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Why the bull market will be over by November

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From Justin Spittler, Editor, Casey Daily Dispatch:

“I want to talk about death.”

I heard an extremely successful trader say this last week. He was speaking to a room full of investors and business executives. The group included Doug Casey, Bill Bonner, E.B. Tucker, Nick Giambruno, and David Forest. There were also two other traders from Wall Street in the building.

We all came together to attend an exclusive investing conference in Miami’s South Beach. There, we discussed huge money-making opportunities that almost no one else is talking about. We also talked about the biggest threats facing investors.

Over the next few days, I’ll share some of the best ideas from that conference with you. But first, let me tell you how we got on the subject of death. You see, this trader wasn’t talking about a loved one who recently passed away… or even the idea of death…

He was talking about the death of the bull market…

Specifically, the bull market in U.S. stocks. Yes, the one that just turned nine years old last month.

Now, I know many investors can’t imagine this bull market ending. That’s because U.S. stocks have rallied despite sky-high valuations, weak economic growth, and record debt levels.

Nothing could get in its way. As a result, many folks think this bull market will run forever. But that couldn’t be further from the truth.

As you’re about to see, this trader thinks that this bull market is running out of steam fast. In fact, he believes the market could top out in “six to seven months.”

I’ll tell you why in a second. But let me first introduce this mysterious man.

I’m talking about Jeff Clark…

Jeff is a master option trader. He used to manage millions of dollars for investors in Silicon Valley.

He also has an incredible track record. You see, Jeff’s generated 389 winning trades since 2004, which is when he started sharing his trading ideas with the public. That includes 82 triple-digit winners and 296 double-digit gainers.

As if that weren’t impressive enough, remember that this track record covers 2008 and 2009, which were two of the most volatile years ever for stocks.

You see where I’m going with this. In short, it pays to listen to Jeff, especially when the market gets turbulent.

And right now, he’s saying that the U.S. stock market is wobbling on one leg. The warning signs are everywhere.

Unfortunately, I don’t have time to share all those warning signs with you. But I can tell you one of the biggest reasons he’s turned bearish…

Volatility has come storming back…

You can see what I mean below. This chart shows the CBOE Volatility Index (VIX) since the start of last year.

The VIX, or what most people call Wall Street’s “fear gauge,” measures how volatile investors expect the market to be over the next 30 days.

A high VIX generally means that investors are fearful. A low VIX generally suggests that investors are complacent.

You can see that the VIX stayed below 16 for pretty much all of last year. It also dipped below 10 several times. This is extremely rare. In fact, last year was one of the least volatile years on record. Nothing could faze investors.

It’s been a much different story this year. As you can see above, the VIX has exploded higher this year.

This tells us that investors have woken up. They care about bad news again. That means we could see even more volatility going forward.

And that’s a huge deal. According to Jeff, volatility soars just before major bull markets roll over and die. It happened during the final innings of the dot-com bubble, and again just before the 2008 financial crisis.

In short, the recent explosion in volatility could mean that the market’s about to tumble…

And given how low volatility’s been, Jeff says that “there’s a potential for a very powerful move.” And after that, “most investors will be screwed.”

Still, it’s not time to hit the panic button. Jeff thinks we’ll see one more major rally before the market tops out six to seven months from now.

In other words, we still have a chance to make a killing in U.S. stocks.

Sadly, most investors will let this opportunity sail right by them. They’ll either panic sell or hold their stocks through the coming crash. Neither is a good strategy.

If you really want to juice your returns in the months ahead, you’ll want to learn how to trade options. But the good news is that Jeff can help.

You see, Jeff says that the best time to be an option trader is when volatility is rising, like it is right now.

Jeff will be keeping a close eye on the VIX as we head into the week, and especially as he puts together his next Delta Report trade recommendation. To take advantage of this opportunity, you should consider signing up for his Delta Report advisory today.

But first, check out this video presentation. It details another of Jeff’s favorite indicators to use when searching for short-term, high-upside opportunities in the options market.

Regards,

Justin Spittler
Buenos Aires, Argentina


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What the hell happened at General Electric?

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Few corporate meltdowns have been as swift and dramatic as General Electric’s over the past 18 months – but the problems started long before that.


From Fortune:

It’s a bad day for a CEO when he announces he’s retiring and the stock goes up. That was Jeff Immelt’s day on June 12, 2017. The news of his departure was in one sense no surprise – some investors and analysts had been urging his ouster for years – but it was also a shock.

