Bear Cave 2 (Bull Allowed)

Sort by newest Sort by date
Adam believes we are in a mid-secular-bear cyclical bull - I believe we are in a cyclical bull inside a mega trend secular bull that will last many more years. In 2013 the SPX was up 29.6%, another 30% gain in 2014 takes the SPX to 2354 which is darn close to my original target of 2400. The VIX is now getting ready to drop into the 14 zone and the bottom was placed with a nice kangaroo tail on Wednesday. We could see some more animal spirits on Monday. If I can come anywhere close to my 2400 target my oceanic has the potential of a +$3M year. Now that would be kosher.
 
I have been a sub with TRI for around a year.


FEBRUARY 8, 2014PUBLIC POST

A WIDER PERSPECTIVE


I don’t post publicly very often anymore now that I have closed my site to new subscribers, but every now and then it is healthy to objectively look at the market and where it could be in the bigger picture.

The overly popular “inflation to the moon because of QE” narrative that was well-rehearsed amongst the investing public has proven to be false, and now looking ahead we must be aware of the paths that the market could take to fool the most people possible.

First off, to clarify my outlook I will simply list them while remaining open to any possibility:


1. Stocks are in Wave 1 of a new secular bull market
2. There will be a deflationary event in the next two years to end this cyclical bull run in stocks (Wave 2)
3. We will see the US Dollar index test its overhead trendline at the 90+ level in the next 2-3 years
4. Gold and commodities have not seen their cyclical bear market lows, and they will be pulled down by deflation again in the next 2 years
5. The secular bull market in interest rates has seen its secular low in 2012
6. Interest rates will dip one more time in the next two years, but that will begin the next leg of a secular bear market
7. The overall market has been in a deflationary cycle since 2008, and will transition to an inflationary one after the next deflationary event
8. Inflation will be beneficial for both stocks and tangible assets simultaneously as the dollar eventually moves down in 2016+

A Wider Perspective | The Refined Investor
 
Bullitt said:
My sources say Adam lost a boatload in 2013 playing with puts.
Click to expand...


You are correct......I have been a sub with Adam for over 3 years, and he did lose lots of money in 2013 shorting the S&P 500.....and long gold/gold miners stocks. He still thinks, and is currently positioned for what he thinks will be around a 50% correction over the next few years for S&P 500.



"Today's cyclical stock bull is nearly 5 years old, and wildly oversized. On top of that, stock valuations have surged to dangerous bull-killing extremes. So the next cyclical bear is much more likely than a mere correction.

This would cut stock prices in half over a couple years!

The best way to weather it will be in gold, which is inversely correlated to the SPX and overdue to rebound strongly."
 
Is the Stock Market Correction Over?
Saturday, February 8, 11:40 a.m.


So is the correction over?

It’s possible but unlikely.

The catalyst for the rally seemed to be the ADP jobs report on Wednesday and the Labor Department’s employment report yesterday.

The potential problem for the rally is the history of the Labor Department’s employment reports. As subscribers and long-time readers of this blog know, we refer to the Labor Department’s monthly report as ‘The Big One’ because they so often cause a one-to three day triple-digit move by the Dow in one direction or the other, and the other side of the history is that the move is usually reversed over subsequent days, and the market returns to whatever was its focus prior to the report.

In this case, that prior focus was on the slowing U.S. economy, renewed concerns about a hard landing in China, the potential effect of the Fed’s tapering on emerging markets, and so on. The dismal jobs reports did not alleviate any of those situations, in fact exacerbated them.

Meanwhile, there is the possibility that the 50-day m.a. may now be overhead resistance.

So we shall see.

The similar situation in European markets, which rallied the last two days along with the U.S. market, is also interesting.

StreetSmartPost
 
BluSTar is at it again........I say we shall see.


Sell-Off Monday?, Looks Like 25 SPX Points to Me

I have poured over the charts and it looks like an analogy to Jan 29 coming in on Monday. That is basically 25 SPX points down for the day. Tuesday is up and we could go all the way to as high as the 1812/13 area, but at least into the low 1800's minimum.

In bear rallies, 16 TD cycle lows work at least 4 TD's up (Tuesday top), 8 TD's go 2 TD's up (we had that Friday) and the 4 TD low 1 TD up (Monday into Tuesday).

The 4 TD cycle low from last Wed is due early Tuesday, but the dominant low last week happened late Monday creating a melding effect to late Monday this week (3/5).

On the 8 TD cycle tops, one was due Friday from 8 TD before on Jan 28 and the other is due Tuesday this week from Jan 30's top. Tues-Thursday next week is down, Friday even.

I have found three important bisector lows this month: Feb 13, Feb 19 and Feb 28.

Feb 13 should be -a- of ©, -b- of © Friday, and -c- of © Feb 19 near 1651 +/- 5 pts.

