Don’t believe the S&P rally hype - Should You believe the S&P rally hype

Don’t believe the S&P rally hype

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Don’t believe the S&P rally hype

Don’t believe the S&P rally hype

Don’t believe the S&P rally hype

Don’t believe the S&P rally hype - or should you really buy into it. We can say that its a case of Don’t believe the S&P rally hype , however. We need to take a closer look at the chart.

Even as stocks hit record highs, this rally is not all it's cracked up to be. We have lower volume and we have gone up to fast to quick. I think to think this is going to go to the moon from here, might be a bit of a crap shoot.

By Friday's market close, the Dow Jones Industrial Average closed a five-day streak of record highs, while the S&P 500 Index posted a four-day record of closing highs.

Many investors flocked to stocks during the rally, while big bank earnings and strong retail sales data drove stocks higher. However, we must say that infact the equity performance has actually been rather disappointing lately.

The issue here might be that we know on an absolute basis, one has nothing to show for having been in the market now since May of a year ago.

This is a constant mistake, and you must realise that Investors can get too bullish at highs, and extreme bearish at lows. You can go back and take a look in previous times if you do not believe us.
Our charts, actually show that if we look year-over-year change for key assets. Nothing earth changing has happend for us to go 'meaningfully higher'.....

so maybe it is a case of ' Don’t believe the S&P rally hype ' but just for now. Such indicators like Treasury bonds, gold and real estate—nearly all up in the double-digits— you must realise that stocks are the worst-performing major asset class since last May, up less than one percent. So that is why we are a little cautious here.

In looking at the S&P total return index, its trajectory falls below the S&P 30-year bond futures total return index.

The total return of just being in the bond market versus the stock market, no result, and yet again, all the volatility, if you adjust for the risk, it's not parity at all.

Plus the fact we have VIX at all time lows, and mentioned that to our VIP members just 24 hours ago. 

And when adjusted for inflation, we can attest to the fact that the S&P has still not taken out its March 2000 high, a record set during the tech bubble. Considering this was about 15 years ago this level is quite significant.

I would take a rocketship rally higher, and a meaningfully RALLY to start to compensate for the risk that's been associated with owning equities not only for the last 18 months, but for quite some time now.

Here is a chart of the S&P 500 with just 2 red days, and lower volume our analyts are starting to umm and ahhh here. Because due to that violent upwards move, and without it being back, and with gaps in the chart as well on the downside, something is fishy here it seems. [See the Chart below]

Don’t believe the S&P rally hype

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You may be in the camp that thinks, hold on, we are going up and that is the trajectory and we should rocket higher from here, to the moon. But that would not be a smart way to think, considering how volatile the market has been lately. The ups and downs has been enough for even the most steadies of hands type trader to get sea sick.....

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The Warren Buffett Way - Investing Like A Guru

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The Warren Buffett Way ?

The Warren Buffet Way

There is hardly a man in the street who does not quote Warren Buffettisms and hardly an adviser or investment product that does not claim an empathy with his investment style. But the truth is there is
truth is love him, or actually hate him, as some do. Warren Buffett is one smart dude.

Also he is one rich dude! That is plain and obvious to see, so he is worth listening to, so I will get to that in a minute.

It's not even very hard, it's impossible, because so many elements of his analysis are so subjective. Getting stocks right is a very personal thing and I'm afraid if you really want Warren Buffett to be your adviser or your fund manager then there is no alternative but to ring him.

But let's face it now, the chance you have to be a phone call away from this great man, is slim to none. Yes! I am sorry, that sort of access is off limits unless you can quickly tear off a million dollar cheque out of your bank book, and slip it in his top pocket while he is looking, of course.

So in other words, you are going to have to look for a cheaper alternative, which we have found. See below. Lets face it, You are not Warren, and probably will never get to such heights, even if you lived to the ripe old age of 300. But the man has a simple set formula that almost anyone can read, and apply and create success and riches beyond their wildest dreams.

Today "The Warren Buffet Way". It's about Warren Buffettism and how every man in the street drops his name and claims to invest like him. The truth is, there is only one Warren Buffett and only one person that has his skill, and it's not you.

