Monday, May 11, 2015

May 15, 2015 We are now in the end game of this stock market bubble. The smart money has learned that we have seen the market top. The smart money has a lot of stock unload on the naive so whenever a stock gets near its high or the market is topping out again they sell their stocks near the old highs. That is why the market keeps topping out and volume is declining on advances, because there are fewer weak hands willing to buy. And when the ill informed weak hand buys near a high he gets depressed when the market drops. That psychologically conditions the weak hands to panic and sell before they accumulate large losses. That is why we see low volume each time the market approaches the old highs now and volume picks up on the declines. At some point most investors will see the writing on the wall and the market will plunge on high volume. Last October we had the first dry run plunge. The second panic could come any time now and it will be different because the sellers will come in five or ten percent lower than the previous highs. The third panic will be when Jim Cramer says, “Sell, sell, sell! They are all nuts!”

            All five indices we track are topped out and the cash flow shows they have peaked.  But only the NYSE cash flow gave the early warning sell signal last October.  We said then and have repeated it several times that it is an early warning signal and it would be this summer or fall before the early bird, Jim Cramer finally says, “Sell, sell, sell!”  By then we expect the market will be 20% to 30% off the highs.
            All the BS about the economy revving up is from wealthy investors who are tying to unload their stocks.  The Stupid Party’s economy is what you get with an American president that was endorsed by the socialist dictators of Cuba, and Venezuela. 
            “I am a Marxist Leninist and I will be one until the last day of my life.” “How can we help President Obama?”  -Fidel Castro
            “I shook Obama's hand and I said, 'I want to be your friend.' My hand is still outstretched. I am not Obama's enemy, but it's difficult not see imperialism in Washington.” -Hugo Chavez
            May 14   Wall Street's major indexes gave up early gains to end Wednesday's session flat lined.   The accelerating rate of decline in the growth of China’s economy projects to a recession, a “first time” capitalist economic decline, occurring before 2017 is over.   Of course under socialism the country remained one of the poorest in the world.
The Russell 2000 index cash flow is about to confirm the NYSE cash flow sell signal with a head and shoulder neckline breakdown.  The NASDAQ and STD and Poors cash flow indices are also weakening.
Yahoo Finance still could not produce the 5-12-15 stock index volumes for the NYSE, SandP, NASDAQ, and Russell.  How sad that they still could not fix their problem after two days.   Volume is important for computing momentum and cash flow, but there are other sources for good estimates.       
            Oil prices have declined before every US recession since the Great Depression.    It is due to the world-wide economic slowdown not fracking. The economies of the world are entering a severe recession which given President Obama’s incompetence, could end up being a great depression before Obama leaves office.  Obama can’t even get his new Trade Bill with Japan through his own “Stupid Party.”
            The Commerce Department announced the bad news Wednesday that business inventories rose 0.1 percent in March after rising 0.2 percent in February.   Unfortunately production will have to be reduced because in an economic deflation sales prices and sales both come down.  GDP growth will therefore be lower than Obama has been told.  Also both import and export prices have been declining putting pressure on profits in addition to the declining sales. 
            Bonds will collapse in value as the economy drives long term interest rates higher and the free-world FEDs all loose control of world interest rates.  On Squawk Box the commented on Venezuela and Russia as evidence of the stupidity of the leftists of the Stupid Party.  They asked, “How can anyone believe that socialism is good?”
            April retail sales fell flat and mall stores have been closing in droves.  The restaurant business is falling as consumers hunker down and feel the economic squeeze.
JOLTS – Potential Job Openings for March down to 4.994M from the already weak 5.133M in very cold February.   The Treasury Budget for Apr of $157.0B increased from $106.9B as Taxes came due. 
The May MBA Mortgage Index 05/09 fell another -3.5% as home sales fell just when they normally hit spring highs.  The USA lacks a Presidential leader and a snarling big mouth Stupid Party election win will definitely bring on a world depression as American influence will fade even faster.
            May 13  The International Energy Agency said OPEC and non-OPEC oil producers are just beginning their battle for market share.   They are hiking oil production to further suppress oil prices until fracking is a money losing process.
The Bank of England has downgraded its forecast for the British economy's growth this year to 2.5 percent.
Greece has fallen back into recession, as the economy contracted by 0.2pc in the first three months of the year.
The German economy grew by 0.3 per cent on the first quarter less than half the 0.7 per cent growth rate in the final three months of 2014.
The weary US stock markets are making their last gasp attempts to break into higher territory.
 
            May 12  Today we are beginning to see what we predicted a week or two ago that would so happen.  Interest rates are increasing in spite of the low FED rates in Western countries.  Rates are rising because the risk of a worldwide recession is increasing and a liquidity crisis is coming because all that low interest debt pumped into the western economies has gone into equities, sports cars, defaulted home loans, casinos, and high tech games, watches and worthless diversions that are even destroying the ambition and intellect of school children.   Even the German debt rates spiked this morning.  Because Yellen was too timid to stop QE and reverse it, the house of cards will eventually fall apart on its own.  The 10yr Bond rate was up over 11 % this morning.
http://www.bloomberg.com/quote/GDBR10:IND/chart
            May 11 Obama would help the entire world if he would just quietly resign.  No sane leader in the Mid East would back a moronic Obama plan that would give Iran nuclear weapons on any time table.  Obama is beginning to embarrass himself as well as Hilary and the rest of the stupid party who keep losing or deleting their email so as not to expose their stupidity, their graft and their illegal use of government agencies to spy on and harass Americans.   Obama had the NSA use their supercomputer to analyze all the telephone records of the friends and staff of Governor Christy.  They looked for any conversation that contained the words bridge, traffic, NJ, names of NJ towns or which implied collusion or conspiracy.  This was all completed in less than a month.  Two members of Christy’s staff have been charged but both say there was no conspiracy and the NSA conclusions are random errors.   Correction: The only conspiracy has been the Obama administration’s use of government agencies to harass and intimidate American citizens and numerous governors and other would be political opponents.
            Etsy brands itself as an online marketplace for unique goods, but the company may have counterfeit and infringement problems that eclipse those of other e-commerce giants such as Alibaba.   Shares were down 9% today.   "Our research indicates as many as 2 million items on Etsy may potentially be either counterfeit," Luria said.
            Oil prices slipped Monday as the dollar strengthened and analysts cautioned that the market’s recent rally will soon run out of steam.  Bloomberg says oil will retreat again to at least $25/barel as the global crude supply glut gets worse.  There are signs that US shale oil production is recovering.  Analysts talk of a growing disconnect between the futures market, which has gained more than 40 per cent since its January low, and the still growing physical supply glut.   Morgan Stanley said that there are growing supplies in the physical market, signs of increasing activity in US shale oil production and higher OPEC output coming on line.  The Cartel has vowed to increase productivity to drive out the American shale oil industry.  But at the same time Poland and other Eastern European countries are ready to exploit their enormous shale oil reserves if the American rigs can weather this storm.  In any event the world oil price will unlikely see $80/barrel for at least five years and could see $25 first if the OPEC group seeks to stop the worlds accelerating exploitation of shale oil.  The USA is currently but a drop in the barrel.
            The Consumer Sentiment in this 2015 stock market bubble is consistent with the 2000 bubble and the 2007 bubble.  But each bubble’s burst has deflated the wealth of the American consumer, because crony capitalism and government Treasury and FED financial manipulation has favored the crony capitalists.  Their latest gimmick is the Clinton Charity which pays out 80% in salaries and gets its contributions by delivering American favors to corrupt world leaders.
http://www.martincapital.com/index.php?page=graph&view=consumer_sentiment
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