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WARNING: Markets Reaching Extreme Leverage

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Posted by Steve St. Angelo - SRSRocco Report

on Monday, 22 January 2018 06:23

CNN-MONEY-Fear-Greed-Index-768x384

As investors’ bullish sentiment moves up to euphoric levels, the markets are reaching extreme leverage.  This is terrible news because a lot of people are going to lose one heck of a lot of money.  According to CNN Money’s Fear & Greed Index, the market is now at the “extreme greed” level and if we go by Yardeni Research on “Investor Intelligence Bull-Bear Ratio,” it’s also at the highest ratio in 30 years.

But, of course… this time is different.  Or is it?  I continue to receive emails and comments on my blog that the Fed will continue to prop up the markets forever.  Unfortunately, there is only so much the Fed can do to rig the markets.  Furthermore, the Fed can’t do much to mitigate investor insanity in record NYSE margin debt or the massive $2 trillion in the global short volatility trade.

The $600 billion in NYSE margin debt suggests traders have racked up a record amount of margin debt (33% more since 2007) and the largest short volatility trade in history.  By shorting volatility, investors are betting that the VIX Index (Volatility Index) will continue to move lower.  A falling volatility index suggests more calm and complacency in the markets.

So, the market will likely continue higher and higher, until it finally POPS.  And when it does, watch out.

I’ve put together some charts showing the extreme amount of leverage in the markets.  While this leverage may increase for a while, at some point the insanity will end in one hell of a market correction-crash.

The Commercial Banks Are Betting On Much Lower Oil Prices



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Stocks & Equities

Peter Schiff: Everybody Is Ignoring Very Negative Factors' in Market

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Posted by Peter Schiff - Euro Pacific Capital

on Friday, 19 January 2018 04:49

Economic guru Peter Schiff warns savvy investors that the current Trump bull-run stock market actually is flashing many obvious danger signals if one would only ignore the dazzle and examine the details.

“The stock market is rising despite the fact that there are very, very negative factors that are building, that are hiding in plain sight, that everybody is ignoring,” 

Schiff cited various danger signals, including rising inflation, as evidenced by the surging price of oil, the tanking dollar, and warning signs in the bond market with reports China plans to quit buying US Treasuries. Bloomberg News recently reported that Chinese officials reviewing the country’s vast foreign exchange holdings have recommended slowing or halting purchases of U.S. Treasury bonds amid a less attractive market for them and rising U.S.-China trade tensions.

....read more of the video synopsis HERE

Screen Shot 2018-01-19 at 4.57.59 AM



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This fund’s investment performance rivals Bitcoin, puts Warren Buffett to shame

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Posted by Simon Black - Sovereign Man

on Wednesday, 17 January 2018 04:45

Screen Shot 2018-01-17 at 2.47.54 AMThere’s a really unique investment company in Europe you ought to know about… because they are insanely profitable.

In fact, a few days ago the company announced that they expect to report an annual profit of $55 BILLION for 2017.

That’s more money than Apple makes… which makes this European group THE most profitable company in the world. 

Its stock price has more than QUINTUPLED in the past three years, and nearly tripled in the last nine months.

Those are practically cryptocurrency returns. And it crushes the stock performance of Apple, Amazon, etc. 

What’s even more impressive is that, while Apple and other highly profitable companies like Berkshire Hathaway, PetroChina, and JP Morgan Chase often have tens of thousands of employees or more, these guys only have around 800.

It’s an absolutely amazing business… But I haven’t even told you the best part yet.

They have a LEGAL monopoly on their product.

Literally ZERO other companies are allowed to compete with them. So they have a lock on the entire market. It’s extraordinary. 

You might not be familiar with the company… but you’ve undoubtedly heard of its product.

It’s the Swiss franc.

And the company is Swiss National Bank (SNB), i.e. the central bank of Switzerland.

Yes, the Swiss National Bank is actually a publicly traded company, just like Apple or General Electric; it’s listed on the stock market in Switzerland under the ticker symbol SNBN.



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Why Shady Banksters May Be a Great Investment

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Posted by Connecting The Dots - John Mauldin Economics

on Tuesday, 16 January 2018 06:44

Bankers divide the population into two categories: “banked” and “unbanked.” They seek to bank all humanity, because these days, to be unbanked is considered the financial equivalent of homelessness.

The grammar is revealing here. “Bank” isn’t a noun referring to that institution with impressive columns that holds your money. No, bank is a verb because it is an action done to you, not something that exists for you.

While some banks are run by honest folk, others are almost indistinguishable from criminal organizations.

Still, those “banksters” may be one of the best investment opportunities of your life.

Image 1-20180116 CTD



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Semi Canary Still Chirping, But He's Gonna Croak in 2018

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Posted by Gary Tanashian - NFTRH

on Friday, 12 January 2018 06:31

Since January 2013 we have been using the worldwide Semiconductor Equipment industry as a leader within the Semiconductor sector, which is an economic cyclical leader itself. That month we noted a positive move in Equipment bookings, which became a (3 month) trend that spring. This trend was used to project positive economic signals to come.

Through some turbulence in 2014 and 2015 the sector has remained on ‘economic up’ along with our cross reference indicator, the Palladium/Gold ratio right up to the current time as the economic Canary in a Coal Mine has kept on chirping.

But on November 21, two days before the sector topped I derisively poked at the mainstream media for hyping the Semiconductor Equipment sector with its bold headline… Fund manager looks beyond ‘FAANG’ stocks and finds even bigger winners for 2018. Talk about eyeball harvesting and greed stimulation.

The goofy article highlighted a fund manager who’s likely never dirtied his expensive shoes on a factory floor going on about how he has found value in the likes of Applied Materials and Lam Research. I gave a rebuttal per the link above and noted the reasons why this rosy scenario was unlikely to play out in 2018 for the cycle leading Semi sector and its sub-sector leader, the Fab Equipment companies.

So what do we have now? Why, in checks a real source of industry news (unlike the completely abstracted financial media crap we as investors are routinely subjected to) with affirmation of our November 21 viewpoint.

Still Growing But at a Slowing Pace

To review, in 2013 we projected Semi Equipment → Semi → broader Manufacturing → Employmentand it has played out that way over time and through much media drama and noise. But now the pace of a cyclical leader is slowing… even as the world stokes up on reflation (AKA fiscally stimulated inflation) and it all appears as good as it gets.

That is key. In Q4 2012 market players were embroiled in the Fiscal Cliff drama as my brother in law (a financial adviser) told me at Thanksgiving how the best and brightest fund managers were hording cash in expectation of a negative market event coming that December due to said Fiscal Cliff. My grunted response (which to this day I wish I’d had ‘all in’ conviction about) was “bullish”. That was the sentiment end of it, and the next month saw the Semi signals start coming in. The rest is history.

But January 2018 is much different than January 2013. If you have an interest in economic signaling or the Semi sector in particular, do check out the link above. Meanwhile, here are a few items from the article.

World semiconductor equipment shipment growth was a very robust +26 percent (3-month basis) in October but down from its +63 percent peak in February. By comparison, October global semiconductor shipments were up 22 percent, while November Taiwan chip foundry sales (a leading indicator) were up only 3 percent. Based on Chart 1 it appears the SEMI equipment growth will ease considerably in early 2018.

still-growing-chart-1



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