Warren Buffett is considered to be one of the greatest investors that has ever lived and is consistently ranked among the wealthiest people in the world with a net-worth north of $72 billion. He is well known for his commitment to value investing, and when he gives recommendations, people listen.

The other day I came across a quote from him where he was advising people to invest as much as possible in something that everyone has access to, something , he says, in which we can never invest too much.

What is this amazing asset he’s so bullish on?

It’s you.

“Invest in as much of yourself as you can, you are your own biggest asset by far.” — Warren Buffett

You will never get a better return on life than when you truly invest in yourself. Here are some ways to help you make the most of your investment.

Stay healthy on all three planes: mind, body, spirit.

“You only get one mind and one body. And it’s got to last a lifetime. Now, it’s very easy to let them ride for many years. But if you don’t take care of that mind and that body, they’ll be a wreck forty years later, just like the car would be.” — Warren Buffett

It all starts here. You need to be firing on all cylinders, or else you won’t be able to get the most of out your life.

This doesn’t have to be difficult or time consuming. Just be mindful about improving yourself. Here are some simple ways to do it:

Mind: read a book (even if it’s just one page a day), journal, come up with ideas.

Body: exercise (even if it’s just for 7 minutes), eat good food, drink plenty of water, get a good night’s sleep.

Spirit: pray (it doesn’t matter if you’re religious or not) or just says ‘thanks’, be kind to people, write a gratitude list.

Cultivate positive habits and stick to them with a daily routine.

How much better do you feel on the days that you do something good for yourself? Perhaps it’s the days that you exercise or maybe when you are really focused at work. Your days just seem to go smoother, don’t they?

You can have that every day. It’s just a matter of deciding what you want to do and following through with it.

Start small. Decide on one positive habit that you can start doing today, and then do it. Then do it again tomorrow. Once you’ve mastered one habit, you can put that momentum toward building a way to have the best day ever (every single day).

Never stop learning.

One of the greatest secrets to Warren Buffett’s success is that he is continuously learning. Charlie Munger, the vice chairman of Buffett’s Berkshire Hathaway Corporation, once said this about his legendary colleague:

“Warren Buffett has become one hell of a lot better investor since the day I met him, and so have I. If we had been frozen at any given stage, with the knowledge we had, the record would have been much worse than it is. So the game is to keep learning, and I don’t think people are going to keep learning who don’t like the learning process.”

Most people think that real learning ends when school is over but they are selling themselves way short. Life should be about continuous learning, and there are many ways for you to do this:

-- Attend conferences, seminars, and meet-ups.

-- Take a free online course.

-- Talk to people and ask them questions (listen more than you talk).

-- Research something you are interested in.

-- Travel.

Surround yourself with excellence.

“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.” — Warren Buffett

It’s been said that you’re the average of the five people you spend the most time with. In other words, who you spend time with influences the person you become.

Take a look at the people in your life right now and ask yourself these questions:

Are they making you better or are they bringing you down?

Are they mostly positive or are they typically quite negative?

Do you feel better when you are around them or do you feel worse?

If someone is a negative influence on you, then you have to kick them to the curb (or severely limit your time spent with them). This can be very hard when it’s a family member or co-worker, but if you want to become the best version of you, you are going to have to take action.

Spend time getting to know yourself.

“I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. so I do more reading and thinking, and make less impulse decisions than most people in business. I do it because I like this kind of life.” — Warren Buffett

Your time is extremely valuable and precious. Spend some of it getting to know yourself better. These practices can help you find out who you truly are:

-- Meditate (even if you think you can’t meditate).

-- Do yoga.

-- Write morning pages or journal.

-- Find hobbies that you enjoy (and actually do them).

Do what you love to do.

“There comes a time when you ought to start doing what you want. Take a job that you love. You will jump out of bed in the morning. I think you are out of your mind if you keep taking jobs that you don’t like because you think it will look good on your resume. Isn’t that a little like saving up sex for your old age?” — Warren Buffett

You only have one life to live, why not live it to the fullest?

Invest as much as you can in yourself starting right now, and you will see returns beyond anything you could dream of

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A Spooky Stock Market Indicator - Halloween Idicator

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A Spooky Stock Market Indicator ?

Are Followers of the so called Halloween Indicator about to time their move back into the market soon. Let us explain below....

