Black Monday

[Entrep]

2...Low Volatility: One might think that low volatility is good for the average investor, but it simply isn't so. "tends to precede powerful reversals that can wipe out investors, as was the case in 2000 and early 2008, Right now, the S&P volatility index, known as the VIX, is about 15, and has been in that low territory since mid-January. The normal range is between about 20 and 40.

Speaking of VIX

Just has the largest 3 day drop on record, ever.

Attachment 12286

[bull....]

Basically..with 48 years of investing under my belt I have to sadly admit that I do not understand this current equity market..I take heed of 'good' advice from Buffett (I never thought I would ever recite him)..Don't invest in something you don't understand..
Although I have been mostly a TA investor these past 20 years, I'm still hot-wired to fundamentals...Another negative of being a TAer in this volatile market is the fact the NZX technological archaic system doesn't allow me to buy or sell fast enough when my buy/sell signals are triggered.The bots beat me now.

Is the Bull market near it's end-game?

I current have 34 "Ducks" and when they start to line up in a row the bull market cycle top is near.

To date my Ducks are all over the place suggesting the Bull Market Cycle is still got some distance to travel.However what is disturbing is the very good management (so far) by the Central Banks which upset my Ducks.. Central Banks are playing a game of wack a mole (In my case Mole = Duck)..Every time a specific "duck" (Mole) lines up, the Central bank reacts and manages (manipulates) to pull it out of the line..I'm old school and still believe that manipulation creates an artificial environment which restricts systemic communication channels, thereby causing bubbles to emerge in specific sectors within the economic systems and with it comes a real risk of bubbles unexpectedly bursting. We had bubbles for some time now and investors have got use to them floating invisibly around them reciting that a very low interest rate justifies the very high values. The best scenario are the bubbles degases over time (Central bank's "bubble management" ultimate goal).

Anyway....Below is a copy of my 34 Ducks (I wrote this and added to it over many years)...enjoy

Signs a Cyclic Bull Market Cycle is Ending.


