Visualizing The Market Cycle

Is it possible to time the market cycle to capture big gains?
Like many controversial topics in investing, there is no real professional consensus on market timing. Academics claim that it’s not possible, while traders and chartists swear by the idea.
That said, as VisualCapitalist’s Jeff Desjardins notes, one thing that everyone can probably agree on is thatmarkets are cyclical and that securities do have recurring chart patterns. They aren’t predictable all of the time, but learning the fundamentals around market cycles can only help an investor in furthering their understanding of how things work.
The following infographic explains the four important phases of market trends, based on the methodology of the famous stock market authority Richard Wyckoff. The theory is: the better an investor can identify these phases of the market cycle, the more profits can be made on the ride upwards of a buying opportunity.

This post was published at Zero Hedge on 04/30/2016.

15 Warning Signs of Possible Market Top, Recession Next Year

In Wednesday’s podcast, Chris Puplava provides a comprehensive update on PFS Group’s economic outlook for the US by explaining the message coming from each of the 15 charts below.
Many of these forward-looking indicators are regularly discussed in our weekly broadcasts and comprise the core pillars of our analysis and forecasts. They were also used as evidence in Puplava’s many warnings during the 2007 market peak (see samples below) that major downside risks had materialized for the US economy and stock market.
August 22, 2007: Proceed With Caution
August 29, 2007: Credit Erosion: The Worst Is Yet To Come
September 5, 2007: Will Financials Be to This Bull Market…What Tech Was to the Last?
December 5, 2007: Survey Says: Watch Out Below!
An increasing number of these same indicators, which flashed a warning sign at prior market tops, are starting to signal caution once again.
In reviewing the data below, Puplava says, absent a major turnaround or injection of stimulus, the odds are increasing for a US recession in 2017 and a possible peak in the stock market this year.

This post was published at FinancialSense on 04/26/2016.

Near-Simultaneous Earthquakes

Since our model turned up in March for activity around the Ring of Fire in the Pacific, there have been near-simultaneous earthquakes opposite of each other in the Ring of Fire. An earthquake with a preliminary magnitude of 5.8 hit the Kumamoto prefecture in southern Japan on April 18, according to the Japan Meteorological Agency. Then a near 7.0 earthquake hit Ecuador on April 20. A major earthquake 7.0-7.3 hit the Pacific nation of Vanuatu early on Friday, April 29 (their time), briefly prompting a tsunami warning that was cancelled after locals reported no significant damage. There was also an M6.6 earthquake on the Northern East Pacific Rise in the ocean about 800 km from Mexico. We are starting to see activity within a day or two on opposite sides of the plate. Our preliminary computer models are showing an uptrend in activity for earthquakes and volcanoes from March of 2016. Something seems to be brewing.

This post was published at Armstrong Economics on Apr 29, 2016.

Jim Grant: The Fed Is in the Business of Making Things Worse (Video)

Jim Grant appeared on CNBC’s Closing Bell to discuss the Fed’s latest non-move in interest rates, noting that ‘it seems awful familiar.’
Grant offered a stinging indictment of the Fed’s role in the world, pointing out that central planners simply can’t juggle all of the varying factors in the economy. Every move the Federal Reserve makes to ‘fix’ a problem brings about another set of unintended consequences.
The Fed is in the business of making things worse as it seeks to make things better.’

This post was published at Schiffgold on APRIL 29, 2016.

Silver Commitments of Traders – the Saga Continues

This is really getting to be quite something to witness.
After that huge volume blow off day of April 21, when silver spiked to $17.75 and then promptly collapsed 100 points ( a full $1.00), I thought we would certainly see some signs of long liquidation in this week’s Commitments of Traders report. After all, the poor souls who bought up above $17.50 only to have the price collapse on them within 60 minutes had surely bailed out.
If they did, they must have been promptly replaced by even more hedge fund buying because believe it or not, the hedge fund long position got even larger this past week, and that does not even include the buying orgy that was sparked by the FOMC statement on Wednesday and more importantly the inexplicable lack of action by the Bank of Japan on Thursday, which as we all know by now, lead to a buying frenzy across the commodity sector but especially across all the metals, both precious and industrial. I cannot even imagine how much more lopsided this thing has become after the price surge of the last three days of this week.
Take a look at the hedge fund positions as of Tuesday this past week.

