Stock Market Correction

Stock Market Correction

What is the difference between a Market correction and a back-breaking correction?

A sharp stock market correction is the thing that we encountered in Feb of this current year. The pullback is sharp and quick, and the dread dimensions rise significantly.  A backbreaking revision is unique. The term itself is demonstrative of the distinction. The pullback is exceptionally solid however the unpredictability is crazy, and the market seems, by all accounts, to be bipolar.  Chaos is by all accounts the request of the day, and even the absolute most impassioned of bulls begin to scrutinize their stance.  Every positively trending business sector encounters one such adjustment. Be that as it may, it is difficult to tell ahead of time which redress is going to fall under the extremely difficult category.  Trying to figure out which adjustment falls in this class has an exceptionally high open door cost. It is hard to break out of the “uneasiness arrange” in the event that you have been stuck in it for quite a while. These brokers in the long run get their desire of solid adjustment, however they are scared to the point that they can’t act; they keep on expecting that the market will prop up lower and lower.

Advanced warning for market correction

We expressed in July 2017 that the there would be one revision where the Dow would shed 3500-5000 points.

Without a smidgen of uncertainty, we can express that there will be somewhere around one rectification that drives the Dow lower by 3500-5000 points before this positively trending business sector is over.  Market refresh June 2, 2017.

Two help focuses become possibly the most important factor. On the off chance that the Dow closes underneath 2400 on a month to month premise, at that point we can anticipate that the pullback should fall nearer towards the 5000 point range.  If the Dow closes beneath 23348 on a week by week premise, at that point the above standpoint will likewise hold. 23348 is the low the Dow set in  April of this year. Market Update Dec 18, 2018

As the above help calls attention to taken out, we expressed that the following stage was for the market to test the 22,000-23,000 territories. That has happened, the following stage for the market is to step water while gathering up speed to slant higher.  This stage will be pressed with unpredictability as the market powers the feeble hands to dump their stocks. Brokers who have experienced this stage before will perceive for it is; an ideal purchasing opportunity occasion.

So do not focus on what happens if the stock market crashes scenario; instead, focus on building a list of stocks you always wanted to own at a lower price. History and Mass psychology both  illustrate that permanent stock market bears die broke and that stock market crashes have always proven to be buying opportunities; pull up and long-term chart and try to argue otherwise.

 

THE STOCK MARKET CORRECTION IS PURPOSELY BEING MADE TO LOOK WORSE THAN IT IS

It looks terrible, the media is siphoning apocalypse type situations, solid bulls are appearing of shortcoming, and even contrarian financial specialists are beginning to break. Unadulterated contrarians are more brilliant than the majority, yet they do have defects; the most brilliant financial specialists are the ones that put the standards of mass brain research into play. They watch the mass mentality, and they comprehend that notwithstanding when dread begins to crawl into the condition, they are constrained to ask this question:  Was the group in a condition of rapture when the market beat out? In the event that the appropriate response is “no”, at that point regardless of how horrendous the image may look, the end diversion is that the group is being set up for a bogus descending move.   And the ordinary reaction would “why”. Simple answer, this is an advanced form of Pavlovian training.

Stock Market TrendAnxiety Index gauge

Take a gander at the above notion information; in the meantime refresh conveyed before today we expressed that bearish slant would come in the 45-47 territories; rather, it remains at 49, which is right around a seven-year high rather than a multi year high. We turned wary in Feb of this current year and put all our plays on hold in light of the fact that bullish assumption took off to a seven-year high; despite the fact that this flood in assessment was transitory, it was sufficient for us to turn mindful. Given the present pattern, the following refresh could drive bearish readings north of 50. This information was gathered up to Saturday of a week ago. At the present time the quantity of people in the bearish and unbiased camps means an astounding 80; this consolidated score nearly coordinates the perusing of the 2008-2009 base. The last time we had such readings was more than 10 years back.

Presently take a gander at the nervousness check, this is the most minimal perusing since the initiation of this measure and given the present pattern it could finish up redlining one week from now; we may even be compelled to broaden the range if the perusing is altogether higher than the current week’s perusing.