He’d been General Electric’s CEO for almost 16 years, and outsiders were unaware of any specific succession plans or that ­Immelt, at age 61, had any intention of stepping down. Suddenly they were told that in just seven weeks he’d be gone as CEO (he remained nonexecutive board chairman an additional two months), to be succeeded by John Flannery, head of GE’s health care business and a 30-year employee. Investors didn’t need long to decide this was good news. The market was flat that day, but they bid GE stock up 4%.

Their optimism was at best premature. The stock closed at $28.94 on June 12 and has not reached that price since. As economies boomed worldwide and U.S. stock indexes soared, GE has collapsed in a meltdown that has destroyed well over $100 billion of shareholder wealth. Pounded by a nonstop barrage of bad news, investors are traumatized and disoriented. “They just can’t figure it out and don’t want to invest,” says analyst Nicholas Heymann of William Blair & Co. “This isn’t like surveying the landscape. It’s spelunking with no lights and no manual.” Analyst Scott Davis of Melius Research says some investors have become permanently disillusioned: “Many have told us they will never own GE again.”

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Retirees and employees who bought heavily into the stock are furious; some picketed GE’s annual meeting in April. Former executives are dumbfounded. “It’s unfathomable,” says one. “You couldn’t possibly dream this up. It’s crazy.” After all, this is GE, a corporate aristocrat, an original Dow component, the world’s most celebrated management academy, now revealed as a financial quagmire with a deeply uncertain future. Its bonds, rated triple-A when Immelt became chief, are now rated five tiers lower at A2 and trade at prices more consistent with a Baa rating, one notch above junk.

In response to this debacle, GE has repudiated its previous leadership with a zeal unprecedented in a company of its size and stature. Gone in the past 10 months are the CEO, the CFO (who was also a vice chair), two of the three other vice chairs, the head of the largest business, various other executives—and half the board of directors. The radical board shake-up “could be one of the most seminal events in the history of U.S. corporate governance,” says a longtime vendor and close student of GE.

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Immelt (left) and Flannery announcing the succession. Flannery would soon replace much of Immelt’s top team and strategy. Courtesy of General Electric.

Immelt declined to be interviewed for this article but sent Fortune a statement in which he cited accomplishments and said, “None of us like where the stock is today. I purchased $8 million of stock in my last year as CEO because I believe in the GE team. I love the company, and I urge them to start looking forward and win in the markets.”

Flannery’s strongest message is how completely he’s breaking with GE’s recent past. “The review of the company has been, and continues to be, exhaustive,” he told investors last October. Specifically: “We are evaluating our businesses, processes, [the] corporate [function], our culture, how decisions are made, how we think about goals and accountability, how we incentivize people, how we prioritize investments in the segments …  global research, digital, and additive [manufacturing]. We have also reviewed our operating processes, our team, capital allocation, and how we communicate to investors. Everything is on the table …  Things will not stay the same at GE.”

Inescapable conclusion: This place is an unholy mess.

Continue reading at GE…


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Investors have completely given up on this commodity

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From Steve Sjuggerud, Editor, True Wealth Systems:

It’s been beaten down, left for dead, and just forgotten.

When an asset underperforms for multiple years, investors tend to give up on it. They get burned and move on… at least for a while.

Today, we are looking at a commodity in that exact situation.

It’s down 44% since peaking in 2014. Investors want nothing to do with it… But history says a triple-digit jump is possible thanks to this extreme negative sentiment.

Here are the details…

When you think about commodities, you probably think of oil and gold… maybe even crops like corn and wheat.

Today’s commodity is a bit more obscure. It’s probably off your radar. Honestly, it’s probably off everyone’s radar.

We’re talking about hogs.

You see, hog prices have fallen dramatically over the past three years. The commodity is down 44% since peaking in 2014. And not surprisingly, investors want nothing to do with it.

It only takes a quick glance at the Commitment of Traders (COT) report for hogs to see this extreme sentiment.

The COT report is a real-time indicator that shows what futures traders are doing with their money. It’s a great investment tool. It shows us contrarian bets when futures traders all agree on an outcome.

When futures traders are all making the same bet, the opposite is likely to occur. Right now, futures traders are all betting on lower hog prices. Take a look…

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Their bets have only been this extreme a few times over the past decade.

