Time to short Stocks!

[miller]

Who's irrational? Screwed Again

 

[finebead]

John Hussman says....

“In recent weeks, the U.S. stock market has been characterized by an overvalued, overbought, overbullish, rising-yields syndrome that has historically been hostile to stocks. Last week, the situation became much more pointed. Past instances have been associated with such uniformly negative outcomes that the current situation has to be accompanied by the word ‘warning.’

“The following set of conditions is one way to capture the basic ‘overvalued, overbought, overbullish, rising-yields’ syndrome:

1) S&P 500 more than 8% above its 52 week (exponential) average
2) S&P 500 more than 50% above its 4-year low
3) Shiller P/E greater than 18
4) 10-year Treasury yield higher than 6 months earlier
5) Advisory bullishness > 47%, with bearishness < 27% ( Investor's Intelligence)

Balance of article here

Doc Hussman is a bright guy, but he has not been a great investor the last decade, he has been too bearish and out of the market (hedged in his terminology) for too much of the time. I had money with him for about 5 years, and then I figured out I was ahead of his return, what was I paying him for? Took my money out, never looked back.

We are in a bull market, have been since March '09. Fed is providing liquidity with low rates and quantitative easing, congress has provided 800 billion stimulus. You want to stand in front of that? Last hundred years, that's been a bad bet. Recover is real slow. Key word is "recovery". In the next year, we may have a 10% correction, but I'm betting market is up in a year. Then again, the bull market is almost 2 years old...

Is there trouble still out there? Yep. Banking. Banks hold too many houses not paying the note, either in foreclosure, or ought to be. Banks are not required to "mark to market" anymore. I don't know what they have on their balance sheets, nor what it's value is, so I won't buy a bank stock until I do know. If this trouble re-emerges (when?), it could negatively impact the whole economy just like it did in late 07 and 08. That's the problem, a potential disaster lying dormant.

I want a lot of money in the market, prefer dividend paying stocks or just buy DVY, an ETF of big dividend paying stocks that will give you easy diversification. Put a trailing stop under it, maybe 6% or what you are comfortable with. If the correction turns out to be 15% or 20%, it would look like a good move.

I think there is big trouble out there, but not this year, too much govt. support for the market this year. Wait until that goes away and we have to walk on our own.

But, that's just me. A worried bull right now.

 

[FireFly]

Follow The Money​

[ame="http://www.youtube.com/watch?v=eqPsnDEvun0"]TRIM TABS: "RETAIL INVESTORS ARE NOT COMING BACK TO U.S."[/ame]

 

[william the wie]

So the second the QE II target changes or QE ends the stock market is going to crash? Seems reasonable but unproven.

 

[The Rabbi]

That is funny. Do you really think Bernanke will ever let the interest rate rise? He has already signaled QE3 to drive them down further to drive employment yet employment is still in decline along with housing.

The total amount of gold in the world that is above ground is 4,501,104,720ozt. To visualize this imagine a single solid gold cube with edges of about 19 meters (about three meters short of the length of a tennis court). That's all that has ever been produced. Divided among the population of the world there are about 0.61658ozt per person, about 1.2 cubic centimeters each. At $1,400 per ozt this equates to about $863.23 worth per person on Earth.

The size of the US debt is $13.86 Trillion. Divide that by the world gold supply equals $3,079.24 per ozt. Now how much world debt is there? How many $Trillion of bonds are in the world. How much world paper currency is there? The US alone has over $111 Trillion in unfunded mandates. How many $Trillion worth of unfunded pensions are there? There are also over $600 Trillion worth of derivatives out there. About 20% of the world's gold was held by central banks before the crisis at which time over 80% of the worlds gold was in private hands. Of that 20% previously held by central banks of the world, only a small percent was held by the US central bank/Federal Reserve. Even with all the ads out that promise cash for gold, people still are not willing to part with their gold.

Bernanke has no power over long term rates, which have been rising both here and abroad.
Most of the rest of what you write is crap, mainly repeating things hawked by gold sellers.