This post was published at Trader Dan on April 29, 2016,.

What Are The Three Signs Of A “Disorderly” Currency Market: Richard Koo Explains

One of the biggest ironies in recent months has been the Bank of Japan’s recurring insistence that it would promptly intervene in the FX market if the ongoing “disorderly” moves in the Yen do not stop. This was ironic because it was the BOJ’s own insistence in characterizing virtually every move as disorderly that ultimately led to the most disordely move of all this week when following the BOJ’s “disappointment” in failing to do anything, the Yen soared the most in years, to a level not seen since October of 2014. Now that was a truly “disorderly” move, which was only made possible by the BOJ’s constant and misguided rhetoric.

This post was published at Zero Hedge on 04/30/2016 –.

Consensus Forming: China Heading Back Into Financial Crisis

China’s historic post-2009 debt binge flew largely under the radar – fooling most observers into thinking the global economy was recovering rather than just re-leveraging.
Now Beijing is back at it, borrowing over $1 trillion in this year’s first quarter, buying up commodities and creating the illusion of global growth. But this time the scam hasn’t gone unnoticed. Reporters, editors and money managers seem, at last, to be catching on. Some representative headlines:
George Soros warns of credit crisis in China
Chinese cities dive back into debt to fuel growth even as defaults rise
China debt climbs to US$25 trillion
China’s banks cut bad debt buffer as profits flatline

This post was published at DollarCollapse on APRIL 30, 2016.

Let’s Stop Pretending Nuclear Power Is Commercially Viable

Submitted by Leonard Hyman and William Tilles via OilPrice.com,
First its new president, Jean-Bernard Levy, said French state utility EDF would delay a decision on its joint French-Chinese nuclear project in the UK, Hinkley Point. That was over a year ago. Then theCFO of EDF, Thomas Piquemal, quit reportedly because he opposed the project on financial grounds. That was a short time ago. Then after a slew of leaked memos, the French government just announced that EDF would be raising more money and the Hinkley decision would now come in September.
David Cameron’s government in the UK backs this exceedingly expensive project and the French government controls both EDF and Areva, the nuclear manufacturer that developed the nuclear system to be used at Hinkley Point. (Two other plants in Finland and China using this technology are still under construction, behind schedule and over budget.) As part of a plan to rescue Areva (which has lost money in each of the past four years and has negative equity, meaning the share-holder investment has been wiped out), EDF agreed, earlier in the year to buy Areva’s nuclear engineering division. Clearly, France views its nuclear ambitions as a matter of national prestige and intends to support Hinkley Point.
Now for the finances. These British nuclear units will cost roughly 18 billion ($27 billion). EDF has already sold a 35 percent share to the Chinese state nuclear company. However EDF still has to find more outside investors and get its ownership of the plant below 50 percent or it will have to consolidate Hinkley Point on its books and show all of the project’s debt on its own balance sheet.

This post was published at Zero Hedge on 04/30/2016 –.

Spanish Banks Brace for Ultimate Showdown

‘Very serious threat … to Spain’s entire mortgage market’: Moody’s
By Don Quijones, Spain & Mexico, editor at WOLF STREET.
A bitter, long-simmering conflict finally appears to be reaching its finale in Spain. On one side of the divide are the country’s biggest banks and some of the world’s largest investment funds; on the other are hundreds of thousands of families who lost their homes after the collapse of one of Europe’s biggest ever housing bubbles, together with the many thousands more who face the same fate today or tomorrow.
In Spain, more than in most places, debt stays with you until death do you part; it is never forgiven nor forgotten, and mortgages are ‘full recourse.’ Even when a bank, often with the heavy-handed assistance of the forces of law and order, has repossessed someone’s home, that person could still be left on the hook for thousands, if not hundreds of thousands, of euros of debt.
Most Spanish foreclosure victims end up personally liable for not only much of the outstanding loan, but also thousands of euros in penalty interest charges and tens of thousands of euros in court fees. They can end up owing more than the original mortgage, but with no house to speak of, or live in.

This post was published at Wolf Street by Don Quijones ‘ April 30, 2016.

