If you remember one thing, Global Federal Bank Distortion to the economy has created a Parabolic Contango Markets for Asset prices. This is nothing new. It has happened in the past for short periods of time, but since 2008 it has been a global experiment of biblical proportions to do it for 7 years and counting. Interest rates of all national currencies need to be viewed cautiously. "There are no markets anymore, just interventions" so rather than being a reflection of true market conditions, interest rates today result from heavy-handed central bank manipulations, thwarting real and accurate price discovery by the market. Central banks can only push so far before market forces prevail, a limitation often described as "pusing on a string". Thus, according to deterministic factors or natural long time economic dogma, the body of people we call the "market" stands as a guardian that carefully watches central bank tinkering and responds to it by moving their money around to better suit their risk preferences. Market forces overpowering central bank manipulation can explain what is now happening. The Central Bank does not want people to hold gold, oil, silver etc, they want them to hold dollars and keep interest rates low. The manipulation has run its course, markets are now forcing central banks hand, in China, as soon as the seller post bail and get out of jail, the asset sellers will be forcing down prices which will eventually increase interest rates and push more holding of bonds in the future with much higher yields and lower prices. We have not seen a Contango market since 2008 - 2009, but it is coming back like it did back then to correct the distortion of the real estate and mortgage markets. This is just history repeating itself or some say, rhyming with the past. What does it all mean man! It means this, what goes around come around, this is natural phenomena of free markets, Central Banks can not stop free market forces.
Did you look at the order imbalance. It may happen near the end of the day. Schwab just put out a daily or weekly market perspective in which they say a FED rate hike is all but assured for September. What people don't realize is the warning by the FED on their website, their dual mandate they state has nothing to do with the stock market volatility. The have stated their goal to start raising rates in the second half of the year, they stated this at least a dozen times. The state in the pronouncements that it will be based on the same indicators they have always used, employment, employment trends, inflation, and adjustments for temporary of one time events (both ways). In China, a stock crash of 50% only affects 3-4% of the people, stock ownership is very low there. Hence, liquidity concerns are only the problems of momentum traders who were using the 1% margin money to drive stock prices higher. Overvaluation when adjusted for permanent earnings gains or growth that are long lasting are figured, THE MARKET CAN FALL 50% FROM CURRENT PRICES AND IT WOULD HAVE VERY LITTLE EFFECT ON THE ECONOMY. Back in 2008-2009 when the market fell, the losses from bad mortgages were driving down lending volumes and thus hurting the economy. Then there was money being pulled out of banks that had to be stopped. This time, the banks are well capitalized and actually this is the only industry that did not expand and increase capacity with the zero percent bubble money, they actually shrunk 50% during the past 7 years, trimmed cost and wages have been stagnant for 7 years in this industry. Out of all the asset entities out there, this is the only industry that is VERY STRONG from an investment standpoint. Most small banks have even totally gotten out of fixed rate mortgages over the past 7 years and have 80-88% of their mortgage portfolios in adjustable rates. They have been selling almost 100% of the fixed rate stuff, reporting capital gains and fee income.
Right now you can use AGNC as a trading vehicle or for some interest. If you just buy and hold for a year, you may get 13% in return of capital dividends and 13% drop in stock price, netting you 0% or close to it like a passbook account, except the passbook account you don't have to pay taxes on the 13% return of capital some of it is taxable.
