http://finance.yahoo.com/q/bc?s=%5ENYA&t=1m&l=on&z=l&q=l&c=
Obama will provide arms and
ammunition to the al-Qaeda rebels who now lead the opposition to the Syrian
state after saying Bashar al- Assad’s forces used chemical weapons in the civil
war against the al-Qaeda rebels.
The US
Once again we warn that if you
check your ETFs against the underlying commodities or sectors you will find
many have no correlation. We have heard
ETF advocates say their lack of correlation is due to the false values of the
commodities themselves and the “true market assessment” is from the ETF
traders. That ETF claim is not just
delusional; an eventual collapse of the ETFs will show that those ETF claims
are overt fraud. If your ETF does not
correlate with the underlying stocks or if the ETF does not give you a method
for weighting the values of the components then you are at extreme risk that the
ETF is either managed incompetently or fraudulently and you had better
beware. We predict these popular
derivatives will underlie a future financial crisis. They don’t allow you to plot most of them for
their entire history because they drop continuously over time so they have to
keep making 4:1 splits to keep them from going to zero value.
The stock market will rapidly lose
value as interest rates rise because the return on market risk will be dropping
two ways. First the risk free rates will
be higher. Secondly all the low interest
debt accumulated since 2007 will be rotating into higher interest debt. That is what killed Greece
Stocks suffer three ways with
higher interest rates; debt cost and inflation on profit margin, competition
from new bonds offering higher returns and low risk, and the end of the bull
market that always comes with higher interest rates and a decelerating economy. We in 2013 are entering a situation similar
to the end of Jimmy Carter’s last term.
We may have a sharp recession before the dust settles. But world currencies will also come under
attack again and George Soros will no doubt lead the attacks. Then he will switch back to gold. The stock market is now tightening the noose
around the FED’s neck. The Fed stands to
lose 60% or more of the value of their QE3 balance sheet assets sharply
increasing American national debt.
Last week we had a confirmed
Hindenburg Omen. A Hindenburg Omen
predicts a rising chance of a stock market crash because when a market has
reached beyond its grasp. The major
wealth market manipulators begin to reinforce one another to gain additional
profits by signaling which sectors are hot and which sectors will soon be
abandoned. When there are insufficient
funds to float all the boats they informally signal which overextended sectors
will be sunk. Consequently they polarize
the market and crush the small investors who have no idea the market is
manipulated. So the Hindenburg Omen is
an indication that the market is contrived not necessarily illegally but in
large part because of a type of group-think that evolves. Suddenly a particularly large group acts systematically
and abandons some stock groups in favor of others.
The Hindenburg Omen is not
predictable (or at least not in the past) because the manner in which they
reach a consensus is not given in any text book. Jim Cramer is currently a primary agent in
the creation of stock market group-think and he is the ultimate Hindenburg
Omen. When Jim Cramer ever becomes
bearish you know the stock market is up in flames.
The Hindenburg Omen is a complex
set of conditions that all must be met for an occurrence to be valid:
The number of New York Stock
Exchange 52-week highs and lows must both be greater than 2.5% of the total
issues traded that day. This is market
polarization into the haves and have-nots.
The smaller of the 52-week highs
and lows must be greater than or equal to 79.
The NYSE's 10-week moving average
must be rising. This is market extreme
polarization of the market.
The McClellan Oscillator, a measure
of market breadth based on exponential moving averages of advancing and declining
stocks, must be negative saying the haves have peaked and the average is
falling.
The number of 52-week highs cannot
be more than twice the number of new 52-week lows. Otherwise the market is not divided enough
and money is still flowing into the market.
The first occurrence of a
Hindenburg Omen must be matched by at least once more within 36 trading days
for there to be "confirmation" of the signal. This is a confirmation that it is persistent
and therefore probably running out of steam.
Once a Hindenburg Omen signal has
been confirmed, the probability of a market downturn within the next several
months of 5% or greater is 67.8%. There
is then a likelihood of progressively more severe drops.
Bloomberg reported that Gold
traders are the most bullish in two months since the retreat in equities from
an almost five-year high and a weakening dollar spurred demand for bullion.
Jim Cramer on the morning show June 6 indicated the best
thing for the market right now is to have FED thinking polarized and indecisive
with the job numbers not strong so the FED does nothing… yet not weak so
investors do not sell. He got his wish
and the market erased half the recent losses.
World Economies
http://www.bloomberg.com/news/
On June 9, Bloomberg ran a story with these headlines which
we have talked about in the months ago.