You are the one repeating crap you hear on CNBC. For 2 years now their old bald head experts have been saying interest rates will rise & the Fed will let them rise. They were wrong & rates have been going down. You do realize the Fed has 2 policy goals for which it was created. They are in conflict, one is to print money & lower rates until we get unemployment to 5% which is full employment. The other is to keep the dollar strong. Over the past 40 years since the dollar came off the gold standard, necessary nonrenewable commodities have risen 8% per year against the US dollar. I see no reason for Fed to not at least maintain that level of inflation. I believe they will increase the inflation going foreword to split the difference in their 2 goals. They will create just enough inflation to keep unemployment heading down & keep the dollar in slow decline. That mean above 8% per year in nonrenewable commodities likely 12% annual inflation until 2013.

You are the one who is repeating crap & have been repeating crap all year. The only bubble is the US dollar. Google define market bubble. You will see that it describes US dollar, unfunded mandates & bonds exactly. You are a victim of group think. We just witnessed Republicans & Democrats extend entitlement spending & tax cuts. The increased US government bond sales has driven up bonds, not the lack of the Feds bond purchases. The fed will step up bond purchases to meet the increased demand shortly.

Gold price 12/14/10-$1396
Gold price 1/6/11-1358.
This masks the trend in gold prices, which is down. Gold has been down the last 3 sessions. This will continue.
Hope you sank your life savings in the metal!

 

[Toro]

Bernanke has no power over long term rates, which have been rising both here and abroad.
Most of the rest of what you write is crap, mainly repeating things hawked by gold sellers.

You are the one repeating crap you hear on CNBC. For 2 years now their old bald head experts have been saying interest rates will rise & the Fed will let them rise. They were wrong & rates have been going down. You do realize the Fed has 2 policy goals for which it was created. They are in conflict, one is to print money & lower rates until we get unemployment to 5% which is full employment. The other is to keep the dollar strong. Over the past 40 years since the dollar came off the gold standard, necessary nonrenewable commodities have risen 8% per year against the US dollar. I see no reason for Fed to not at least maintain that level of inflation. I believe they will increase the inflation going foreword to split the difference in their 2 goals. They will create just enough inflation to keep unemployment heading down & keep the dollar in slow decline. That mean above 8% per year in nonrenewable commodities likely 12% annual inflation until 2013.

You are the one who is repeating crap & have been repeating crap all year. The only bubble is the US dollar. Google define market bubble. You will see that it describes US dollar, unfunded mandates & bonds exactly. You are a victim of group think. We just witnessed Republicans & Democrats extend entitlement spending & tax cuts. The increased US government bond sales has driven up bonds, not the lack of the Feds bond purchases. The fed will step up bond purchases to meet the increased demand shortly.

Gold price 12/14/10-$1396
Gold price 1/6/11-1358.
This masks the trend in gold prices, which is down. Gold has been down the last 3 sessions. This will continue.
Hope you sank your life savings in the metal!

I think there could be a serious correction in the precious metals here.

However, that doesn't necessarily mean the gold and silver bull market is over. The last bull market in stocks saw the greatest one day decline since The Depression, and that turned out to be a blip in the long-term trend.

Maybe the bull market is over in precious metals, I don't know. They've run awfully far over the past decade. But it doesn't look like a typical end to a bull market, at least so far. Doesn't mean gold can't fall back to $1100 or silver to $22 though.

 

[editec]

I doubt that the RE problems can tank the whole market.

First of all, because they are known problems (unlike what happened in '08),

Secondly, it wasn't entirely the RE market than tanked the market back in '08.

I think it was derivatives piled on top of derivatives that really screwed the pooch.

I think gold and silver are both topped for a while.

 

[The Rabbi]

You are the one repeating crap you hear on CNBC. For 2 years now their old bald head experts have been saying interest rates will rise & the Fed will let them rise. They were wrong & rates have been going down. You do realize the Fed has 2 policy goals for which it was created. They are in conflict, one is to print money & lower rates until we get unemployment to 5% which is full employment. The other is to keep the dollar strong. Over the past 40 years since the dollar came off the gold standard, necessary nonrenewable commodities have risen 8% per year against the US dollar. I see no reason for Fed to not at least maintain that level of inflation. I believe they will increase the inflation going foreword to split the difference in their 2 goals. They will create just enough inflation to keep unemployment heading down & keep the dollar in slow decline. That mean above 8% per year in nonrenewable commodities likely 12% annual inflation until 2013.