Many market watchers see global prices falling further, imperiling everything that has value. Materials, oil, equities, used car prices, etc, you name it, the global easing and easy money by the reserve banks around the country has piled more debt on to more debt, creating too much capacity in almost everything, too much supply and no motivation to reduce the supply through liquidation or bankruptcy. You can't increase demand with stagnant job growth and 60-65% of the population turning 65 +. This creates a dark shadow on growth and all this stimulus is just creating more rain clouds for a very long overdue thunderburst or downpour. The FED banks around the globe have set up a perfect storm, almost similar to the decade of growth in the Roaring 1920's,, ignor this comparison saying its old and will never happen again, but the amount of distortion to create a continuing paradise of prosperity will end like all distortions to free markets in the last 2,000 years. A demand falls from aging demographics for gasoline, refinery output makes new monthly highs. As free markets take hold, progressive day to day selling take holds, only stopped by government intervention or manipulation, like the last two day rally in the DOW of 1,000 points. This was accomplished with the help of the Chinese government who issued arrest warrants for those who sold stocks on Tuesday, banned short selling, and then on Thursday actually bought billions of dollars of Chinese Stock to show a few hundred point rally. This is government and Central Bank distortion like we have never seen. This will cause supplies of stocks, materials, anything of value to be put up for sale in already elevated levels of sell orders and causes a parabolic contango scenario sending asset prices much lower. There are so many negatives and absolutely zero positives that I would SELL INTO ANY STRENGTH, like today. The dollar will rise, asset prices will fall, economies will slow.
I forgot to add, today rise is in line with the pattern. After a 6 day sharp correction, the indexes have a sharp rally that recovers 50% or more. Well the markets topped in May and July at 18,300 there abouts and plummeted to 15,600, for a 2,700 decline. The bottomed Tuesday at the close and now rallied for two days, 630 + 360 = 1,000, a little light of the 50% correction, but, 10% variance is allowable, nothing follows exactly, markets rhyme, they don't repeat. 2-day rally or 3 day rally or even 5 days treading some water, either way, the thing to watch is the market internals and any heavy swing days, where risk averse takes hold and distribution starts up with a vengeance. Market internals are very negative based on the volume, and the whipsawing this afternoon, similar to Monday.
DOW 2008 August Opens 11,326 Close 11,543
DOW 2008 SEPT Opens 11,831 Close 10,850
DOW 2008 OCT Opens 10,850 Low 8,175 Close 9,336
DOW 2008 NOV Opens 9,336 Close 8,829
DOW 2008 DEC Opens 8,829 Close 8,776
August to December DOW 11,326 - 8,776 = 2,550
Right now we were off May/July top of 18,300 approx. and rallied 1,000 points. So we dropped 2,700 and recovered 1,000, this almost looks like October 2008, which we had in August.
10,850 -8,175 = 2,675 drop then it recovered 9,336-8,175 = +1,161
See the rhythm. 2,675 drop in Oct 2008, then 1,161 rally over several days then all of Nov., Dec is just slowly dropped. This is the classic whipsaw of a major trend change. Is the trend down or will it continue up with deteriorating fundamentals and earnings and the drawdown in China. That is the big question...my bet is DOWN GLOBALLY.
Good for you. I actually see 35% in total for the DOW or S&P. I am not just pulling this stuff out of thin air. I am using very old algorithms based on historical data from last 50 years. I believe the summer-fall of 2008 will repeat this summer-fall, almost to a T. August 29 is an inflection point, I know nothing repeats exactly, but the market action since July is eerily similar. It is all based on valuation, Dow Theory and lost test historical norms and dogma of topping patterns in an old old bull market. This will be a very ROBUST correction, which is very likely because we really haven't had a robust correction since the fall of 2008. I believe August 29 of 2008 was Friday. So August 28, 2015 in the INFLECTION DATE. Could this be another rare BLACK FRIDAY in August? You don't even think it is possible, or you just refuse to believe and just want to stay in an illusion in the economy of OZZ. You probably don't even believe there is a person behind the curtain, named Yellen pulling the levers of this HUGE ILLUSION.
This is just a chart resemblance. The morning doesn't match, but the afternoon appears to resemble the Monday Chart. Talk about something eerie.