1...Average life span 3.8 years..Bull Market's End is Overdue 9.25 years old as at 06/06/2018
2...Low Volatility: One might think that low volatility is good for the average investor, but it simply isn't so. "tends to precede powerful reversals that can wipe out investors, as was the case in 2000 and early 2008, Right now, the S&P volatility index, known as the VIX, is about 15, and has been in that low territory since mid-January. The normal range is between about 20 and 40.
3...Short Selling Plummets: ..When you have a market where investors are all in, there will no longer be short covering as there is little available money left.
4...Insider Selling Spiking: Recent insider trading tilting strongly toward selling is a very bearish signal.
5...Very Bullish Sentiment: unusually high sentiment indicators measuring investor sentiment typically signals a market top. Remember Sir John Templeton’s legendary quote: “Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” Sentiment is a powerful indicator of where a bull market is in its lifespan, and sentiment improves with age.
Euphoria comes when expectations broadly are too positive and perceptions too rosy.
6...High P/E ratio
7...Know that when everyone finally concludes things will get better forever, the bull market has now transitioned from mid to late phase.
Media portrays it's readers feelings and when fundamentals deteriorate no one notices (except insiders) until much later when the company reports are released.
8...New Expressions emerge like "new era", “ paradigm shift", "permanently high plateau", "end of the business cycle" and “It's different this time”
9...Paradoxically, future P/E may be low, (due to overly optimistic projections for the next 12-month earnings) ...however trailing P/E and P/E calculated based on averaged earnings over past 3, 5 or 10 years are always high, usually above 20, toward the late phase of the bull market.
10...the overall stock market becomes irrationally exuberant.
11...The most important thing to do in a bull market is to hold. Don't sell your positions too quickly for a small profit; wait until everyone is finally on board and the economic outlook appears rosy.
12...Watch for the lagging (defensive) stocks that keep rising against the leading (cyclical) stocks that are starting to fall....Defensive stocks are typically those in the Consumer Staples, Healthcare, and Utilities sectors;... cyclical stocks are typically those in the Materials, Industrials, and Financial sectors.
13...Increased number of IPO's ... Entrepreneurs time their IPOs at the peak of the business cycle, to take advantage of investor euphoria to raise as much cash for themselves as possible.
14...the IPO quality gets poorer and poorer toward the end of the bull market.
15...Increased Mergers and acquisitions at this point in the corporate-profit and bull-market cycle when “financial engineering” takes over as a driving theme. Here, corporate productivity is already high, the rapid demand surge after a recession is past and profit margins near peak levels, while financing is cheap and cash piled high at companies and private-equity funds. Transactional ferment raises the corporate metabolism, enforcing discipline on the active use of capital, leading to purchases, sales, aggressive share buybacks, spin offs and initial offerings (IPO's) – tipping, eventually, toward recklessness.
16...Beware of rational optimism.,,,, The switch from rational pessimism during the climbing the wall of worry to that of reasoning why the Bull market will continue.
17...Denial of bad news....use of the “rational” excuse to buy up “cheap” shares
18...A long thaw to reality.
19...A change from Bull to Bear cycle is hard to recognise A market top (or market high) is usually not a dramatic event. The market has simply reached the highest point that it will, for some time (usually a few years). It is retroactively defined as market participants are not aware of it as it happens. A decline then follows, usually gradually at first and later with more rapidity.
20...A classic indicator that the Fed has tightened too much is an inverted yield curve (i.e., short-term rates higher than long-term rates)...This indicator is the most reliable in modern history and suggests that a recession may be imminent when the yield curve inverts, Often the curve reverts back before the recession starts reinforcing investors bullish beliefs.
21...Unemployment Rate V Natural rate of Unemployment....Average 2 yrs after the below crossover.
22...The emergence of the nadir in unemployment rate... the statistical US unemployment nadir range is 3.3% through to 5.8% (Krugman)..The Unemployment Rate Nadir (bottom) occurs on average 8 months before a recession...see here for a complex method https://imarketsignals.com/unemploym...nd-recessions/
23...Conference Board’s Leading Economic Index. a weighted average of 10 indicators.This index has, prior to seven of the past eight recessions, dipped below zero “with few false alarms.”
24...Stock breadth ,..An indicator when the market is still advancing, but the number of stocks making new highs is less than the number making new lows. Usually happens when the tendency for investors to rotate from smaller, riskier issues into blue-chip, This deterioration in breadth shows up in things like the number of stocks making 52-week highs or being above the 200day moving average (stock code NYA200r).
25....DAGS, short for Dynamic Linearly Detrended Enhanced Aggregate Spread fall to below 200 (leading indicator) and to 0 and below (more likely a lagging indicator)..(Robert Dieli)
26...The break in uptrend (curving over) of the BCI ( Business Cycle Index)
27...Buffett Indicator..shows market over/undervalue, compares market growth against GDP growth...
28.....Very long leading indicator is the NAHB Housing Market Index. A top confirmation and subsequent reversal signals an economic downturn severe enough to be a recession within the next 2 to 3 years.. The last 33 years there has been 4 tops and the reversal that followed, 3 out of the 4 predicted correctly that recession occurred..There was one failure (1994 top).....70 on the index seems to be the topping out area.
29...Real Median Household Income (related to % employment) increases and peaks near a recession..A change downwards from a primary uptrend is an indicator warning..(not a leading indicator but a confirmation indicator).
30...Recession begins during a central bank monetary tightening cycle peak not during a monetary easing cycle nadir https://seekingalpha.com/article/408...aring-end-game.
31...Personal savings trend downwards during economic good times and bottom out just before a recession...Savings trend up during a recession and the following recovery period...
32... Corporate Debt to GDP. Level rises until beginning of recession..43%+ seems to be the warning of the end game (chart).
33...Very late cycle sign..Banks' willingness to lend to consumers moves lower despite Central banks cutting rates.
34...Large discrepancy (high negative %) result.. Corporate (CEO) confidence minus Consumer confidence. -60% or more bottoming out (nadir) is warning signal.