We talked about this in our recent ==> VIP NEWSLETTER HERE just a few days ago. 
 
It seems that alot of the Wall Street gurus are obsessing about a possible bear market and when to get out of the stock market, however there is one group of investors poised to get back in.  Those who sold in May might be looking to return to stock market. I am referring to followers of the so-called Halloween Indicator, Let us explain exacty what this is, if we do have your attention.

The Halloween indicators is based on the historical tendency for the stock market to produce almost all of its net returns between Halloween and the May Day six months later. Its sometimes known at the BEST PERFORMING time for the market, in a calendar year. It promotes the action for a trader to  “Sell In May and Go Away” {or get out of the market and go to cash} for six months, safely parked in cash until reinvesting it the subsequent Halloween. {where a trader would get off the sidelines, and buy back in to the market}

This Indicator has worked like a charm this year, of course. The Dow Jones Industrial Average DJIA, +0.20%   is 10% lower than where it was last May Day, which means that followers of the Halloween Indicator this year are that much ahead of a buy-and-hold strategy for doing nothing more difficult than go to cash when the calendar turned from April to May.

That’s remarkable, since most market-timing strategies don’t even equal the market’s return, much less beat it. So there is some respect that one needs to give this helpful statistic.

Though “Selling In May and Going Away” doesn’t always work out as well as it did this year, it has done so far more often than not. One academic study, for example, found statistically significant evidence of this pattern’s existence in the histories of the more than 100 countries around the world that have stock markets. In the case of the United Kingdom, that meant the study analyzed data back to 1694. That is a pretty good statistic we think, as the data on our charts does not go back that far. :-)

This impressive history might very well convince you to follow this indicator mechanically, which would mean waiting until the last trading day of this month before re-investing the cash raised in the spring. But on some occasions that was either too late, or two early for the trade to take place. Two advisers I track have been unwilling to leave well enough alone, however, and over the last decade have created timing systems that attempt to pick better re-entry points than Halloween (and better exit points than May Day).

What you need to use in conjunction with the HALLOWEEN INDICATORS is the weekly charts and a MACD indicators to pinpoint the precise day on which to enter stocks in the fall and exit in the spring. (MACD is a short-term momentum indicator, standing for moving average convergence divergence.) MACD is one of the signals large funds and institutes use to time the market as well.

This market timer of this seasonal pattern dating back to mid-2002, nearly 13 years ago. The HFD calculates their returns on the assumption that, when they are invested in stocks, they earn the return of the Wilshire 5000 Index W5000, did quite well. It did not win every year, but the years everything aligned it made significant profits. It is in no way a guarantee that things will turn out the same in 2015 this year.

Also when you take a look at the stock market or the S&P 500 on a weekly chart you can see that this chart would agree, with this indicator or Halloween factor. However, right now or this year in 2015 we seem to be stuck in an annoying range, which is quite violent, and neither the BULLS nor the BEARS seem to be winning.

 You can see the MACD is still on a weekly SELL signal, but one thing about this which is blatenly obvious, is the the MACD is starting to really turn up hard. So that could be a warning sign for us. Eventually we are going to have to bust out of this violent range. See the chart below.....

SPX WEEKLY CHART

Almanac Investor’s modification of “Sell in May and go away” a saying that is basically talks about retail and some professional investors who sell in MAY, a time on the stock market, when seasonally things start to get really bearish, or negative, and then come back around HALLOWEEN time to place fresh buys on the market.

 Mechanically going to cash every May Day and re-entering the market on Halloween would have done slightly better with a lot less risk if you had done this over the last 20 years. However it does not work every year looking back. — But when you look back, if you had followed these rules you could have comes out well ahead of buying and holding on a risk-adjusted basis (as indicated by a higher Sharpe Ratio).

The Halloween Indicator did even better still, producing an 8.8% annualized return over the same period — 1.6 percentage points per year more than a purely mechanical application of this seasonal pattern, and 1.4 percentage points ahead of a buy-and-hold. Even better, this market-beating return was produced with 39% less risk, which means it’s even further ahead of a buy-and-hold on a risk-adjusted basis.

While the Almanac Investor’s modification of the Halloween Indicator performed less well than Harding’s, producing a 7.4% annualized return while incurring 36% less risk than the market itself, it still came out ahead of buying and holding, however, on both an unadjusted and a risk-adjusted basis. And, on an unadjusted basis, it did better than the mechanical version of the Halloween Indicator.