 

Let us look at some other factors

  • The S&P 500 is trading 14.3 times below 2019 earnings of $178 per share. However, we if remove the highly overpriced FANG stocks, it is priced roughly 12 times 2019 earnings. The historical average is 16.2
  • Value line states that over 100 companies have a forward P/E of 8 or lower; the last time this took place was during the 2008 meltdown but the economy was in shambles at that point, and that is not the case today.
  • A lot of fear is being created due to an inverted yield curve; first of all not all inversions lead to recessions, and secondly, there is roughly a two year lag between the inversion and the recession
  • Investors are sitting on hoards of cash; this refers to those that were active in the markets. If we include those who have avoided the markets, then one can state that there is a huge group that has missed this entire Bull Run. They will be dragged into this market for the top player’s need many suckers do dump their huge holdings onto.
  • The number of “Gloom & Doom” articles is surging, and soon we will have individuals predicting Dow 10,000. Insanity sells; investors were lapping the nonsensical targets of 100K, 200K and the last target of $1 million issued for Bitcoin with straight faces.  Very few insane high-level projections have been made for the Dow.

Conclusion

A backbreaking correction is not easy to deal with. In fact, it is hard for everyone to deal with; the only way to get through it is to pull up long-term charts and examine previous corrections. When you look at those charts, try to imagine what the investors felt as the markets pulled back. If you experienced one of these previous corrections remember the thoughts flashing through your mind. One does not have to go back to far; 2008-2009 the markets experienced one of the most brutal of corrections.   The master of “Gloom” were projecting Dow 2K during the height of the corrective phase; ten years later, one can clearly see how full of rubbish they were. These same guys are now laying out similar predictions.

The best time to kill a Bull is when it is fat, lazy and arrogant. The current bull is a lean and could turn into a “mean fighting machine” after the recent pullback.

 

Courtesy of Tactical Investor

Deutsche Bank set to cut 10K Jobs to reduce costs’ about time those lazy bankers were fired

Deutsche Bank set to cut 10K Jobs to reduce costs’ about time those lazy bankers were fired

The Journal, citing unnamed sources, reported that job cuts were likely to extend into 2019.Separately, Bloomberg News reported the bank was planning to withdraw from a number of equities markets across the globe.

The Bloomberg report, which also cited unidentified people, said that Deutsche would sharply scale back its presence in the United States, and had started cutting activities in Central Europe, the Middle East, and Africa.Deutsche Bank, which holds its annual shareholder meeting on Thursday, declined to comment. The loss-making bank said last month that it was planning to scale back its global investment bank and that equities was one of the areas it was looking at for possible cuts.A person familiar with the matter told Reuters last month Deutsche Bank was expected to cut around 1,000 jobs or 10 percent of its workforce in the United States.

It has also said that it would cut back U.S. bonds trading and the business that services hedge funds.The bank has been expected to announce further details of its reorganisation plans ahead of its AGM on Thursday. hareholders, fed up with a languishing share price and dwindling revenue, will call on the bank’s management to speed up the recovery process at the AGM.

Hans-Christoph Hirt, head of shareholder adviser Hermes EOS at Hermes Investment Management, told Reuters on Wednesday he wanted to see a “credible strategy with achievable targets.” Full story

Now they are firing to balance the books, in the near future they will be firing to get rid of the “expensive human element”. Sadly most of today’s high paid individuals get way too much for doing way too little, and AI is going to dramatically alter the landscape. Remember the equation must always balance, and the more skewed things become the stronger the blowback as the market moves back to the point of equilibrium.

Trump Administration is looking to scrap programs granting foreign entrepreneurs residence for up to five years

Trump Administration is looking to scrap programs granting foreign entrepreneur
WASHINGTON (Reuters) – The Trump administration moved on Friday to end a program that aimed to attract foreign entrepreneurs to the United States, saying the Obama-era effort did not adequately protect American workers and was an inappropriate use of government authority.
The Department of Homeland Security’s formal proposal to rescind the international entrepreneur rule, which is set to be published in the Federal Register next week, was widely expected given the administration had stated its intent to do so last year. The program would have allowed foreign entrepreneurs to stay in the United States for up to five years to manage and grow start-up businesses.

