Remember, just a few months ago in February, the markets had a severe and sudden plunge. Investors and money managers were too surprised to take any action.
They just sat there looking at their screens in amazement while the indices made severe intraday moves, up and down, as investors tried to determine what was causing the volatility.
On February 2, the computers of the algo-trading firms had taken over, causing moves that made no real sense. The following Monday, February 5, the DJI plunged from a loss of 900 points to a loss of 1600 points in virtually minutes, closing
Once again this week the markets plunged on a Friday, this time seeing the Dow plummet 767 points intraday.
Amid all the geopolitical risk and tariff threats, the investment markets are experiencing volatility many experienced and seasoned investors have never seen.
When analyzing the price/volume trends, we see incredibly important signals in our technicals that suggest perhaps the bull market could be running out of steam and we may have already seen the highs of the year.
Markets oscillate, they don’t go in a straight line. Novice investors often don’t realize that. When I speak at a conference, and for example I am bullish on the stock market, an investor will come up and say, “But you’re wrong because the stock market was down the past two days.”
Such an investor should buy US Treasuries and go golfing.
Oscillations and waves occur everywhere in the universe. Did you hear about the recent discovery of “gravity waves” the existence of which was predicted by Einstein? Finally they have instrument to prove their existence.
After the major market indices have seemingly been in a freefall since the beginning of the year, yesterday, January 14th, marked the biggest rebound for 2016.
Analysts in the media believe yesterday’s gains mean that that we’ve hit a “bottom,” saying the markets are in the clear and going higher. They even suggest “buying the dips!”
Here Comes The Recession And Bear Market
As our dedicated readers know well, we predicted major global stock market declines since early 2015. Our analysis showed the big selling being done by Wall Street, even while their analysts told investors that all was great.
As it turned out, there was no big “year-end rally” last December. In fact, we entered 2016 the same way we ended 2015: severe plunges in the major indices.
Have you ever noticed that stocks decline much faster than they rise? That means big profits for those who know how participate on the short side of the market.
We have warned about the stock of Apple throughout 2015. Bert Dohmen’s latest article on Forbes.com, from mid-December was headlined: “Why Apple Will Enter A Bear Market In 2016.”
Let me discuss one major error of most analysts you see in the media. It is about the Fed rate hike. There is a great misconception.
The majority of analysts tell you that the 0.25% rate hike by the Fed is not important. They obviously know little about how the Fed works.
But this is much more important than just a small rate hike. One has to know what it compels the Fed to do to achieve its goal.
Why Apple Will Enter a
Bear Market in 2016