Ref
the daily ticker..http://finance.yahoo.com/blogs/daily...113902025.html
Money morning..http://moneymorning.com/2013/03/04/five-signs-the-bull-market-is-getting-close-to-topping-out/
Seeking Alpha...http://seekingalpha.com/article/1285...p-questionable
Wikihow...http://www.wikihow.com/Invest-in-a-Bull-Market
Equities.com http://editorial.equities.com/financ...-market-cycle/
Before its News http://beforeitsnews.com/economy/201...t-2496428.html
Wikipedia http://en.wikipedia.org/wiki/Market_trend
RBA http://rba-llc.com/pdf/80sBullRedux.pdf
http://lenkiefer.com/2017/12/11/plot...th-fred-and-r/
https://imarketsignals.com/2016/the-...ion-indicator/
https://imarketsignals.com/bci/

one thing is for sure hoop over 400 odd years of history tells us there will be a crash again one day and most people will lose all there paper gains. only difference this time it will be played out over days rather than one day due to circuit breaker rules.

[Entrep]

This thread is interesting continuing along the lines of what Hoop was saying

https://twitter.com/JohnStCapital/st...22650805673986

[bull....]

update on the year so far

YTD the best performing sectors to have had your money are cannabis and crypto both area's we mentioned late last year as opportunities and there have been some spectacular gains for sure and so quick lol .

also bio - tech small caps are getting attention now

As far as index go the russell index in the US is by far the best YTD as well as china and the nasdaq , unfortunately NZ has started the year pretty much as one of the worst markets to be in down 3% odd YTD against a 16% return on the russell small caps even aus is up 3%.
My guess is NZ is out of favour due to rising bond yields , NZ market did well when everyone wanted yield utility type companies but now its all about reflation trade and retail spending

anyway long way to go in the year things change all the time so DYOR

[bull....]

cannabis stocks looking good after hours. did you know many institutions cant even buy yet because of the federal laws still so when they change we might get a rush of insto money to push the stocks much higherrrr.

what that saying .... greed is good or is it weed is good

[ratkin]

5...Very Bullish Sentiment: unusually high sentiment indicators measuring investor sentiment typically signals a market top. Remember Sir John Templeton’s legendary quote: “Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” Sentiment is a powerful indicator of where a bull market is in its lifespan, and sentiment improves with age.
Euphoria comes when expectations broadly are too positive and perceptions too rosy.

This one is tricky, is there really bullish sentiment? Or is it a case of everyone is just confused about what to do with their money. Money going to the markets by default due to lack of other options. Most of the long term members here do not seem that bullish, if anything we are leaning the other way. so growing on skepticism perhaps?

[winner69]

Harbour Asset Long Short Fund apparently doing well this month ....somebody invested in them reckons they’ve gone more short than previous.

[peat]

This one is tricky, is there really bullish sentiment? Or is it a case of everyone is just confused about what to do with their money. Money going to the markets by default due to lack of other options. Most of the long term members here do not seem that bullish, if anything we are leaning the other way. so growing on skepticism perhaps?

I think there is a huge amount of complacency. The Greenspan Put seems to have morphed into an unstoppable monster with every challenge from the economy met with tsunamis of keynesian stimulus And this of course is politically expedient.

[bull....]

weeds up good again today against a overall small red day for the market at the moment. anyway we gotta ask ourselves the question if not now but soon.

I can buy some serious munchies with the gains ive made this year on weed the best stock gave people a 1800% gain since the election and most ranging from 50% to 600% in the last mth as people piled in after senator schumer gave his blessing so do i want to see these gains go up in smoke ? or will i try my luck and ride the wave for more highs. sh..t to ponder for sure maybe why a chew my munchies. short term , long term? who am I

[bull....]

CNBC just reporting the reddit crowd are going into pot now

Cannabis stocks soar as Reddit crowd that spiked GameStop jumps in, Tilray surges 25%

Shares of Tilray, Canopy Growth, Aurora Cannabis and Aphria are soaring on Wednesday.

https://www.cnbc.com/2021/02/10/cann...25percent.html

as I was saying last post some really big gains have already been made , so something to think about