DHS said in a filing on Friday that the program represented an “extraordinary use” of the agency’s discretionary authority, that it “does not adequately protect U.S. investors and U.S. workers,” and that Congress was better placed to create a special visa for entrepreneurs.
The Obama administration established the international entrepreneur rule in January 2017, shortly before former President Barack Obama left office, with an effective date of July 2017. But last year the administration of President Donald Trump, which has moved to sharply curtail both legal and illegal immigration, delayed the program’s effective date to March 2018, while also indicating it would later rescind it entirely. Pro-immigrant groups criticized the decision. Full Story

The news follows the trend; we spoke of this when it was in its infancy (the anti-immigrant trend) and stated at the time that it had barely begun. Now it’s just warming up, so all these developments will look mild 12-24 months from now.

Health Care: Total Costs

Middle-Class Families Confront Soaring Health Insurance Costs

Middle-Class Families Confront Soaring Health Insurance Costs

CHARLOTTESVILLE, Va. — Consumers here at first did not believe the health insurance premiums they saw when they went shopping for coverage this month on HealthCare.gov. Only five plans were available, and for a family of four with parents in their mid-30s, the cheapest plan went typically for more than $2,400 a month, nearly $30,000 a year.

With the deadline for a decision less than a month away, consumers are desperately weighing their options, dismayed at the choices they have under the Affordable Care Act and convinced that political forces in Washington are toying with their health and well-being.

“I believe in the Affordable Care Act; it worked for me under the Obama administration,” said Sara Stovall, 40, who does customer-support work for a small software company. “But it’s not working as it was supposed to. It’s being sabotaged, and I feel like a pawn.”

Ms. Stovall said she might try to reduce her hours and income, so her family could qualify for subsidies on offer to poorer families to help pay for premiums.

Heather Griffith, a 42-year-old real estate broker, said she would put aside much less money for her retirement and the education of her two young children so she could pay the premiums.

Full Story

 

 

Why health care costs are making consumers more afraid of medical bills than an actual illness?

  • Health care costs are spiraling higher, but patient visits to a doctor have been on the decline.
  • A growing number of consumers are staying away out of fear of big bills.
  • However, “untimely visits or delay of visits to the physician ultimately leads to the increased cost of care,” the Cleveland Clinic’s CEO told CNBC.

As health care costs keep rising, more people seem to be skipping physician visits.

It’s not fear of doctors, however, but more of a phobia about the bills that could follow. Higher deductibles and out-of-network fees are just some of the out-of-pocket costs that can hit a consumer’s pockets.

U.S. health care costs keep rising, and hit more than $10,000 a year per person in 2016. According to a recent national poll, over the past 12 months, 44 percent of Americans said they didn’t go to the doctor when they were sick or injured because of financial concerns. Meanwhile, 40 percent said they skipped a recommended medical test or treatment.

Full Story

 

 

Your total costs for health care: Premium, deductible & out-of-pocket costs

Your total costs for health care

When choosing a plan, it’s a good idea to think about your total health care costs, not just the bill (the “premium”) you pay to your insurance company every month.

Other amounts, sometimes called “out-of-pocket” costs, have a big impact on your total spending on health care – sometimes more than the premium itself.

Beyond your monthly premium: Deductible and out-of-pocket costs

  • Deductible: How much you have to spend for covered health services before your insurance company pays anything (except free preventive services)
  • Copayments and coinsurance: Payments you make each time you get a medical service after reaching your deductible
  • Out-of-pocket maximum: The most you have to spend for covered services in a year. After you reach this amount, the insurance company pays 100% for covered services.