Testing 1-2-3-4.....is anyone there........please respond......testing.......click click clack.......hither....tither.....tather.........testing 1 2 3 4 hello is anyone there.........pick up the message board..........Klumps is ringing.........helloooooooooooo
How could you not make money. I said buy TBT at 39-40's and swing trade. Monday sell off is the flight to safety into T-bills, TBT will plummet, YOU BUY WHEN EVERYONE IS PANICKY in TBT. 40.31 was the low, It was easy to get 40.50 -40.75 even 40.90. It hit 45 plus today, good selling point for the trade or you could intra-day trade of a buck or two. The longer you hold the more risk, but if you do it right and are lucky, the more profit. I would sell AGNC at the high today and wait to buy back a 1-1.5 points lower, just trade the common. I picked up a bundle of preferred AGNCB at 24 yesterday for my retirement accounts and my regular accounts. Good Luck. Remember, DO NOT BUY AND HOLD, we are in bear market, SLOPE OF HOPE. Lots of bear traps like today. Take cover and sell today before it is too late. SELL INTO RALLIES. BUY INTO PANICS (with professional guidance only), do not practice any of my advice unless you understand the stochastics and determinants of modern stock market valuation theory.
You have to develop an artistic strategy, practice it and use fundamentals and technical but you have to practice being patient. Rich folk who gather 100 millions, 500 mil., 1 billion, are very patient people. Many sold their energy stocks two years ago in August 2013 and sat in money market account at .5 - 1.0%, waiting for values to appear. There was a very significant drought for two years, but now some values are showing up but are only trade-able because they are headed even lower.
I am just trying to help the people on this board. I am not really a yield chaser or high dividend guy. I manage trust funds for private folk. I pick this message board based on my superior knowledge of equity valuation, market cycles and the enormous bubble in YIELD SEEKERS by average folk, many of this group are senior citizens. The group that have paid a huge price for yield with very negative determinants is MORTGAGE REIT investors, there is only one other group near you guys, that is the MLP (Energy Master Limited Partnerships). Professionals have a hard time making money in these. Yet both of these boomed or bubbled over the past 7 years of Zero Percent Interest rates which caused bubbles in the Energy and Materials Industry and Bubbles in MBS pricing of 30 year fixed interest mortgages. All of this bubble was the result of misdirected policy by the FED. Now the FED has to correct this or this country will have job stagnation for several generations.
The above two groups of yield seekers if they buy and hold those investment will be crushed, please don't be one of them. If you need yield or something take into account basic investment analysis when you research an equity. If you like this industry, the only safe investment is the preferred stocks of NLY and AGNC which yield 8%, otherwise these m-reits and MLP's are not investments, they are mouse traps of capital loss.
Indexes were down 10%, if we stabilize today we have 25% more to go by end of October, and we will perfectly match the 35% decline in S&P from 1300 to 840 in same time period, August - October 2008, and don't forget it doesn't stop at 35%, there was a year end VERY POWERFUL RALLY that declared the end of the Bear Market, but we all know the indexes fell an additional 30% by March of 2009. I am not predicting the 65% decline in this time frame, but being an election year and there is widespread dislike of the current administration and it appears to becoming more and more probable
I notice you title, do you have any military experience. I will pass your name on to the Donald for consideration for Chief of Staff or maybe a high spot in the Pentagon. What branch were you in?
Part 2: History is the Best Guide, S&P from 1,300 to 840, August 29 to October 2008.
August 29, 2008 Crude Drops 10% in one day, S&P drops from 1300 to 1210
Selling continues lightly with market internals very negative like now.
Around 9/18/2008 a VIOLENT RELEX RALLY up 4% in 1 day , last 5 days, highest closing uptick in 5 years when FED anounces ban on short sale of bank stocks was the headlines ensues with happy talk from FED may bail out Fannie and Freddie of all losses, S&P moves 1210 to 1270.
9/24/2008 S&P hits midday high but still 40 pts below 9/18 high, around 1230.
10/1/2008, S&P plummets to 1120 over several progressive down days.
