NYSE bear market short entry before DEEP correction
Hi all,
Where we are right now:
1, Historically over-valued equity markets (average PE in excess of 30 in the SPX) / low dividend returns on equity (dividend yields approaching the return rate on Treasuries),
2. Volatility high and increasing (i.e. investors 2-4%pa dividend payouts can be wiped out in a day or two of bearish sentiment),
3. The market hasn't made a higher high in 17 months,
4. Global growth outlooks are being downgraded (New Zealand, Australia, China, and the USA and more just within the last few weeks and the IMF downgraded global growth outlooks for 2019 on the 9th of April),
5. Interest rates are set to drop again (it is becoming apparent Quantitative Easing monetary policy is a box that cannot be closed again),
6. There seems to be capital flight to safety - especially into USD treasuries and into the JPY,
7. Gold up 5% since the 22nd of May,
8. There are deeply concerning political signals being sent to the U.S. economy (and the world) by politicians who appear to be working AGAINST the best interests of the nation (despite what are probably good intentions).
9. Plus, if Douchebank goes under it may necessitate liquidation of 47 trillion in derivative contracts www.wsj.com/articles...-problem-1475689629.
My original bearish position on the S&P500 was simply based on points 1 and 2. Despite everything else, these two points are sufficient to explain why this drop will be a big one. If all the gains (capital and dividend) from the past 2 years can be wiped out in a few days or a week, then the investors are clearly taking more risk vs the reward they are receiving (if they are in profit). Tiny dividends are okay as long as the share price continues upwards, but sideways or down just won't do the trick anymore. Most of the buying of the past 18 months seems to have been from buy-backs and leveraged traders. Most of the buying of the past 10 years can be traced directly to Quantitative Easing monetary policy - cheap cash looking for a place to go. There is a chance that the experimental remedy for the 2009 crisis removed the symptoms temporarily while the underlying illness progressed.
I don't want to mention Elliot Wave, as so many people write it off, but EW points to the maturing of a very long-term cycle - I see the bull-run post 2009 as being the final impulse wave up before a correction. Lets ignore EW, but the past 10 years has seen the weakest economic expansion in history parallel with a very strong bull-run in the NYSE / SPX / DOW, is it more reflective of central bank monetary policy instead of real growth? www.bigtrends.com/st...id-rosenberg-warns/.
Oh well, that's enough. Good luck everyone. You might read the above as in a completely different way - and remain bullish. I just can't see how right now. All I see from todays bullishness is a place to note the end of wave (1) down. Next should be a lower high.
Where we are right now:
1, Historically over-valued equity markets (average PE in excess of 30 in the SPX) / low dividend returns on equity (dividend yields approaching the return rate on Treasuries),
2. Volatility high and increasing (i.e. investors 2-4%pa dividend payouts can be wiped out in a day or two of bearish sentiment),
3. The market hasn't made a higher high in 17 months,
4. Global growth outlooks are being downgraded (New Zealand, Australia, China, and the USA and more just within the last few weeks and the IMF downgraded global growth outlooks for 2019 on the 9th of April),
5. Interest rates are set to drop again (it is becoming apparent Quantitative Easing monetary policy is a box that cannot be closed again),
6. There seems to be capital flight to safety - especially into USD treasuries and into the JPY,
7. Gold up 5% since the 22nd of May,
8. There are deeply concerning political signals being sent to the U.S. economy (and the world) by politicians who appear to be working AGAINST the best interests of the nation (despite what are probably good intentions).
9. Plus, if Douchebank goes under it may necessitate liquidation of 47 trillion in derivative contracts www.wsj.com/articles...-problem-1475689629.
My original bearish position on the S&P500 was simply based on points 1 and 2. Despite everything else, these two points are sufficient to explain why this drop will be a big one. If all the gains (capital and dividend) from the past 2 years can be wiped out in a few days or a week, then the investors are clearly taking more risk vs the reward they are receiving (if they are in profit). Tiny dividends are okay as long as the share price continues upwards, but sideways or down just won't do the trick anymore. Most of the buying of the past 18 months seems to have been from buy-backs and leveraged traders. Most of the buying of the past 10 years can be traced directly to Quantitative Easing monetary policy - cheap cash looking for a place to go. There is a chance that the experimental remedy for the 2009 crisis removed the symptoms temporarily while the underlying illness progressed.
I don't want to mention Elliot Wave, as so many people write it off, but EW points to the maturing of a very long-term cycle - I see the bull-run post 2009 as being the final impulse wave up before a correction. Lets ignore EW, but the past 10 years has seen the weakest economic expansion in history parallel with a very strong bull-run in the NYSE / SPX / DOW, is it more reflective of central bank monetary policy instead of real growth? www.bigtrends.com/st...id-rosenberg-warns/.
Oh well, that's enough. Good luck everyone. You might read the above as in a completely different way - and remain bullish. I just can't see how right now. All I see from todays bullishness is a place to note the end of wave (1) down. Next should be a lower high.
Trade closed manually