Sell-Off Monday? - Traders-Talk.com
 
February 10, 2014
Double Trouble

John P. Hussman, Ph.D.

On the basis of a broad range of valuation measures that are tightly (nearly 90%) correlated with actual subsequent S&P 500 total returns over the following decade, we estimate that stock prices are about double the level that would generate historically adequate long-term returns. The chart below presents estimated versus actual 10-year S&P 500 total returns using a variety of methods that I’ve detailed in prior weekly comments, and including a few additional ones for good measure. We presently estimate 10-year S&P 500 nominal total returns of only about 2.7% annually over the coming decade, with negative returns on all horizons shorter than about 7 years.

Hussman Funds - Weekly Market Comment - Double Trouble - February 10, 2014
 
Update #1972: Monday early morning, February 10, 2014: Commitment​s 2014-2-7; life on planet Earth


I added an additional rung to the top of my ladder for HDGE, so that I will begin buying it again at 12.99 instead of 12.89. I will continue to add to this position each time it drops another 10 cents. Each of these orders is for 0.10% of my total net worth. I began buying HDGE when it first dropped below 13 in December 2013, and have made repeated purchases especially at 12.79. Betting on lower U.S. equity prices is almost always an intelligent decision whenever the S&P 500 is above 1800, because eventually the pattern of higher highs and lower lows for this index which goes back to the mid-1990s is going to result in a bottom below the 666.79 nadir of March 6, 2009. Even if I'm wrong and we end up with a higher bottom than I am expecting--and almost surely I'm too optimistic rather than the other way around--the overall decline for virtually all U.S. equity indices over the next few years will surely be more than half.


Was Friday's U.S. employment report "important"? In my opinion, this data is about as useless as knowing whether the 50-day moving average has crossed above or below the 200-day moving average. However, since many people actively trade around this report, just as they do with technical analysis, it is essential to prepare in advance to deal with it. It's very similar to what you would do if all of your opponents in a game of Monopoly choose not to buy any property which they land on after rolling doubles; it's completely irrational, but if you can adjust your behavior to fit such human irrationality then you will live long and prosper like an unemotional Vulcan (i.e., Mr. Spock, who did quite well for himself). The December employment report coincided to the minute with five-year bottoms for GDX and GDXJ; the January report created its own short-term emotional extremes; and Friday morning again established what will likely prove in hindsight to be key turning points.

True Contrarian
 
robo said:
February 10, 2014
Double Trouble

John P. Hussman, Ph.D.

On the basis of a broad range of valuation measures that are tightly (nearly 90%) correlated with actual subsequent S&P 500 total returns over the following decade, we estimate that stock prices are about double the level that would generate historically adequate long-term returns. The chart below presents estimated versus actual 10-year S&P 500 total returns using a variety of methods that I’ve detailed in prior weekly comments, and including a few additional ones for good measure. We presently estimate 10-year S&P 500 nominal total returns of only about 2.7% annually over the coming decade, with negative returns on all horizons shorter than about 7 years.

Hussman Funds - Weekly Market Comment - Double Trouble - February 10, 2014
Click to expand...

Thanks for posting this article, great analysis IMO. You know, it makes sense, my "feeling" is we're hitting a top. It's kinda weird, very smart and wise stuff, and unless I'm missing something, I clicked on the fund returns, and they're pretty darned dismal. I guess it's one thing to hit the analysis on the head, and it's another to use it to produce positive gains. There's folks on our autotracker that's killing these funds year over year. Sure wish I was one of them!
 
CrabClaw said:
good morning!

are you headed into the week with any ideas on the miners?
Click to expand...


If we want to buy the miners now we will have to pay up. Rambus added his second tranche Friday of JNUG @ 27.18 and will probably just keep adding to his position today. I'll let you know...., but Savage, TRI and Quad ( some of my paid services) are also joining the party. It looks like we will have to just BTFD, and pay up to own them/trade the miners now. I bought and took a position trade of USLV on Friday, but silver hasn't moved much yet. It's going to get harder to chase now, so I'm going to keep my position sizes under control, but we will not be able to buy JNUG under 20.00 again.

The bottom line for me is I'm going to trade GDX and GDXJ more ( Risk Management), or keep position sizes of NUGT under control. It was nice buying JNUG @ 13.00, but those days are gone.

Good trading to you.
,
 
jonfresno said:
Thanks for posting this article, great analysis IMO. You know, it makes sense, my "feeling" is we're hitting a top. It's kinda weird, very smart and wise stuff, and unless I'm missing something, I clicked on the fund returns, and they're pretty darned dismal. I guess it's one thing to hit the analysis on the head, and it's another to use it to produce positive gains. There's folks on our autotracker that's killing these funds year over year. Sure wish I was one of them!
Click to expand...

