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Michael Clark
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Michael J. Clark was born and raised in Sinclair, Wyoming. He is a poet, novelist, artist, historian, and market analyst. His fine arts portfolio can be found at the following address: http://www.hoalantrangallery.com/MJC2.htm His writing portfolio can be found at:... More
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Clark's Gate Timing System ©
  • MARKET ROUT BEGINNING: STILL TIME TO GET OUT 9 comments
    Oct 24, 2012 7:04 AM

    I have been writing for the last 10 days that it's time to take profits and get out of the markets. Although the market is NOW short-term oversold, the trends are broken, so buying the dip no longer makes sense.

    This is still a selling opportunity.

    I have been watching the small drama of the SPX Index (S&P 500, GSPC) in terms of my proprietary CGTS indicator. Once the CGTS indicator trend goes negative it usually does not reverse itself until the trend is played out. GSPC has gone negative; NDX has gone negative.

    Today I will demonstrate all the issues that have gone or are going negative. Also the VIX has gone positive. And inverse ETFs (the ones that make money when stocks and indexes go down) are going positive.

    Let's look at some charts:

    (click to enlarge)

    (click to enlarge)

    I just bought December SPX puts for this reason.

    The NDX, Nasdaq Index (Tech Stocks), has led the collapse, as bellwether stocks IBM, MSFT, INTC, GOOGLE, all disappointed with earnings and projections for future earnings.

    (click to enlarge)

    I mentioned that inverse ETFs are bottoming. Let's look at SIJ, an inverse Industrial Stock ETF:

    (click to enlarge)

    I wrote earlier that gold issues seemed to be holding up well. I'm not so sure about that now. But the US Dollar seems to be turning around, which promises to be bad for US Stocks and for Gold. Also, US TBond yields are poised to continue their rise -- i.e., interest rates are going up. No wonder Ben Bernanke is talking about retiring. His reign as Fed Chair will be judged by history as a total catastrophe. We still need to sell all the bad assets in the Fed's holdings which the Fed bought because no one else wanted them. This will drive interest rates up even higher.

    Japan reported yesterday that they were going to protect their exports by driving their currency down -- after announcing trade numbers were the worst in 30 years.

    (click to enlarge)

    (click to enlarge)

    Everyone who wants to fix the global economies problems needs to read the following article from AEP at the Telegraph about the IMF's radical plan to conjure away the world's debt and get rid of the world's bankers. Worth a read:

    www.telegraph.co.uk/finance/comment/9623...

    Also, another good read on the same page about the IMF's concerns about the depth of this global recession:

    www.telegraph.co.uk/finance/economics/95...

    For the bulls reading this instablog, such articles won't have much effect, I know. Here are some pictures of commodity ETFs that do show bearish implications of the collapse of the global economy, a collapse that has just really begun. The High Days of 2006 are over for another 36 years -- they won't be coming back.

    (click to enlarge)(click to enlarge)

    (click to enlarge)

    Here are stocks/ETFs we are trading now -- all on the short side of the markets.

    (click to enlarge)

    (click to enlarge)

    (click to enlarge)

    (click to enlarge)

    (click to enlarge)

    I can't say that it is American stocks that are ready to give back gains. Most foreign ETFs also look like trouble. For example, here's PLND, the Poland Stock ETF.

    (click to enlarge)

    Anyone who believes that America's housing market is fixed needs to have their head(s) examined. The rally in housing stocks is irrational, and is doomed to falter; housing prices are doomed to turn back down again and make a new low and bottom and lay on the bottom for many years, in 2019. The go-go days are over, not matter what we are told by the media, no matter how much energy and money speculators are throwing into the market, trying to generate their glory days once again. The glory days are gone.

    We're waiting for housing stocks to give us clear signals of topping. The chart below of TOL, Toll Brothers, shows that the rally in housing stocks is sputtering now. We're only watching at this point, ready to jump in on the short side -- not jumping yet.

    (click to enlarge)

    2010-2019 is the DEFLATION SEASON of the Economic calendar. 2001-2010 was the DISINFLATION SEASON, the season of Summer-Autumn, Harvest essentially, during which time monetary policy is used in a totally ineffective way to impede the deflation of the world's assets. But now we all know that pumping money into the Black Hole will not work. Now we need to face the Devil.

    Interesting times.