Full Story

Millennials: Agrihoods – Investing – Retirement

Agrihoods: The newest trend in millennial living

Agrihoods: The newest trend in millennial living

Millennials are harkening back to simpler days and creating communities on farms, surrounded by nature’s bounty and benefits. There are now more than a hundred of these neighborhoods — called Agrihoods — across the country, Full Story

This living in the nature type development is in its infancy and it’s too early to determine if it will become a trend. However, what this data reveals is that Millennials don’t have fixed values and have they are not loyal to any given brand or ideology. The next generation is going to be even more unpredictable for marketers seeking to make long-term projections.  However, unpredictability is fantastic especially for those who put the principles of mass psychology into use.  This is the reason many companies that look solid today will not be around in the years to come as they will either refuse to adapt or refuse to look at the situation from a different angle.  One area that is  going to experience a sea of change is the financial services industry.

 

Here’s why millennials would rather save than invest

Here’s why millennials would rather save than invest

Millennials are wary of entering the stock market.

New data from the latest Merrill Edge Report shows that, when asked what they’d be able to rely on in 20 years, millennials’ top response was their savings account, according to 66 percent of respondents.

When Merrill Edge asked older generations the same question, the majority of Gen-Xers (71 percent) said they’d be able to rely on their 401(k). The top response among boomers (54 percent) was their pension.

“In stark contrast to older generations who are relying on outside sources for their future financial security, millennials are looking to their self-created savings years down the line,” Aron Levine, head or Merrill Edge at Bank of America, writes in the report. “Millennials place even greater trust in their own stewardship than they do in their personal relationships with their significant other and friends.”

The report shows that young people today are taking a “do-it-yourself” approach to finance and investing, choosing to rely primarily on their own savings in place of vehicles like a 401(k) or IRA. Though many millennials do utilize these tools as well, there’s still an underlying feeling that their own efforts are more dependable.

Full Story

 

Will you have enough to retire?

Will you have enough to retire?

Methodology

This calculator estimates how much you’ll need to save for retirement. To make sure you’re thinking about the long haul, we assume you’ll live to age 92. But you could live to be 100 or incur large medical bills early on in retirement that may raise your costs even further. Social Security is factored into these calculations, but other sources of income, such as pensions and annuities, are not. All calculations are pre-tax.

The results offer a general idea of how much you’ll need and are not intended to be investment advice. The results are presented in both future dollars (at retirement) and today’s dollars, which is calculated using an inflation rate of 2.3%.

How we calculate your savings goal?

First, we determine what your income will be at the time you retire by growing your current income at an annual rate of 3.8% (the inflation rate of 2.3%, plus the salary growth rate of 1.5%). We then assume you can live comfortably off of 85% of your pre-retirement income. So if you earn $100,000 the year you retire, we estimate you will need $85,000 during the first year of retirement. For each subsequent year, we increase your income need by 2.3% to keep up with inflation. We then factor in Social Security by subtracting your estimated benefits (more on that below) since that income will reduce the amount you will need to save.

The second step is to calculate the total savings you will need at the time you retire, in order to generate enough income for each year of retirement. To do this, we determine what it would cost to purchase a fixed income annuity, with inflation-adjusted payments, using a discount rate (or rate of return) of 6%. The cost to purchase this hypothetical annuity is your target savings goal.

Full Story

Experts Making Stock Market Crash Forecasts usually know nothing

Stock Market Crash Forecasts usually know nothing

Over the past several years the Naysayers have predicted the Market would crash and burn; we blatantly disagreed and opted instead to state that the market would continue to soar higher and higher. Despite the severe beating these naysayers have taken, they insist on regurgitating the same trash over and over again in the blind hope that by some miracle their insane ramblings come to pass.  As soon as October was upon us, these experts started screaming at the top of their lungs. What was their latest prediction; a repeat of the 1987 Stock Market Crash.  We immediately repudiated these predictions. Here is a brief excerpt from the article posted in October by Tactical Investor.

They never seem to let up on pushing this sewage onto the unsuspecting masses. This is a clear example of insanity in action;  mouthing the same thing over and over again with the desperate hope that this time the outcome will be different.  The outcome will not be different this time, at least not yet. These guys should focus on writing fiction for reality seems to elude them completely. For years we have stated (and rightly so) that until the sentiment changes, this market will continue to soar higher and higher.