10/3/2008, S&P rallys to 1160, Gov happy talk and bill passes to bailout someone, BIG GAP UP IN MORNING, bobble head financial reporters declaring end of bear market, heavy selling in after noon erases more than half the gain, still the reporters touted it as sign the bully market is intact on evening news.
A few days pass.......
10/7/2008......Market Opens at 1110 and gaps down VERTICAL DESCENT TO 1,000, recovers late only down 400, financial press report HEAVY BUYING CAME IN, not really they cut the phone lines to the stem the little guys from selling, while the high rollers had all the air time to get trades off. 10-7 to 10-9, S&P down 110 points to 1,000.
10/9/2008......Short Cover in strong gap up rally in morning, then just hangs there, zero enthusiasm, the momentum traders all just staring at eachother to see who blinks first, then selling ensues, massive shortly before the close.
10/09/2008 to 10/10/2008 Massive SELLING, S&P goes from 1020 to 840, gut wrenching, Global Thermopukular Descent, VERTICAL DROP.
This is the drop that I vision for August to October, 2015, Take the template for the S&P 500 index for 2008 and put it over the chart for 2015, for those who say history does not repeat, I believe you will see shortly that history does indeed rhyme.
TRUMP AND KLUMP IN 2016.
Keep the Faith, Bobbles.
I haven't deserted anyone, I was at the broker manually entering trades due to electronic order entry problem's. WE ARE IN A BEAR MARKET......period. I said the "Slope of Hope" will have 4-5 progressive down days followed by 2-5 up days with recovery of half or more of the vertical descent. This is a FED or Gov. induced happy talk that generates weak short sellers to cover and the other half of this buying is short term momentum traders trading the deterministic algorithm that is 100% valid based on historical evidence, the air pockets and gap downs or gap ups either way has back and forth movement. The evidence to watch for is the variance during the day and how fast the sentiment changes, both of these parameters are determinant, based on historical dogma and widely accepted by bull and bearish market technicians. I was entering numerous order yesterday to play the swing. I got TBT at 40.50 to 45 swing trade, AT&T 31 - 34, so many too numerous. Sorry I wasn't here, I didn't know you missed me for one afternoon.
History is probably the best guide to estimate the next few months, because the fact is we topped out in a Bull Market in May 2015, market internals broke down dramatically signaling a trend change, a MASSIVE ONE,
NYSE New Highs & Lows both greater than 2.5%
NYSE new highs less than 2X new lows
McClellan Oscillator Breadth negative and went extremely neg. in July
At least 2 signals in MC Osc. in 36 days.
% of stocks above own 200 day MA less than 60%
Market internals are very terrible in the indexes even on this two day rally, volume is much less than Monday and Tuesday, and don't forget the enormous volume of etf funds whose orders to sell never got filled, read about that in the Wall Street Journal on Tuesday and Wednesday. Still investigating but the morning plunge on Monday should have been more that 1,000, the rapid reversal and the gap up in the half hour where all 1,000 was erased was not buying, IT WAS PURE MANIPULATION.
I am detecting order imbalances again. I would sell AGNC at 19.40 and if you want to buy it back at $18.25 at the close, that's OK. Make a dollar and change daily, it adds up to 250 day/yr x $1 = $256 return on a $19 stock, not bad.
Otherwise SELL INTO ANY STRENGTH.....market internals have broken down there is no support, the rally this morning is traders and very weak buyers, this will be sold into by the professionals. I would try to unload stocks into any rallies and raise cash for some better buying opportunities. Before this descending triangle, the slope of hope is done, markets will be down 25-65%, if this is a full blown panic, I mean the financials here have been insane for this whole country, everything is debted out to the max, real value has been hidden with suspension of "Mark to Market" accounting.
During Bull Markets, people will come up with all types of stochastics and formula touting how this is going to go a lot higher this time or that time, because we are in a BULL MARKET, "bull" sells a higher valuation. And during bull markets there are a whole lot of paradigm by really smart analysts and brokers and hedge funds, because they all reinforce the story to get the prices higher, there are lots of buyers looking for upside action. In Bear Markets, those bullish buyers start to dry up along with all the reasons, stochastics and formula's touting the next great growth stock, some will emphasize earnings, some just sales like Amazon, who needs sticken earnings in a bull market.