    Best to all,

    Michael J. Clark

    CGTS, Hanoi, Vietnam

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Comments (9)
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  • FortSumter
    , contributor
    Comments (44) | Send Message
     
    Thanks for the info. I agree with your thesis. Here in Florida the housing market is anything but fixed. Still many half developed neighborhoods growing nothing but weeds. Only apartments taking off. Resale for existing homes improving but foreclosures still sky high. Nothing down here to support to huge gains in housing related stocks. That said, remodeling is doing well. So if I was to play a proxy I might look at HD, MAS or USG type stocks.

     

    Agree with you on tech. I got out of EMC and INTC earlier in the year at the highs and am glad I did.

     

    At this point I'm 75% cash because I'm not sure what to do. Was buy and hold for the last 30 years and got sick of drops and having to wait for 5 years until it came back (ala INTC or GE). Been trying to become a swing/options trader of the last year with limited success. :( Not as easy as it seemed on paper.

     

    Thanks again.
    24 Oct 2012, 07:44 AM Reply Like
  • Michael Clark
    , contributor
    Comments (8657) | Send Message
     
    Author’s reply » Thanks for your note. We're still prisoners of Hype. We'll know when we bottom is housing. No one will want to talk about housing and no one will care about it -- as long as its being played by the specualtors, then it is a rally in a Bear Market.
    24 Oct 2012, 08:57 AM Reply Like
  • Tack
    , contributor
    Comments (13200) | Send Message
     
    MC:

     

    That you seem so detached from reality about what's really going on in housing markets here might be explained by your perch from Hanoi. At least, I'd like to think so.
    24 Oct 2012, 09:16 AM Reply Like
  • Michael Clark
    , contributor
    Comments (8657) | Send Message
     
    Author’s reply » HUGE mountain of debt to work off Tack. Jobs stil disappearing. Europe crashing. A lot of questions about China. Japan has its worst trade numbers in 30 years.

     

    Housing is being fused by spectulators trying to get the bubble machine going again. It won't work.

     

    Here in Hanoi the story is the bubble has popped. RE dead in the water after years of bubblemania. Same in China. Same in Spain. Same in Ireland, Frnace, England, Italy.... Australia and Canada about to join the debt-bubble sorrow parade.

     

    Time will tell, Tack. You have to remember that God has told me directly that the housing market won't bottom until 2019.
    MJC
    24 Oct 2012, 01:24 PM Reply Like
  • Tack
    , contributor
    Comments (13200) | Send Message
     
    MC:

     

    No sense arguing this because you're just too far way to have any real idea what you're talking about, except through your personal relationship with God, which I must admit is impressive.

     

    Housing hasn't been driven by speculators since very early in the reovery, when they were snapping up stuff cheap for cash. Now, the home market has advanced consistently for two years in volume, and prices are advancing nicely, too.
    24 Oct 2012, 01:42 PM Reply Like
  • Michael Clark
    , contributor
    Comments (8657) | Send Message
     
    Author’s reply » I've read maybe 15 articles with this same message:

     

    "Can Flippers Save the Housing Market"?

     

    http://on-msn.com/QXNKsU

     

    We will know housing has bottom when there are no more flippers.
    24 Oct 2012, 01:47 PM Reply Like
  • Michael Clark
    , contributor
    Comments (8657) | Send Message
     
    Author’s reply » Tack:

     

    Maybe you might enjoy this article:

     

    http://bit.ly/Rj05LJ

     

    This writer does not live in Hanoi and is writer from his perspective in America. So your suggestion that only someone out of touch (physically and in other ways) would doubt the reality of the housing recovery in America does not follow really.

     

    The rally in housing is like the rally we see in stocks during a bear market. And attempted recovery, followed by lower lows. The Case-Schiller chart in the article shows very clearly a market in a consolidation pattern that is going MUCH lower. Price will go down below the 1995 lows.

     

    Of course, that is just an opinion.

     

    MJC
    25 Oct 2012, 03:41 PM Reply Like
  • Tack
    , contributor
    Comments (13200) | Send Message
     
    MC:

     

    No need to attach a disclaimer. It rather diminishes your opinion. Might as well let it stand out there, as it is.

     

    Hoousing numbers keep getting better each report. Worse than anybody who might have missed a play on homebuilders will be those propective homebuyers that don't buy a house because they "just knew" they were going lower.
    25 Oct 2012, 04:04 PM Reply Like
  • mushin
    , contributor
    Comments (28) | Send Message
     
    Good article that appears to tell it like it is. Of course only time is the real judge...
    24 Oct 2012, 11:58 AM Reply Like
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