“China
http://finance.yahoo.com/q/bc?s=%5EN225&t=my&l=on&z=l&q=l&c=
FTSE 100 Index is close to its upper resistance level
reached previously in 2000 and 2007.
http://finance.yahoo.com/echarts?s=%5EFTSE+Interactive#symbol=^ftse;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
The German market is close to its upper resistance level
reached previously in 2000 and 2007.
http://in.finance.yahoo.com/q/ta?s=%5EGDAXI&t=my&l=on&z=l&q=l&p=&a=&c=
The French market indicates stagnation since year 2000. It still is down 50% from 2008.
http://in.finance.yahoo.com/q/bc?s=%5EFCHI&t=my&l=on&z=l&q=l&c=
The Swiss market indicates stagnation since 2007.
http://finance.yahoo.com/q/bc?s=%5ESSMI+Basic+Chart&t=my
The NYSE is similar
to the British and Swiss and indicates stagnation since 2007 given in excess of
15% inflation since then and no similar market advance. http://finance.yahoo.com/echarts?s=%5ENYA+Interactive#symbol=^nya;range=my;compare=;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
The SandP is
parabolic at old inflation adjusted resistance levels which were set in 2000
and 2007 and at this level it has not even matched inflation. Simple mathematics says that after a 66.6%
drop in value it has to go up 300% from the low to get back to breaking
even. The market (accounting for
inflation) was lower in 2007 than in 2002 and is lower now in 2013 than in
2007. And MSNBC/Pravda says we are
recovering because we are at the same stock market level we had in early 2000
before the Clinton
American Economy
June 11
Wholesale Inventories Apr 0.2% down from 0.4% This would be good if it was due to high
consumption but it is unfortunately due to a contraction in manufacturing/production.
Jun 12
MBA Mortgage Index
06/08 5.0% improved from -11.5%
Crude Inventories 06/08 2.523M improved from -6.267M -
Treasury Budget May -$138.7B worsened from -$124.6B
Initial Claims 06/08 334K down slightly from 345K +
Continuing Claims 06/01 2973K up slightly from 2952K -
Retail Sales May 0.6% up from 0.1% + but too much to be real
Retail Sales ex-auto May 0.3% up from -0.2% ++
Export Prices ex-ag. May -0.7% down again -0.5% +
Import Prices ex-oil May -0.3% down again -0.2% +
Business Inventories Apr 0.3% sharply higher from -0.1% -- signals a slowdown in manufacturing to cut inventories
Natural Gas Inventories 06/08 95 bcf lower 111 bcf -
Continuing Claims 06/01 2973K up slightly from 2952K -
Retail Sales May 0.6% up from 0.1% + but too much to be real
Retail Sales ex-auto May 0.3% up from -0.2% ++
Export Prices ex-ag. May -0.7% down again -0.5% +
Import Prices ex-oil May -0.3% down again -0.2% +
Business Inventories Apr 0.3% sharply higher from -0.1% -- signals a slowdown in manufacturing to cut inventories
Natural Gas Inventories 06/08 95 bcf lower 111 bcf -
The Markets June 13, 2013
The myth that the collapse of bonds will inflate the stock
market is about to be shattered. Anyone
getting into the stock market at these inflated values will take a hair cut
soon.
This market appears to be both polarized and topping due to
systemic churning to milk small investors. The
market had dropped more than 15% before Jim Cramer said to get out of stocks
when Obama was elected. You may recall
that Jim Cramer was criticized by Obama supporters at that time and his “They’re
nuts” comment is still part of the introduction to his show. At that time President Obama indicated his
ignorance of financial matters and his poor selection of teleprompter advisors
by claiming that PE is just a stock market index (not a significant financial
valuation ratio).
Volume on the latest market advances is extremely low. We will know when it has topped if the market
fails to top the previous high and we will know we are too late selling when
Jim Cramer says to sell.
Note that according to Wikipedia ,
Japan Greece
The recent Bulls- Bears indicator. More bulls than bears means more exuberance
or topping. That is a bearish sign!
World trade has been dead for four years (flat lined). Look at the last 5 years! It still looks close to zero growth.
http://www.bloomberg.com/quote/BDIY:IND/chart
Bernanke is pushing on a string. The FED has run out of leverage at close to
0% short term interest rates.
http://www.martincapital.com/index.php?page=graph&view=interest_rates_long
The VIX behaved this way in 2006 and 2007when the bubble
began to unravel but the market did not collapse until 2008. Again look at 5 years and you see the worst
is yet to come. The VIX would normally
top out above 30 before the bear market ends.
http://finance.yahoo.com/q/bc?s=%5EVIX&t=5y&l=on&z=l&q=l&c=
World market updates:
http://finance.yahoo.com/intlindices?e=europe
http://finance.yahoo.com/intlindices?e=asia
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