You are the one who is repeating crap & have been repeating crap all year. The only bubble is the US dollar. Google define market bubble. You will see that it describes US dollar, unfunded mandates & bonds exactly. You are a victim of group think. We just witnessed Republicans & Democrats extend entitlement spending & tax cuts. The increased US government bond sales has driven up bonds, not the lack of the Feds bond purchases. The fed will step up bond purchases to meet the increased demand shortly.

Gold price 12/14/10-$1396
Gold price 1/6/11-1358.
This masks the trend in gold prices, which is down. Gold has been down the last 3 sessions. This will continue.
Hope you sank your life savings in the metal!

I think there could be a serious correction in the precious metals here.

However, that doesn't necessarily mean the gold and silver bull market is over. The last bull market in stocks saw the greatest one day decline since The Depression, and that turned out to be a blip in the long-term trend.

Maybe the bull market is over in precious metals, I don't know. They've run awfully far over the past decade. But it doesn't look like a typical end to a bull market, at least so far. Doesn't mean gold can't fall back to $1100 or silver to $22 though.

Markets are driven by greed and fear. The end of the bull was marked by greed, everyone trying to get in on the action.
Now we're going to see the fear as no one wants to be holding this stuff.

 

[Toro]

Generally bull markets end when monetary conditions are tight, not loose at the beginning of a tightening. Maybe it's different this time, I don't know. I am short silver here for a trade. But this isn't what tops usually look like.

 

[The Rabbi]

Generally bull markets end when monetary conditions are tight, not loose at the beginning of a tightening. Maybe it's different this time, I don't know. I am short silver here for a trade. But this isn't what tops usually look like.

So what do they look like?

 

[FireFly]

Bernanke has no power over long term rates, which have been rising both here and abroad.
Most of the rest of what you write is crap, mainly repeating things hawked by gold sellers.

You are the one repeating crap you hear on CNBC. For 2 years now their old bald head experts have been saying interest rates will rise & the Fed will let them rise. They were wrong & rates have been going down. You do realize the Fed has 2 policy goals for which it was created. They are in conflict, one is to print money & lower rates until we get unemployment to 5% which is full employment. The other is to keep the dollar strong. Over the past 40 years since the dollar came off the gold standard, necessary nonrenewable commodities have risen 8% per year against the US dollar. I see no reason for Fed to not at least maintain that level of inflation. I believe they will increase the inflation going foreword to split the difference in their 2 goals. They will create just enough inflation to keep unemployment heading down & keep the dollar in slow decline. That mean above 8% per year in nonrenewable commodities likely 12% annual inflation until 2013.

You are the one who is repeating crap & have been repeating crap all year. The only bubble is the US dollar. Google define market bubble. You will see that it describes US dollar, unfunded mandates & bonds exactly. You are a victim of group think. We just witnessed Republicans & Democrats extend entitlement spending & tax cuts. The increased US government bond sales has driven up bonds, not the lack of the Feds bond purchases. The fed will step up bond purchases to meet the increased demand shortly.

Gold price 12/14/10-$1396
Gold price 1/6/11-1358.
This masks the trend in gold prices, which is down. Gold has been down the last 3 sessions. This will continue.
Hope you sank your life savings in the metal!

Rabbi should have bought gold this morning instead of posting this nonsense. Gold rose $25 from it's morning lows where I bought it today. The workforce has shrunk dramatically in recent months even as our population increases. Jobs numbers were dismal & that is bad for the dollar. Unless you have been under a rock you may have notices the national debt increased $200 billion in the past month. That rate of debt creation is 38% faster than previous months & we are still loosing jobs. Maybe you should go crawl back under that rock.

 

[Zander]

They are always different, that is why they are unpredictable. If they always "looked" a certain way they would be predictable. ......I think that is why Toro used the word "generally".