What about this coming October? I guess, no one really knows the future. If we did, everyone would just quit their jobs and trade the stock market right!? But, there’s no way of knowing when in coming sessions the exact time of getting back into the stock market. In past years, however, a preferred re-entry date was on Oct. 16, using this so called Halloween indicator and only then if MACD was on a buy signal. If it was not, he would delay re-entry until it was. So this is an interesting element because that date is literally just a few days away. Not only that, things are starting to line up as well.

 Another fact to consider is that a trigger for a re-entry can sometimes happen as early as the beginning of October, if the MACD is on a buy signal. That’s not yet the case, given the market’s recent weakness, including a Dow decline on the first trading day of October. But stay tuned: A sharp rally for more than a day or two [if that was to occur] could very well persuade a flash buy signal when you look at the charts above...

 Yes, its not spooky at all really. Halloween is a time for giving, and maybe the market is about to deliver a present and make some bulls out there very happy, While at the same time....punch the bears in the guts. But OPPORTUNITIES are presenting themselves very nicely and if I had to say one thing here, even though the sell off in AUGUST swooped in fast on us, it still does not mean that the end of the BULL MARKET is here. Of course that could turn out to be a horrific call, in a few months from now, but the action we see and the range we have been stuck in for weeks now eventually has to experience a big break, either up or down, and my guess is that we are weeks away from this sort of move.  


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six year bull market - Astonishing six year bull market and counting

Six year bull market - Astonishing six year bull market and counting

Can the six year bull market Continue?

This six year bull market has been the worlds worst nightmare for bear investors. Since 2009 the market basically keep treadling up higher, and every time we see a dip, the bears keep calling it a CRASH, only to see that weeks later they are again proven wrong, and we see new buyers come in, which takes us up to highs yet again.

It’s easy – maybe too easy – to mount a damning case against today’s six year bull market. We can see the point, but when you see a chart like below, go from the BOTTOM LEFT TO TOP RIGHT, that is not a bearish situation, and its probably safe to think this six year bull market is not finished yet. Not at all!

above : six year bull market - weekly chart

Valuations stand at lofty heights and, judging by the lifespan of past rallies, this six year bull market looks positively geriatric.

But despite all the nay saying, it may not be time to bolt out of stocks just yet. Many analysts – and not just the usual perma-bulls – say that today’s tired old bull market appears quite capable of trudging even higher.

One important reason for optimism is that stock prices are still cheap in comparison with bond prices, according to John Higgins of Capital Economics. He argues that stocks are likely to continue to be a relative bargain even if the U.S. Federal Reserve begins to raise interest rates later this year.

But we have had six year bull market before. In fact they have lasted for much longer, as you may not know, stock market in the end are not designed to go down. Over the long run, stock markets will have plops, drops, crashes, and miniature dips. However over the longer term, they are designed to go in an UPWARD trajectory.

We can say that the market will crash in this October, but a six year bull market I think will not just die in the ass, in one day or one week. Normally if a six year bull market is about to see trouble ahead you get lots of warning before hand.

So far with the trouble in GREECE and CHINA as well this six year bull market looked to be in serious doubt and trouble. But as the days linger on, you can see that what we are seeing right now even with the country of GREECE and its country in serious risk of full financial collapse is that all it could mean is just a six year bull market dip, before higher prices are seen at the end of the year.

Say it out aloud slowly,  ' six year bull market ' ... it sounds funny, but when you say it out aloud two or three times to yourself, subliminally it could be telling you more than you realize. :-)


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Market Warning Us Here

Is the market warning us here?

This is a chart I normally only share with ONLY our  VIP ELITE GROUP  -- HERE!

However I thought it was interesting that the breath of most equities belonging to the S&P 500 are telling us after such a massive run on the market, we could be about to experience a bit of profit taking or pulling back on the market.

As I have previously written on my blog, yes we are in a BULL market, but BULL MARKETS do not go up in a straight line. Some bulls have trouble with this, however it is what it is.

