by
Brian Pretti
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Economy
Economy
by
Brian Pretti
Executive Summary
- New bear market + re-enter recession = 30-40% drop in stock prices
- What are the chart of the best technical indicators telling us?
- Confusion reigns during the transition from bull market to bear
- Why volatility will reign & capital protection should be prioritized
If you have not yet read Part 1: Has The Market Trend Shifted From Bull To Bear? available free to all readers, please click here to read it first.
It’s The Global Economy, Stupid!
I believe another key question for equity investors right now is whether the recent noticeable slowing in global economic trajectory ultimately results in recession. Why is this important? According to the playbook of historical experience, stock market corrections that occur in non-recessionary environments tend to be shorter and less violent than corrections that take place within the context of actual economic recession. Corrections in non-recessionary environments have been on average contained to the 10-20% range. Corrective stock price periods associated with recession have been worse, many associated with 30-40% price declines known as “bear market” environments.
We can see exactly this in the following graph. We are looking at the Dow Jones Global Index. This is a composite of the top 350 companies on planet Earth. If the fortunes of these companies do not represent and reflect the rhythm of the global economy, I do not know what does. The blue bars marked in the chart are the periods covering last two US recessions. US recessions that were accompanied by downturns in major developed economies globally. As I’ve stated many a time, economies globally are….
Why The Next Drop Will Likely Be 30-40%
PREVIEW by Brian PrettiExecutive Summary
- New bear market + re-enter recession = 30-40% drop in stock prices
- What are the chart of the best technical indicators telling us?
- Confusion reigns during the transition from bull market to bear
- Why volatility will reign & capital protection should be prioritized
If you have not yet read Part 1: Has The Market Trend Shifted From Bull To Bear? available free to all readers, please click here to read it first.
It’s The Global Economy, Stupid!
I believe another key question for equity investors right now is whether the recent noticeable slowing in global economic trajectory ultimately results in recession. Why is this important? According to the playbook of historical experience, stock market corrections that occur in non-recessionary environments tend to be shorter and less violent than corrections that take place within the context of actual economic recession. Corrections in non-recessionary environments have been on average contained to the 10-20% range. Corrective stock price periods associated with recession have been worse, many associated with 30-40% price declines known as “bear market” environments.
We can see exactly this in the following graph. We are looking at the Dow Jones Global Index. This is a composite of the top 350 companies on planet Earth. If the fortunes of these companies do not represent and reflect the rhythm of the global economy, I do not know what does. The blue bars marked in the chart are the periods covering last two US recessions. US recessions that were accompanied by downturns in major developed economies globally. As I’ve stated many a time, economies globally are….
by
davefairtex
by
davefairtex
Executive Summary
- What the Great Gold Smash of 2013 tells us
- Was $1,075/oz gold the bottom? Is the bottom indeed in?
- Is a new bull trend ahead for precious metals?
- How to hedge against — and speculate on, for those who dare — future manipulation attempts
If you have not yet read Part 1: EXCLUSIVE: The Smoking Gun Proving Silver & Gold Manipulation available free to all readers, please click here to read it first.
Now let's look at the great gold smash of 2013.
There were three separate operations I saw on or around the gold smash of 2013:
Operation #1: On April 12, gold had already broken below the 1525 support level to close at 1501 after dropping $100 over the two preceding months. After a long decline followed by a support break, the market was in a very fragile state. Sunday rolled around, and “someone” chose this moment to unload $95 in 13 volatility events over the course of just 13 hours. This avalanche decisively drove gold down $150 in just one day. This engineered follow-through using volatility events coming immediately after the support break resulted in the total annihilation of the longs. Price still has not recovered from that move.
Operation #2: two days after the $150 drop, another 3-event $23 assault completely failed. Price did not move at all. In fact, it rallied on the day. Why? Why didn't we get another $150 drop? Well, 1325 turned out to be strong support. Buyers came out in droves to pick up the lower-priced gold. And so when gold dropped $23 due to the volatility events, COMEX buyers snapped up the lower priced gold, and as a result the assault completely failed.
Operation #3: two months later, another 1-event $24 assault had only a very minor effect. Price fell that day a few bucks, which was regained the day following. Support was not quite as strong, but the market was clearly not in a fragile state at that point either. This assault failed as well, since there was no support break and no price reset lower.
Here are three events, in relatively close proximity to one another, but under three different sets of “chart circumstances” which provided three different outcomes. One worked, two others didn't. The difference, I maintain, was where the market was at each point. Fragile markets appear vulnerable to volatility events. Strong markets are not.
Now let's look at the most recent event: July 20, 2015…
How To Protect Yourself & Profit From This Manipulation
PREVIEW by davefairtexExecutive Summary
- What the Great Gold Smash of 2013 tells us
- Was $1,075/oz gold the bottom? Is the bottom indeed in?
