Stocks & Equities

Market Now Entering Mania Phase

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Posted by Financial Sense

on Thursday, 11 January 2018 07:12

Ed Note: Make sure to read down to "Watch For Bond Market Troubles" & Commodities Entering New Bull Market

We’ve witnessed remarkable stock market performance in the last year and a half, with the Dow Industrials and S&P 500 not experiencing a 3 percent or greater pullback during this parabolic rally.

“This has never happened before in history,” Dorsch told Financial Sense Newshour. “There’s virtually no fear in the market for a pullback,” Dorsch said. “The only fear is the fear of missing out. This is a mania, which normally occurs at the tail end of a long-term bull market. Those who have missed the rally capitulate and begin to do things that they might not otherwise contemplate doing.”

Screen Shot 2018-01-11 at 7.15.58 AM

Markets are psychologically driven, he noted, but from a policy perspective, central banks and corporations are certainly helping to fuel prices higher.

“We have negative interest rates wherever we look, either on a real basis discounted for inflation or in nominal terms,” he said.

Combined with stock buybacks by S&P 500 companies to the tune of $3.5 trillion over the last 8 years, retiring 18 percent of all floating shares in the market since 2009, it isn’t surprising stocks have marched higher.

Now, with the recent GOP tax cuts reducing the corporate rate and freeing $2.5 trillion sitting overseas for potentially more stock buybacks, we’re looking at a burgeoning mania in the works.

Watch for Bond Market Troubles



Stocks & Equities

Todd Market Forecast The Best New Year Start Since 1987

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Posted by Steve Todd - Todd Market Forecast

on Tuesday, 09 January 2018 15:00

For Tuesday January 9, 2018

Available Mon- Friday after 3:00pm Pacific

DOW + 103 on 502 net declines

NASDAQ COMP + 6 on 214 net declines



STOCKS: Yesterday, I forgot to mention a fairly important indicator. The last 42 years in which the first five days were higher was followed by full year gains 36 times for an 85.7% accuracy rate. The average gain was 14%. In fact, this is actually the best start to a new year since 1987.

So, why so strong? There is great anticipation for major earnings gains as a result of less regulation and the recent tax cut.

That said, the internals are lagging, but that can go on for quite a while.

GOLD: Gold was down $6. The dollar rally is having an effect. We're switching our evaluation below.

CHART: The S&P 500 was higher again, but there were more declining issues than advancing ones (arrow). That can sometimes be an early warning of some sort of pullback. But, the chart itself, meaning the ultimate indicator remains bullish.

Screen Shot 2018-01-09 at 3.09.21 PM

BOTTOM LINE:  (Trading)



Stocks & Equities

Jeremy Grantham's Strongest "Bubble Burst" Alarm Just Went Off

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Posted by ZeroHedge

on Monday, 08 January 2018 06:58

In his latest letter to clients GMO's Jeremy Grantham conceded that stocks are on the verge of a "late bubble surge" melt-up, and as a result the upside from here before the next crash could be as much as 60% during the final phase of the current bubble.

20180103 GMO4

....continue reading HERE


....also from ZeroHedge: Europe Becomes Victim Of Russia's Newest Oil Strategy


Stocks & Equities

Significant Breakout of the $CDNX Index

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Posted by Rambus Chartology

on Thursday, 04 January 2018 06:25

Tonight I would like to start out by looking at the $CDNX, Canadian Venture Composite Index, which blasted higher last week and is following through this week. The reason this index is so important is because it not only has many junior precious metals stocks, but also many small cap energy related stocks as well as other speculative venture capital stocks from other sectors. This is a very good sign for the overall stock markets and commodities in general, as it shows risk capital is finding a home in which to park. This is another important clue that there is no top in the stock markets yet, because the risk on trade is still healthy.

CDNX Companies ftp://ftp.cdnx.com/SPCDNXIndex/Constituents.txt

This first chart for the CDNX is a daily look which shows an eight month H&S bottom in place. This chart shows the principal of Chartology at work. Remember a stock does one of three things. It is either building out a reversal pattern, a consolidation pattern or is in an impulse move. After eight months of base building you can see what happens when all the energy is released. There was no way anyone could have predicted that the current impulse move would start out like this one, but we did know that an impulse move would take place once the neckline was broken to the upside.




Stocks & Equities

What Does The Analyst Who Called For The 2016-2017 Market Rally Say About 2018?

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Posted by Avi Gilburt - ElliottwaveTrader.net

on Wednesday, 03 January 2018 06:31

As Ecclesiastes notes, “There is nothing new under the sun.” This, too, applies to the stock market.

The average investor trap is the same throughout whatever period you wish to review. Markets become overexuberant, see a correction, sentiment resets, and markets rally on to their next phase of overexuberance. It is really that simple. Yet, we overcomplicate matters by relying on economics and fundamentals, which have proven to be relatively useless at major market turning points. 

Whatever occurred in the prior year is often not going to be instructive as to what will occur in the upcoming year, and that is what you do when you rely on fundamentals and economics to linearly forecast 2018. Life is not linear, and neither is the stock market.

Also, many of the old market adages I hear year after year will not help you in 2018 either. Remember the old market saying that as January goes, so goes the rest of the year? How did that turn out in 2016? Even in 2017, January was a sideways month, yet the market went on to major gains. How did sell in May and go away work for you in 2017? Well, don’t say I did not warn you at the time.  This is what I wrote on Seeking Alpha:

Sentiment Speaks: If You Sell In May, Be Prepared To Buy Back What You Sell

Markets are really quite simple if you take a broad perspective approach. Society generally progresses through history, so we should expect that our financial markets would follow society’s general path of progression. However, there are periods of time of regression which make us forget that we are generally on a path of progression. This is why I continually try to point out that those who are able to rise above all the noise presented to you on a daily basis will likely do much better than the average investor.

During the last two years, we have heard a significant amount of bearish “noise.” There were a myriad of reasons presented as to why this market was going to imminently collapse, and I have listed them for you many times in the past. I guess someone forgot to tell Mr. Market. Yet, market participants continue to pour over old economic data or news events in wasted efforts to glean the next stock market directional cue. And, if the last two years has not taught you this lesson, then nothing likely will. Sometimes, it is hard to recognize that we wear blinders, as they become too comfortable to take them off. In fact, the story of the stock market is not much different than the movie The Matrix. But, I digress.

So, let’s look back at 2016-2017, and then consider how we see 2018 within that context.

While I was strongly bullish the SPX as we came into 2017, as we certainly had much higher to achieve before we struck the long-term targets we set years ago for this degree of wave structure, the SPX has surpassed our targets during the last few months of the year by approximately 4%. 

Whereas we were looking for a rally from the 1800 region to as high as the 2611 region, which would have provided a 45% gain, the market actually provided closer to a 49% gain from the lows struck in 2016. While I certainly wish we were able to be perfect, unfortunately, there is no such thing as perfection when dealing with non-linear systems such as the stock market. 

Yet, if I told you two years ago that I would be confident about a 45% rally in the stock market over the coming two years, but I may miss the last 4-5% of the market move, I think you would be quite happy with analysis that guided you confidently for 90% of that market move. And, when you consider that we caught that last 9% move in the IWM, well, I think we did quite well for 2016-2017 when most seemed to be looking down.

As for looking to the future, please recognize that by no means are we looking for the end of the bull market which began in 2009. Rather, we are now within wave (3) of the 5th wave of the larger degree 3rd wave within a 5-wave Elliott structure off the 2009 lows (as you can see on the monthly SPX chart). 


Double Click Chart for Larger Version



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