NIRP Has Officially Arrived: Interactive Brokers Starts Charging 0.25% On Yen Cash Balances

Three months after Japan unveiled NIRP – mostly for local banks – the effect for everyone else has finally arrived.
As IB warns its FX traders, starting Monday, Interactive Brokers “will move to a credit interest policywhich allows for negative rates on long cash balances held in JPY where accounts with balances over approximately 100 thousand USD will be subject to the current Benchmark Rate minus 0.25%.” Why? Because while initially the negative interest rate policies unveiled by “many central banks were viewed as short-term measures, they now appear to be policies with open-ended duration.”
These NIRP costs are now being passed on to FX traders, and very soon, to depositors.

This post was published at Zero Hedge on 04/30/2016 –.

Doug Noland’s Credit Bubble Bulletin: The Red Line

This is a syndicated repost courtesy of Credit Bubble Bulletin. To view original, click here. Reposted with permission.
April 25 – Financial Times (Jennifer Hughes): ‘Stand easy – or easier, at least. Ten basis points might not be the biggest one-day change for borrowing costs in China’s vast $7tn bond markets, but it was enough on Monday to push the country’s closely watched onshore repo rate back from an eight-month high. That offers a little breathing space for investors to ponder what next for the rising tensions in onshore bond markets. One point to look at is their own leverage as well as their fears for companies… Amid all the furore about the pain of rising rates, one so-far overlooked factor is that investors, as well as companies, appear precariously balanced. The market for pledge-style repos – short-term, bond-backed loans – is currently bigger than the stock of outstanding debt, according to Wind Info. A sharp worsening in market sentiment could force those borrowers into fire sales if their loans are called or cannot be rolled over.’
I recall an early-1998 Financial Times article highlighting the explosive growth in Russian ruble and bond derivatives. Not only had the ‘insurance’ market for risk protection grown phenomenally, Russian banks had become become major operators in what had evolved into a huge speculative Bubble in Russian debt exposures. That was never going to end well.

This post was published at Wall Street Examiner by Doug Noland ‘ April 30, 2016.

“Don’t Fly Near Our Borders” – U.S. Spy Plane Again Intercepted By Russian Jet

According to CNN, yet another close encounter took place between the U. S. and Russia yesterday, as a Russian SU-27 allegedly conducted a barrel roll over top of a U. S. Air Force RC-135 reconnaissance plane flying over the Baltic sea. The incident was in international airspace according to the Defense Department.
This is the second time a Russian jet has allegedly barrel rolled over a U. S. plane flying over the Baltic, and the incident marks the fourth close encounter between the two countries just this month, as tensions continue to rapidly escalate between the two countries.

This post was published at Zero Hedge on 04/30/2016 –.

The Week in Review: April 30, 2016

Surprising no one, the FOMC announced this week that they would maintain the status quo on the federal funds rate. Meanwhilehousing prices are outpacing household wages, with Ryan McMaken noting that the Fed’s suppression of interest rates has led to consumers replacing ‘saving with consumer debt (i.e., mortgages) and a hope that people can continue to make the high payments every month. It’s not a terribly wise long-term economic strategy, but it’s one the Fed is banking on.’ Meanwhile C. Jay Engel highlights a few more troubling indicators, including a decline in durable goods orders, the Atlanta Fed being forced to lower GDP estimates, and the ‘the difference between pro forma and GAAP corporate earnings numbers are at the highest since the previous financial crisis.’

This post was published at Ludwig von Mises Institute on April 30, 2016.

Lyin’ GOP

A few days ago I was struck by the response of Laura Ingram on Fox news to the question of whether Ted Cruz’s strong comments in opposition to allowing transgendered men to use women’s restrooms would help him in his battle against Donald Trump. Presumably, since Trump equivocated on this ‘social issue,’ while Cruz took the ‘conservative position,’ the Right would now move toward the Texas senator and away from Trump. Ingram responded that she didn’t think that present or future Trump supporters really care about who says what about transgendered restrooms. They just don’t believe anything they hear anymore from the GOP establishment or from anyone this establishment backs. Republican spokesmen already ‘lied to them so many times, especially on social issues,’ that the party regulars are now suffering from a perhaps insuperable credibility gap. For a short time (that is, as long as they thought they could obtain votes by taking this stand) Republicans pretended to be against gay marriage. But as soon as the Supreme Court took over the issue and nationalized gay marriage in a shocking instance of judicial overreach, the party breathed a collective sigh of relief. They could now go back to what they did best, feathering their own nest and collecting funds from favored interests.

This post was published at Lew Rockwell on April 30, 2016.