- Is a new bull trend ahead for precious metals?
- How to hedge against — and speculate on, for those who dare — future manipulation attempts
If you have not yet read Part 1: EXCLUSIVE: The Smoking Gun Proving Silver & Gold Manipulation available free to all readers, please click here to read it first.
Now let's look at the great gold smash of 2013.
There were three separate operations I saw on or around the gold smash of 2013:
Operation #1: On April 12, gold had already broken below the 1525 support level to close at 1501 after dropping $100 over the two preceding months. After a long decline followed by a support break, the market was in a very fragile state. Sunday rolled around, and “someone” chose this moment to unload $95 in 13 volatility events over the course of just 13 hours. This avalanche decisively drove gold down $150 in just one day. This engineered follow-through using volatility events coming immediately after the support break resulted in the total annihilation of the longs. Price still has not recovered from that move.
Operation #2: two days after the $150 drop, another 3-event $23 assault completely failed. Price did not move at all. In fact, it rallied on the day. Why? Why didn't we get another $150 drop? Well, 1325 turned out to be strong support. Buyers came out in droves to pick up the lower-priced gold. And so when gold dropped $23 due to the volatility events, COMEX buyers snapped up the lower priced gold, and as a result the assault completely failed.
Operation #3: two months later, another 1-event $24 assault had only a very minor effect. Price fell that day a few bucks, which was regained the day following. Support was not quite as strong, but the market was clearly not in a fragile state at that point either. This assault failed as well, since there was no support break and no price reset lower.
Here are three events, in relatively close proximity to one another, but under three different sets of “chart circumstances” which provided three different outcomes. One worked, two others didn't. The difference, I maintain, was where the market was at each point. Fragile markets appear vulnerable to volatility events. Strong markets are not.
Now let's look at the most recent event: July 20, 2015…
by
JW
by
Adam Taggart
by
charleshughsmith
Executive Summary
- The Fed Won't Be Able To Soak Up Bad Mortgages Like It Once Did
- Chinese Capital Will Dry Up After Capital Controls Are Imposed
- The weakening petro-dollar will weaken demand for high-end housing
- The inevitable symmetry of bubbles will force a price mean-reversion
If you have not yet read Part 1: How Much Longer Can Our Unaffordable Housing Prices Last? available free to all readers, please click here to read it first.
In Part 1, we looked at factors that limit further home price appreciation—mortgage rates that can’t go much lower and stagnant household incomes—and factors that could continue to push prices higher in islands of strong job growth and global demand.
Here in Part II, we’ll look at several dynamics that could deflate the current Housing Bubble #2, even in areas currently experiencing high demand for housing such as New York City and San Francisco.
The Fed Will Encounter Political Headwinds in Pushing Money to the Wealthy
Setting aside cash buyers from overseas, a major factor in the inflation of Housing Bubble #2 was the Federal Reserve’s quantitative easing programs that expanded the pool of money available to the already-wealthy while prompting very little “trickling down” of this new money to the bottom 90% of households.
The one Fed policy that aided the bottom 90% was buying $1.75 trillion of home mortgages. This unprecedented buying spree helped push mortgage rates down to equally unprecedented lows.
But as this chart shows, the Fed is…
How A Major Housing Correction Can Happen Over The Next 1.5 Years
PREVIEW by charleshughsmithExecutive Summary
- The Fed Won't Be Able To Soak Up Bad Mortgages Like It Once Did
- Chinese Capital Will Dry Up After Capital Controls Are Imposed
- The weakening petro-dollar will weaken demand for high-end housing
- The inevitable symmetry of bubbles will force a price mean-reversion
If you have not yet read Part 1: How Much Longer Can Our Unaffordable Housing Prices Last? available free to all readers, please click here to read it first.
In Part 1, we looked at factors that limit further home price appreciation—mortgage rates that can’t go much lower and stagnant household incomes—and factors that could continue to push prices higher in islands of strong job growth and global demand.
Here in Part II, we’ll look at several dynamics that could deflate the current Housing Bubble #2, even in areas currently experiencing high demand for housing such as New York City and San Francisco.
The Fed Will Encounter Political Headwinds in Pushing Money to the Wealthy
Setting aside cash buyers from overseas, a major factor in the inflation of Housing Bubble #2 was the Federal Reserve’s quantitative easing programs that expanded the pool of money available to the already-wealthy while prompting very little “trickling down” of this new money to the bottom 90% of households.
The one Fed policy that aided the bottom 90% was buying $1.75 trillion of home mortgages. This unprecedented buying spree helped push mortgage rates down to equally unprecedented lows.
But as this chart shows, the Fed is…
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