 

[The Rabbi]

You are the one repeating crap you hear on CNBC. For 2 years now their old bald head experts have been saying interest rates will rise & the Fed will let them rise. They were wrong & rates have been going down. You do realize the Fed has 2 policy goals for which it was created. They are in conflict, one is to print money & lower rates until we get unemployment to 5% which is full employment. The other is to keep the dollar strong. Over the past 40 years since the dollar came off the gold standard, necessary nonrenewable commodities have risen 8% per year against the US dollar. I see no reason for Fed to not at least maintain that level of inflation. I believe they will increase the inflation going foreword to split the difference in their 2 goals. They will create just enough inflation to keep unemployment heading down & keep the dollar in slow decline. That mean above 8% per year in nonrenewable commodities likely 12% annual inflation until 2013.

You are the one who is repeating crap & have been repeating crap all year. The only bubble is the US dollar. Google define market bubble. You will see that it describes US dollar, unfunded mandates & bonds exactly. You are a victim of group think. We just witnessed Republicans & Democrats extend entitlement spending & tax cuts. The increased US government bond sales has driven up bonds, not the lack of the Feds bond purchases. The fed will step up bond purchases to meet the increased demand shortly.

Gold price 12/14/10-$1396
Gold price 1/6/11-1358.
This masks the trend in gold prices, which is down. Gold has been down the last 3 sessions. This will continue.
Hope you sank your life savings in the metal!

Rabbi should have bought gold this morning instead of posting this nonsense. Gold rose $25 from it's morning lows where I bought it today. The workforce has shrunk dramatically in recent months even as our population increases. Jobs numbers were dismal & that is bad for the dollar. Unless you have been under a rock you may have notices the national debt increased $200 billion in the past month. That rate of debt creation is 38% faster than previous months & we are still loosing jobs. Maybe you should go crawl back under that rock.

Down 1.30 on the day. GLD down as well. This marks the 4th straight down day for gold and GLD.
Now go sink your life savings into gold, you gold bug.

 

[The Rabbi]

They are always different, that is why they are unpredictable. If they always "looked" a certain way they would be predictable. ......I think that is why Toro used the word "generally".

If they're always different then by definition there cannot be a "general way" they look.
Bull markets end not with a bang but a whimper. But the increased volatility we've seen and the downward movement, coupled with fundamentals tells me the boy is going down big time.

 

[Toro]

Generally bull markets end when monetary conditions are tight, not loose at the beginning of a tightening. Maybe it's different this time, I don't know. I am short silver here for a trade. But this isn't what tops usually look like.

So what do they look like?

I think we are at a near-term top, but you could be right. This could be THE top.

Usually tops occur when monetary conditions are tight, there has been an explosive move upwards followed by a period of consolidation, i.e. sideways movement, then a plunge.

There was an explosive move in silver but not in gold. The other two conditions do not exist.

Also, the public is usually all in. But very few people actually own gold, including professional investors. But maybe that doesn't matter this time.

 

[Zander]

They are always different, that is why they are unpredictable. If they always "looked" a certain way they would be predictable. ......I think that is why Toro used the word "generally".

If they're always different then by definition there cannot be a "general way" they look.
Bull markets end not with a bang but a whimper. But the increased volatility we've seen and the downward movement, coupled with fundamentals tells me the boy is going down big time.

I agree the market should go down, but that doesn't mean squat. Markets are irrational. I won't be surprised if it goes higher first.....

 

[Paulie]

The Fed has created unprecedented amounts of new money, and have still hinted at even MORE quantitative easing. And many other central banks around the world have had similar policy. Why SHOULDN'T metals continue higher?

 

[Toro]

The Fed has created unprecedented amounts of new money, and have still hinted at even MORE quantitative easing. And many other central banks around the world have had similar policy. Why SHOULDN'T metals continue higher?

The bear case on the precious metals would be that with the economy getting better, interest rates will rise and there will be less fear, which are bearish for the PMs. I think there is at least some truth to this. I think the economy is improving.

Also, the technicals on the PMs are breaking down.

 

[Zander]

The Fed has created unprecedented amounts of new money, and have still hinted at even MORE quantitative easing. And many other central banks around the world have had similar policy. Why SHOULDN'T metals continue higher?

Because markets have nothing to with "fundamentals" or other nonsense like reality.

 

[william the wie]

The Fed has created unprecedented amounts of new money, and have still hinted at even MORE quantitative easing. And many other central banks around the world have had similar policy. Why SHOULDN'T metals continue higher?

Because markets have nothing to with "fundamentals" or other nonsense like reality.

QFT