As you can see the A50R is up at OVERBOUGHT areas, and at 81.00 I would be thinking its an area that smart money will start to take profits, and talking to some of my colleagues we know what these guys are up to, and if we do experience a bit of a sell off in the next few weeks, it will mean our thoughts are correct.

Hope this helps.

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Repeating Patterns - Repeating Patterns in the charts

There is very low volume in the markets right now, the smart money is not in the market and the market is not really moving much at all.

Get use to this, as we are in the dog days of AUGUST and it is common for the volume to drop right off completely for a few months. Annoying, but there is nothing we can do about it. Just have to grit it out. :-)

While the market has not been moving much at all these last few weeks I have noticed something very significant, and that is when you ZOOM the S&P chart right back you can see that there is repeating patterns that have been occurring all year, but lately this seems to be the pattern. HIGHER LOWS, and then HIGHER HIGHS! Basically this one sentence is a good description of a bull market, however are these repeating patterns giving us a good picture of what is to come to the end of year! Well....we shall see.

repeating patterns in S&P 500

Sometimes the Simplest things do not jump out of the chart, but on this occasion they did! :-)



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Spx update - spx weekly update

spx weekly update

The market sold off into the weekend with talks about North Korea on the verge of war and the spillover from the Cyrus crisis.

Unemployment still remains a big problem and the market did not like that at all, and we still have a gloomy outlook. However when we take a look at the chart below, we can see the market even through the bashing, and bad news has remain pretty buoyant. Perhaps people are jumping to conclusions too soon, and we do not have a big reason to panic just yet.

It is clear the market is totally dislocated away from any bad news at the moment as a whole. There have been a few blips and blops along the way, however the market still has strength attached to its name.

spx weekly update

As you can see, we are still in a major bullish uptrend, and things are not looking too bad in the bigger picture. A few months back we even included the bull / bear ratio chart that convinced us we are still in a bull market. When you take a look at this chart you can see why.

This week was not good for the market, that is for sure. Further more it could even be the start of a much larger correction as we have been hinting. But for now the leader of the market the dow jones transportation average still remains above critical support and above the major averages.

It would be wise to monitor these support levels in the coming weeks, as a breach of these levels would not bode well for the markets.  But until that happens there is no real reason to throw hands up in the air and panic.


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us stock market today - all time stock market high

us stock market today - all time stock market high

The us stock market today hit an all time stock market high and news and media were going nuts!

I guess right now would be a good time to tell our reading NOT TO FALL IN LOVE WITH THE DOWNSIDE YET. Plenty more upside could be on the way soon! Time will tell. 

Have a look at the dow jones stock market today below, it hit an all time stock market high and got investors very excited. But what does this really mean?

us stock market today - all time stock market high

Even though the us stock market today hit all time stock market high today, it seems to be "steady as she goes" for the economy, but as you can see above even though the us stock market today hit all time stock market high today, its causing many people to party hard, but should they really be doing this?

The Dow Jones industrials hit all time stock market highs today, record highs not seen since before the 2008 financial crisis and it seems more and more investors are willing to take a punt on the stock market!

So is now the time to venture back into the water or are traders turning a blind eye to what is happening out there in the real world and the the current global economic problems we are facing in next 24 months.

Ben Bernanke was recently quoted as saying they will not CHANGE or MODIFY the current quantitative easing anytime soon, and should not expect maximum liquidity conditions to change as well and that is adding to the optimism of most analysts.

As you can see this pumping of money is keeping the markets afloat. With the us market today and all time stock market high 's seen, it is solidifying the chart below telling us we are still in a BULL MARKET, which started back in January 2012.

bull market showing

But on the downside, remember even in bull markets nothing goes up in a straight line, and that is a key point to remember. Also on the downside one must remember that there is a good chance of a correction soon, as many companies right now are way above their intrinsic values.


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Bull market or bear market - are we in a bear market

Bull market or bear market - are we in a bear market?

I see alot of analysts saying we are in the start of a bear market, or the market is looking bearish here. 

Forget the noise, it is best to follow the charts. And here is a good one as you will see below.

This is the bull / bear market indicator, and you can see just how good it has been for the last 10 or so years.

There is no guessing with this chart, you can clearly see we are currently in a bull market at the moment. See how the red and blue lines are moving up in tandem. That is a clear case that we are still in a bull market. 

bull market

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