When I was younger it use to trouble me also, but after investing/trading during and thru 2000 and 2008 Bears it doesn't bother me now. It's also Kaplan's opinion we are building/hitting a top (read comments above), and I follow him pretty close for his long-term data. Kaplan and Hussman could both be wrong, but tops are a process, and I agree with them so for Risk Management reasons I'm in the G Fund. However, I'm retired and don't like to take muck risk these days with TSP or 401k money. Kaplan has no money in S&P 500 type funds and Hussman is HEDGE . Kaplan is also currently building a long-term short position using HDGE.

(HDGE) Ranger Equity Bear ETF | AdvisorShares


I'm staying with Hussman and Kaplan, and will just have to watch the market go higher and the leaders on the tracker keep making money.

Sort-term trading is another story, and is no more then gambling to me. Now, after saying that I'm a ok gambler, and I have fun doing it with funds I can afford to lose, but my TSP and 401k money are not those type of funds.
 
Last edited:
CrabClaw said:
good morning!

are you headed into the week with any ideas on the miners?
Click to expand...

I'm not going to buy/add anymore miners this week, and might even reduce as we get closer to the DCH which is coming soon...now, this could be a bad move, but that's my plan for now.

Good trading.
 
robo said:
We presently estimate 10-year S&P 500 nominal total returns of only about 2.7% annually over the coming decade, with negative returns on all horizons shorter than about 7 years.
Click to expand...
Great, and 7 years is about all the time I have left until I had planned to retire. That and the fact that my last sell-low fiasco put me back below my 2007 High means it's game-over for me. looks like I'll be working longer but then I expected that.
 
robo said:
I'm not going to buy/add anymore miners this week, and might even reduce as we get closer to the DCH which is coming soon...now, this could be a bad move, but that's my plan for now.

Good trading.
Click to expand...
Sorry robo, DCH?
 
Frixxxx said:
Sorry robo, DCH?
Click to expand...


A very good chance today's gap up gets filled during the next DCL ( Daily Cycle Low) and the DCH (Daily Cycle High) I think is close. Looking to maybe buy NUGT under 40.00 by next week. I bought NUGT under 25.00 last month, but I don't hold 3X indexes for position trades. I only short-term trade them most of the time. I use GDX, GDXJ, SLV, etc...for position trades.

Rambus is waiting on a BT and that's about what I'm doing.

NUGT - SharpCharts Workbench - StockCharts.com

http://rambus1.com/wp-content/uploads/2014/02/NUGT-BUY-41.84.png


Sorry it was December, not last month that I bought NUGT under 25.00.....I make lots of trades.

12/19/2013 12/24/2013 20131219XDDBECE NUGT Bought 1000 NUGT @ $ 24.77


Good trading.
 
Last edited:
Cactus said:
Great, and 7 years is about all the time I have left until I had planned to retire. That and the fact that my last sell-low fiasco put me back below my 2007 High means it's game-over for me. looks like I'll be working longer but then I expected that.
Click to expand...

Maybe Kaplan and Hussman are wrong, but I'm following Kaplan's long-term model for now.

Good luck to you and retirement is nice once you can do it. I hope your health holds up because that's the key.
 
Shorting a Bear Market Will Always Be Perilous

FEBRUARY 10, 2014 12:08 AM GMT ·
We should be careful not to underestimate the power of the short squeeze begun from last Wednesday’s lows. The past tells us that bear rallies are usually more powerful , fleeting and ferocious than upthrusts that occur in bull markets. A such, the 450-point rally that occurred last week could be just a warm-up. My gut feeling is that the most devastating bear market in history has already begun. But that doesn’t preclude the possibility of a blow-off top that would serve two purposes: 1) disemboweling the last remaining bears, and 2) trapping bulls for the killer avalanche that would follow.

If such a scenario is about to unfold, we have a precise Hidden Pivot target to use for the bull market’s last gasp: DJIA 17622. That is exactly 1828 points above Friday’s closing price, and it would put a fitting end to the low-grade mania that has pushed stocks relentlessly higher since March 2009.
In attempting to catch The Top, I will continue to recommend the purchase of put options at promising rally targets. Subscribers have already done so — again — via the purchase on Friday of March 150 weekly puts in the Diamonds. We have taken pains to limit theoretical risk to relative nickels and dimes, using a 15-cent stop-loss. It helps that we are playing with the ‘house’s money’, having racked up a paper gain of $1920 from DIA puts purchased in mid-January.

In recommending short or long positions, I almost invariably shun gut feelings, relying instead on purely technical indicators. In this case, however, I am acting on the belief that the so-far moderate slowing of global economic activity has fatally damaged the illusion of recovery that the central banks have worked so hard to create. ‘Inflate or die’ has long been the number one imperative of the bankers, but my gut feeling is that deflation is finally about to defeat them.

Trading Newsletter for Gold, Silver, Stocks and Mini Indexes
 
You must log in or register to reply here.
Back
Top