The latest nonsense is to state market omens that have a terrible record of coming to pass are about to trigger a crash; ones odds are better if one looks at tea leaves, plays with skull bones or hires some monkey to throw darts at a board with the words up or down plastered on it.   One has to determine the trend first and look at several underlying forces before one can attempt to predict where the market is headed. However, these fools read a book or two, memorise someone else’s theories and assume all of a sudden they are experts. Fundamentals and technical’s are both useless when used in isolation. One has to look at the emotion driving the markets. In other words, what are the masses thinking or doing? When one looks at the sentiment data, the conclusion is inescapable. Stock markets always crash on a note of euphoria and the masses are far from being happy.

Wall Street Experts Good For Nothing but Hot Air

Over the past 20 years U.S Markets have experienced two brutal crashes and on both occasions, almost all of the so-called  Wall Street experts were caught with their pants down.  The two cases in questions are the Housing bust and the dot.com bubble. Additionally, almost every two top economists failed to predict the great recession of 2008.  On the same token, these Jackasses (otherwise known as experts) failed to predict one of the biggest bulls of all time.

Masses are not embracing one of the Most Hated Bull Markets in History

The images below speak a thousand words, so there is no need for us to add any commentary.

Bullish Neutral Bearish Index

Anxiety Index

 

The Technical Outlook

Dow chart November 16th

While the Dow is trading in the extremely overbought ranges, any pullback will most likely end in the 21,000-21,500 ranges.  For the correction to pick up steam, it would need to close below this level on a weekly basis.  As the trend is still positive, the odds of the Dow crashing are very low. At the most, the Dow would test its breakout point which falls in the 18,900-19,200 ranges unless the trend were to turn negative suddenly or the masses suddenly embraced the market with gusto.  At this point, the trend is strong and showing no signs of weakening.  Remember that the markets can remain irrational for much longer than most traders can remain solvent by betting against it.

Inflation remains a non-issue on a worldwide basis

Central banks worldwide are either standing down or opting for rate cuts.  This indicates that while the economy is improving somewhat, the global economy is far from healthy and low rates will continue to dominate the scene.  In a lower rate environment corporations borrow more money and the new game is to use this money to buy back shares and in doing so magically improve the EPS.

Conclusion

When the Dow was trading below 20K, we stated that the next target was 21K; this target was struck in a few short months. After that, we raised the target to 22 and 23K.  Now we will go on record and state that the Dow is likely to test 28,000-28,500 with a possible overshoot to 30K before it crashes.  We will be providing our subscribers with an in-depth analysis of the path the Dow will traverse to achieve this target.    We don’t expect the Dow to just shoot to these targets, certain requirements have to be fulfilled, but so far the Dow is following the path we expected it to take.

Before you listen to these so-called experts who seem quite happy to dish out faulty information, take a look at their track record. A simple search will reveal that over 90% of them are full of hot air and had any of these Dr’s of Doom followed even a sliver of their advice, they would have been blown out of the game long ago. The fact that they are still here tells you that they are trying to pan their sage advice to you in return for a certain fee; advice they would never follow.

A simple game plan

View strong corrections through a bullish lens. This game plan will remain valid until the masses turn bullish or the trend turns negative.  The stronger the deviation, the better the opportunity.

 

Published courtesy of the Tactical Investor

China Seeks Foreign Help in Risky Work Finding Oil in Disputed Sea

China Seeks Foreign Help in Risky Work Finding Oil in Disputed Sea

Beijing is looking for foreign contractors to help find oil and gas under the South China Sea but expects to meet resistance because other governments contest its claims and any discoveries may bring low returns. China’s state-run China National Offshore Oil Corp. issued a tender last week for foreign companies to join it in exploring for…

Ant Financial sees rich opportunities

Ant Financial sees rich opportunities

Tim Clancy, from Australia, pays a bill with his smartphone at a restaurant in Hangzhou, Zhejiang province, on Friday. [Photo provided to China Daily] Ant Financial Services Group said on Monday it will extend its indigenous mobile payment technologies to economies along the Belt and Road Initiative and unveil a number of Alipay-like services this year.…