Kevin Wilde

Long/short equity
Kevin Wilde
Long/short equity
Contributor since: 2011
Robert, I can tell you IWM is the worst chart of all the indexes, clearly exhibiting downside leadership. Worse, my short term indicators triggered new sells yesterday, after triggering new buys in early August. That signals danger ahead for all indexes - at least in the short term - with IWM likely to fall the hardest. View chart here
<< The issue is leverage, debt, margin etc. We are at historic high levels of margin debt at the moment. So when margin calls happen, or people get skittish and reduce leverage - the amount of "money" is in fact shrinking>> I for one totally agree with this, and history is never kind to this kind of set-up, where first time a corrective dip fails we get big time margin calls that obliterate the overleveraged players who bring the house down. That is what ends bull markets, and when margin leverls get this scary high it always leads to a financial crises. But until that happens buy the dips works, and that is what the indicators are saying now: time to buy. But unfortunately risk of something bad happening only accelerates each time buy the dip bulls are successful, and the higher we go the greater the degree of the financial crises coming out the other end.
My indicators also say it is time to buy the dip. Chart and discussion:
All seems like 1999 to me, though as I lay out in this article 1987 may be all we get and right here
Talk and Nifty Fifty fits the new sell from my investor sentiment indicator, which I lay out in this article
I go long - leveraged long - when stock market trends turn positive, though the bear potential is much greater at this juncture than the bull, due to five year of bull, and bears follow bull just as bull follows bear. Very few people learn that, especially the perma bulls, which outnumber the bears by 100 to 1.
That's my take too, and I have XJY in confirmed uptrend while US stock market is in confirmed downtrend. Indeed, as I lay out in this article, bears have reached the lip-smacking phase
Moon, a tad harsh IMHO, since the trend remains up. When that puppy turns, then we can kick the shins of the complacency crowd. Till then, the trend is your friend (though I agree with your broader premise that we are overdue a very bad accident....)
Well following the trend is the way to go for both the boom and the gloom phase, though the bull/bear cycle indicator just turned negative for the first time since mid-2011. That said to sell early 2008, buy March 2009, sell mid-2011, buy end of 2011, and now sell. So next gloom phase maybe forming here as market is losing critical momentum. Clink on link to view chart
Very possible - and I'm long QQQ - though the VIX approaching a sell set-up across the lower Bollinger Band, and the bull/bear cycle indicator just turned negative suggesting the stock market is losing critical momentum as I lay out in this post
Calm ahead of the storm indeed! Bull/Bear Cycle indicator made the bear turn Monday.
Awesome article. In regards to the FED and their taper, I fear a Marty Zweig "three moves and a stumble" rule peak and reversal, where the stock market laughs and goes on higher on the first two moves, only to fall victim to a peak and reversal on the third, which of course we got this month. The VIX is also acting weird here, suggesting the S&P500 is likely to slip below that the breakout level shown in your final chart, which I discuss here.
The VIX is signaling another plunge for stocks later this week.
I agree the potential is certainly there for the next bear to morph into something quite terrible, though we are getting way too head of ourselves till we see signs of the big win that confirms the bull/bear cycle has turned from the former to the latter.
Well is a sell signal - from my indicators - which has me taking a cautiously stance on the long side here.
I'm in the camp that gold has more work to do on the downside before we get a very large rally. Maybe a double bottom. Maybe a smash and grab below the lows that soon reverses. 1150-1600 is my best TA guess.
I'm a believer in the demographic cliff problem we face, and technical signs continue to grow here, adding worry that we may be crossing that cliff much sooner than most people think possible. Chart and discussion
The stock market is extremely overbought in the intermediate, short, and long term, with record margin debt and coming off the highest active money manager bullish sentiment reading ever recorded. History shows that that is the recipe seen at important market peaks when trees that try to grow to the sky fall over of their own weight.
Click on link to view charts showing dates and target for Tom DeMark's 1929 crash repeat
Seems like daily is struggling though weekly not not confirming that change. I need to look a little into that, so thanks!
The only element in high risk blow off phases like we are in for this part of the bull/bear cycle is what happens when the bulls fail to hold support on one of the corrective attempts? History says when the bears score a big win, bubble bursts to lead us into major bear misery that includes a recession and financial crises. Cracks are showing up in the current rally, as I lay out this chart and discussion
History shows crashes are about forced selling due to over-leveraged positions being blown away by a surprise break of a support level. Margin debt and investor sentiment shows we are in such a position, so too the position of my bull/bear cycle indicator. I will update that DeMark chart later this week, but it seems to me that today leaves the Dow Industrials in prime position to start the crash phase. The forecast from that chart calls for a rapid descent to the 2011 lows, from where the rally began.
My strategy is based on the NASDAQ, which of course the NASDAQ 100 closely tracks. All the others that I mentioned - which I do every Friday in my newsletter - are intended to give an overview of rally confirmation or non-confirmation. Thus the opening statement in that newsletter showed the NASDAQ remained in buy mode - which it has been since late 2013 - thus no need to add it to the list of the others. Note, also, this is the opinion - trend either in buy mode or sell mode - based on MY trend indicators. RUT and energy remains in sell mode as of today, while the chart I just posted shows semis and summation indexes the lone confirmers of the current rally to new highs for the NASDAQ.
To add to those dangers we have divergence of many leadership groups and new sells from short term indicators, which I laid out in this discussion
My charts show Tom DeMark's crash call is probably correct, though looking for a bounce here over the next week or so. Click here to view charts
Could be that shallow, though more like gotta have some serious pain this time around. Here's my TA take at this moment and truth moment -
HMY looks washed out to me!
Nothing matters but the FED, as outlined in this "FED WOW! moment" article
FED very active Thursday as they try to juice Yellen's confirmation. Chart and discussion in this "long but hedged going into Yellen Thursday" article
You will probably get our wish! Read my thoughts on the political impasse in my "Crash Warning Update" article
I think we're looking at 1987 repeat, as I discuss here in "bear starts for real tomorrow"
The problem is trading houses took cheap money and leveraged up to buy assets, such as stocks, mortgage and high yield debt and bonds and now they are getting margin calls as the losses mount. That means they have to sell everything - just look at anything related to yield, including stocks and munis - with the stock market also trapped in this crash scenario. Visit my blog to see my recent articles and view charts on stock market sell signals