We saw similar extremes in 2009, 2012, and 2015. Each extreme lead to dramatically higher hog prices in the following months…

From August 2009 through April 2011, the commodity jumped 134%. Then another similar setup happened in mid-2012. Hog prices bottomed shortly after and then rallied 85% in less than two years.

In mid-2015, investors gave up on hog prices again… right before the commodity soared 70% in less than a year.

These are incredible returns. But it’s what can happen when investors completely give up on an asset. Today, futures traders have given up on hogs once again.

One way to take advantage of this is through the iPath Bloomberg Livestock Subindex Total Return ETN (COWTF). The fund tracks the Bloomberg Livestock Subindex Total Return Index. Its main focus is on hog and cattle futures.

We aren’t officially recommending COWTF today. The uptrend simply isn’t strong enough. But this is a fantastic long-term setup. And when the uptrend returns, hog prices could potentially see triple-digit gains.

Crux note: Steve’s trading strategies cover every corner of the market – more than 40 different sectors – so readers will always have the opportunity to make money somewhere… even in hogs.

And only Steve’s True Wealth Systems subscribers can get immediate access to the team’s weekly Review of Market Extremes.

For more details, click here.


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Cramer’s charts suggest investors buy Akamai and sell Walmart

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In an emotional market where investors struggle to process the White House newsflow, CNBC’s Jim Cramer likes to fall back on the technicals to find actionable opportunities.

“In the stock market, emotional decisions tend to be bad decisions,” the “Mad Money” host warned. “So we need to do everything we can to check our emotions at the door. And that’s why, every week, we like to play off the charts.”

For Wednesday’s charts, Cramer turned to technician Marc Chaikin, the founder and CEO of Chaikin Analytics and the inventor of key technical tools like the accumulation-distribution line, the Chaikin volume indicator, the Chaikin oscillator and the Chaikin Money Flow.

Three weeks ago, Chaikin recommended three stocks on “Mad Money” based on his formula for finding winners and losers: Marathon Petroleum, EOG Resources and General Electric.

Since then, Marathon and EOG have gained 8.2 percent and 4.6 percent, respectively, and GE was up 9 percent as of Tuesday before its CEO gave a poorly received presentation.

“Two out of three ain’t bad, and if you’d taken profits on GE yesterday, you would’ve had a phenomenal trade,” Cramer said.

Chaikin’s formula uses three key indicators: the Chaikin Money Flow, which measures buying and selling pressure in a stock; the Chaikin Relative Strength, which compares a stock’s performance with the S&P 500’s over the last six months; and the Chaikin Power Gauge, which uses 20 different fundamental and technical inputs to produce a bearish or bullish reading.

This time around, Chaikin’s formula flashed particularly bullish signals with the daily stock chart of Akamai Technologies, a cloud play that helps companies get content like streamed video online securely and glitch-free.

Shares of Akamai have been soaring since activist fund Elliott Management said it took a 6.5 percent stake in the company last December, but Chaikin’s three indicators showed more room to run.

The Chaikin Money Flow turned positive, meaning that institutional investors were buying the stock, the Chaikin Relative Strength has been strong for months, and the Chaikin Power Gauge is sending green bullish signals.

Still, the technician warned that the stock is very overbought, suggesting that investors wait for a pullback to the $72 to $74 level before picking up some shares.

“My view? I like Akamai here — we recommended it at $73 in mid-March — but I’d like it even more into weakness because I believe in Elliott Management’s ability to take this business to the next level,” Cramer said.

Chaikin’s formula can also signal when a stock should be sold. On Wednesday, Chaikin zoomed in on the stock of Walmart, down over 4 percent since the company’s earnings report.

Having spent months in the red, the Chaikin Money Flow inched up after the report, but is still flat, Cramer said. The Chaikin Relative Strength indicator is also negative, reinforcing the stock’s decline. Unsurprisingly, the Chaikin Power Gauge is flashing bearish signs, too, he added.

“My view? I like Walmart long term, but Chaikin may be right about the short term,” Cramer said. “Wall Street really dislikes the fact that the company’s spending so much money to grow its business, including that acquisition of Flipkart, the Indian e-commerce play. I think these bets are ultimately going to pay off, but it could take time.”

“Bottom line? The charts, as interpreted by Mark Chaikin, suggest that you should buy Akamai here and sell Walmart,” the “Mad Money” host concluded. “Given his track record, I think you need to take his advice very seriously, especially on the stock of Akamai.”



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