BUT in a bear market those people get washed out in the downward slope of hope, their new paradigms go with them and Stock Price Valuation becomes deterministic, using natural long time historical formula and paradigms that are 100's of years old and still in force. REMEMBER THIS: DURING BEAR MARKETS THE BOTTOM IS DETERMINED BY THE PRICE A PROFESSIONAL VALUE BILLIONAIRE WILL PAY FOR A STOCK WHEN THERE IS A HUGE ORDER IMBALANCE ON THE SELL SIDE AND NO BUYERS ANYWHERE. The algorithms used to determine that LOW BUY PRICE by these value Billionaires is based on very old and easy to understand ratio's. Price to book value, average low PE's based on 5-10 years of normalized earnings. They estimate earnings based on equal number of bad years and good years, they use average low PE's for at least 5 years and then they start buying everything for sale and a bottom of the BEAR MARKET is made, like March 2009. In Bear Markets there are only a couple paradigms, AVERAGE LOW PE, Price to Tangible Book. What is AAPL tangible book value and average low PE value, pick the lowest, that is the bottom.
In a bear market. Does anyone have the stats at their finger tips. I need the low PE ratio for Apple for 2009.
Apples low target price in 2015-2016 bear market is its average low PE times estimated earnings for 2016, forward earnings. I believe a 50-60% correction from current prices is very possible. This is a deterministic algorithm, all the stochastics on why Apple was worth this or that during a bull market don't apply anymore, it is the lowest value price that BILLIONAIRE value investors will buy a stock in a free falling market. THIS IS A STRONG SELL, along with Amazon and any other high PE or high growth stock, it is all about valuations.
This is a test of the AGNC emergency message board. THIS IS ONLY A TEST. Do not panic. When I post, I believe all the other posters should stay of the airwaves (i.e. the message board) until I get my posts out. During times like this we need the facts and the truth. We need TRUMP or KLUMP or anything that rhymes with these names. This is the end of the emergency "Clear the Airwaves Test".......
TRUMP AND KLUMP in 2018 '
My algorithm, based on deterministic components indicates a further 25% correction from todays close before market equilibria sets in. This will show on the oscillator charts or the log graphs as vertical line down. This is totally natural and 100% expected mathematically, if you know anything about the stochastics and determinants of modern stock market pricing theory.
The DOW THEORY along with the McClellan Oscillators and the Hiddenberg Omen indicators all flashing "STOCK CRASH", just like the 1987 crash week. There are so many buy the dip bobble heads here with 7 years of profits that I think it will take 3 weeks to clear these guys out of their ill gotten profits.
If you are risk averse, why didn't you SELL at Noon, have some faith, I am accurate by the hour here. I hope those who bought TBT at 40 are still holding, TBT is a golden goose.
You know what was funny today, Pisani bragged that all the DOW stocks were Green or UP in the first hour of trading this morning. The headlines at the market close "DOW reverses and ends down in the Biggest Reversal Day since 2007". What is really funny is all the DOW stocks were red. In fact, there was widespread selling in every industry, including health care and utilities, which are suppose to be immune to downturns. POM down 16.44%, EXC down 6.86%, both are utilities and are suppose to be safe. STRONG SELL on EVERYTHING. Short at will. The only two stocks I am long today, was TBT that I bought yesterday at 40 and change and my beloved small bank Hawthorne HWBK, both of these were green today at the close not at the opening.
You will tell your grandchildren how Dr. Klumps outsmarted Goldman Sachs and made predictions by the hour on a 1,000 point swing day in the DOW. Three days in a row, I will be remembered in the HISTORICAL ARCHIVES of Yahoo as the Greatest Stock Market Forecaster of all time.