US Stocks finished 2015 where they began. There is currently a cycle that is pointing the markets towards a new decline The “Topping Process” has been in play in the equity markets since November 25, 2014. I am looking forward to this year, in which many financial and commodity markets are poised to complete long term cycles. I will be presenting multiple “sweet” trade setups in this New Year of 2016. We are currently in the late stage of a topping pattner or in the very early stage of a new bear market. This will be a prolonged slow bear market drop and according to other market technitions could last up to 4 years before the global bear market ends
I was not expecting any sustained bullish action in 2015, as my model took us out of ALL long equity positions (including SPX), November 25, 2014, and I again gave a second warning in August 2015 after the first real market crash took place which indicated a major shift in the market ws taking place. We are strategically in Cash and have a couple net short positions using inverse ETFs on China and another for Japan. Both of these are now profitable positions and this is just the start of something big.
A quick summary of my major forecasts and turning points below you may find helpful:
- In 2009 I shared my big picture analysis, investment forecast and strategy in a book called “NEW WORLD ORDER ECONMICS – What you can do to protect yourself. In January 2009 I forecasted that the Dow Jones Industrial Average was going to make a bottom within a couple months which it did. I also predicted the price of gold to start another major rally, and for crude oil to bottom and rally for years, which were also correct.
- In March 2015 I publicly shared my major forecast about the US stock market topping out late 2015 and early 2016 which has been spot on and you can read it here: The Next Financial Crisis
- In the second half of 2015 I co-authored in a book talking about the global markets and how they everything is pointing to a major market crash: The Global Crash and What You Can Do To rotect Yourself
For those of you that position your long term investment capital based around my long term investing analysis, you should be very proud of yourselves as you did not commit any new money to the market and/or avoided 2015 all together, which was a terrible year of trading and especially hedge funds and mutual funds.
When the SPX gave warning of an early cycle top the price of was at 2067. At the close, on December 31, 2015, the SPX price was at 2043, were right back below that level and this time its on very weak (bearish price and volume) from 13 to 14 months ago.
If the SPX breaks the low of 1867 which occurred on August 25, 2015. This bull market will be have confirmed from a technical standpoint that a new bear market has emerged and new opportunities will start popping up throughout 2016.
Currently, 2016, when the 8-year Presidential Cycle occurs, it has been historically BEARISH! The BIG money has been on vacation for two weeks now, when they return, I expect them to start selling their HUGE equity positions, which looks as if it has already started today with international markets down 3-4% already today and the US indexes are set to gap down 1-2%. The “seasonality” factor looks to have evaporated and it will be business as usual. Statically speaking, based on repeating “CYCLES”, the SPX will decline by 60% to 70% over 2016, 2017 and 2018.
The Chinese financial markets plunged last night spurring a trading halt for the rest of the session. The Shanghai Composite tumbled 6.85 percent to 3296.66 and the Shenzhen Composite plunged 8.1 percent. The CSI 300 briefly plummeted 7.02%.
These lows came after a very disappointing manufacturing report which confirmed my previous concerns over the mainland’s economic “contraction” slowdown. The Caixin December manufacturing PMI was down at 48.2, compared with 48.6 in November 2015.
The Caixin PMI is a closely-watched gauge of its nationwide manufacturing activity focusing on smaller and medium-sized companies.
This has flowed over to the European Markets in overnight trading, which are currently down 3-4%.
The Fed has been looking at the illusion of recovery, not the real thing. If it were real, we would not have 100 million adult Americans without jobs. We currently have 46 million citizens on foods stamps compared to 18 million back in 2000. Thirty-five percent of the population is receiving some form of public assistance. For so many years, Global Central Banks have been manipulating the financial marketplace with their monetary voodoo. They have convinced investors around the world to invest trillions of dollars into equities, artificially inflating equity asset classes. Creating money out of thin air and pumping it into the financial system devalues money and creates a supposed sense of a true economic recovery which thus far has not been created.
A shock to the financial system and contracting economic growth from abroad will force the FED to delay further short rate increases and even reverse their course. These academic pinheads are so blinded by their tinker toy “Keynesians Macro-Model” that they can’t even see the flashing red lights warnings just ahead of us. Keynesian fiscal policies, which postulated that by spending more taxpayer monies, funded by taking on huge amounts of new debts, they could “stimulate” an economic rebound. It FAILED!
The FED will go down in shame as deliberately creating another massive financial bubble. This time, unlike the start of the last tightening cycle in 2004, the corporate bond market is already severely stressed and it may take just a tiny pin-prick to burst it open.
The FED may also apply some new and surprising accommodative measures to try to stimulate the economy further. This could include a new round of quantitative easing measures (or something else that stimulates the economy and/or deals with the next sudden bouts of this financial crises that we all experience starting this year of 2016.
From a technical standpoint, the equity markets are more overvalued today than they were prior to the 2008 financial crisis. The only two other flash points that exhibited the same pattern in U.S. Market history is that which is comparable to the run up in the stock market crash of 1929, and the peak of the hysteria just before the dot.com bubble burst. The Federal Reserve has played a key role in creating this bubble. What is currently taking place is standing right before our eyes now in 2016. This is so obvious that everyone should see it. The downtrend looks to be underway.
For so many years, Global Central Banks have been manipulating the financial marketplace and mispriced “risk” with their monetary voodoo. They have convinced investors around the world to invest trillions of dollars into equities, artificially inflating asset classes. Why would any rational investor want to put money into it? From a technical standpoint, the equity markets are more overvalued today than they were prior to the 2008 financial crisis. The only two other RED flash points that exhibited the same pattern in U.S. Market’s history is that which is comparable to the run up in the stock market crash of 1929, and the peak of the hysteria just before the dot.com bubble burst.
The Federal Reserve has played a key role in creating this bubble. What is currently taking place is standing right before our eyes now in 2016 This is so obvious that everyone should see it. The downtrend is underway.
Central banks told everyone that interest rates would be forced down and that is precisely what happened, but now things have shifted. Investors are starting to behave more rationally and the central banks are starting to lose control of the financial markets. This is a bad sign for the rest of 2016. Rising interest rates will lead to increased default rates, as holders of adjustable rate debt find themselves faced with higher payments.
The financial markets have become completely divorced from economic reality. The GDP Q1 2015 was actually (-2.00%) and corporate profits are also starting to fall. The U.S. GDP has contracted during the first quarter and there are other economic trouble signs on the horizon. I am perfectly situated to monitor all financial markets.
Those dotted lines are where they forecast interest rates to go. The solid lines where they actually went, showing that nearly everyone involved (Bill Gross and Warren Buffet included) has consistently guessed on the high side when forecasting where interest rates are going.
If you want to make 2016 – 2018 a positive life changing event for your financial future I recommend joining fellow like minded traders and investors to be properly positioned and profit from the pending bear market in the financial market place.
GET MY ETF TRADES AND INVESTMENT POSITIONS AT: www.TheGoldAndOilGuy.com
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