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I am not an investment professional. I do not engage in stock or currency trading. I am a blogger and investor who believes currency deflation has created an investment demand for gold, and that gold bullion is the sole means of wealth preservation. The chart of gold, $GOLD, reveals that with... More
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  • A Crisis Of Trust Has Pivoted The Stock Market From A Bull Market To A Bear Market 0 comments
    Jan 21, 2014 4:56 PM | about stocks: GLD, SLV, C, XRT, CHIX, VT, EFA, IXG, EEM, TLT, OFF, IWC, GREK, EZU, EUFN, DFE, UUP, FXE, DBV, CEW, JNK, LQD, XVZ, STPP, HDGE, JGBS, EUO, UDN

    I) ... Eighteen indicators suggest that a stock market top has been achieved

    1) ... Volatility, ^VIX, and its ETFs, TVIX, VIXY, VIXM, XVZ, are trading higher.

    2) ... The trade lower in Junk Bonds relative to Corporate Bonds, JNK:LQD, that commenced January 2, 2014, communicates that high yield spreads turned up from a six year low at the beginning of 2014. Bespoke Investment Group writes "When spreads are rising it indicates that investors are demanding more yield in order to take on the added risk of the issuers, while falling spreads indicate that investors are comfortable taking on the added risk."

    Thus with rising spread, seen in Junk Bonds, JNK, falling faster than Corporate Bonds, LQD, investors are derisking out of the stocks that have risen the most under QEternity. Derisking and deleveraging is the genesis of Risk-off, OFF, investing, which commenced January 2, 2014. Risk appetite has finally turned decisively to risk avoidance, and the bull market has turned to become a bear market.

    Applying Global ZIRP, that is applying Infinity, to Treasury Debt, TLT, and Mortgage Backed Bonds, MBB, resulted in a crack up boom in credit based risk assets investments, the leader of which US Small Cap Blend Stocks, IWC, which has now topped out.

    3) ... All of the Consumer Spending ETFs, ITB, IHF, DEF, RXI, IYC, FDN, KXI PBJ, XRT, are being led lower by Retail, XRT, as is seen in their combined Yahoo Finance Chart, together with World Stocks, VT. Investment deflation has hit retailers, these along with financial stocks are the foundation for risk-on, or risk-off investing; their trade lower communicates that the entire stock market will be turning lower.

    4) ... Citigroup, C, and Chinese Financials, CHIX, are leading other Financial ETFs, FEFN, EMFN, EUFN, RWW, IXG, KRE, KCE, IAI, lower, as is seen in their combined Yahoo Finance Chart. The

    chart of Suntrust Banks, STI, manifested an evening star candlestick pattern.

    5) ... The 22% spread between Growth ETFs, TAN, IBB, PJP, XTN, RZG, and Consumer ETFs, RXI, IYC, PBS, XRT, IX, as is seen in their combined Yahoo Finance Chart, with Retail Stocks, XRT, leading lower, shows peak risk investing has been attained.

    6) ... Automobiles, CARZ, and Ford, F, has attained its previous high, and is trading lower; General Motors, GM, has been trading lower from its rally high.

    7) ... There has been a trade lower in Steel, SLX, though the middle of a broadening top pattern, suggesting ongoing trades lower.

    8) ... Timber Producers, CUT, are trading lower; and related Paper Producers, WOOD, are trading lower from a double top high.

    9) ... Most of the Railroads, UNP, KSU, CNI, CSX, NSC, CP, are trading lower, and starting to pull Transports, XTN, down, as is seen in their combined Yahoo Finance Chart.

    10) ... Creditor Mastercard, MA, is trading lower.

    11) ... All Yield Bearing ETFs are now trading lower; Shipping, SEA, Global Telecom, IST, Dividend Growth, and Dividends Excluding Financials, DTN, appear topped out.

    12) ... Business Service leader, Envestnet, ENV, innovator publisher of Investment Management Products, has topped out.

    13) ... Vice Stocks, traded by Fidelity Mutual Funds, VICEX, and Casinos and Resorts, BJK, have likely topped out.

    14) ... The market vane ETF Clean Energy, PBD, is trading lower from its rally high.

    15) ... The US Dollar, $USD, UUP, is trading up to strong resistance; and this is coupled with a trade lower in Major World Currencies, DBV, such as the Euro, FXE, and Emerging Market Currencies, CEW, suggesting currency fatigue.

    16) ... Junk Bonds, JNK, Distressed Investments, FAGIX, Asset Manager, Blackstone, BX, and Leveraged Buyouts, PSP, such as DLPH, appear topped out, and thus are communicating that the debt trade is complete. (The topping out of Junk Bonds, JNK, is communicated in the combined Yahoo Finance chart of HYHG, and PST, TBX, TBT, and JNK)

    17) ... European Financials, EUFN, are being led lower by the National Bank of Greece, NBG, and Banco Santander, SAN, communicating the Euro Yen, EUR/JPY, carry trade is complete.

    18) ... The nascent trade higher in most of the inverse market vane ETFs, STPP, HDGE, XVZ, JGBS, EUO, SLV, GLD, UDN, as is seen in their ongoing Yahoo Finance Chart, suggests that a bear market has commenced. These ETFs could be used as the basis of a margin account for short selling purposes.

    Day traders may want to consider investing in some of these Proshares 200% Inverse ETFs, BIS, SQQQ, SDD, SSG, EWV, EPV, SCC, SIJ, EEV, and FXP as well as Direxion 300% Inverse ETFs, YANG, TZA, SOXS, SPXS, JPNS, EDZ, KORZ, DPK, TECS, MIDZ.

    II ... A Crisis Of Trust Has Pivoted The Stock Market From A Bull Market To A Bear Market.

    On October 23, 2013, the bond vigilantes, effected a global economic and political coup d'etat in calling the Benchmark Interest Rate, ^TNX, that is the cost of US Treasury Debt, TLT, higher from 2.48%.

    It was formerly the Means of Economic Inflationism. But, with its rise from 2.48%, on October 23, 2013, it commenced the failure of trust in the monetary policies of credit stimulus of the Creature from Jekyll Island, and the economic policies of investment choice of democratic nation states.

    Now, the Interest Rate on the US Ten Year Note, ^TNX, is the Means of Economic Destructionism, and has been establishing economic deflation and economic recession in the emerging markets, EEM, and is terminating economic inflation and economic growth, and thus terminating the paradigm and age of liberalism, and birthing that of authoritarianism, where a beast regime of regional governance and totalitarian collectivism, will rise to rule the world in diktat policies of economic governance in each of the world's ten regions, and in schemes of debt servitude in all of mankind's seven institutions

    Investment fear, that the monetary policies of the world central banks have crossed the rubicon of sound monetary policy, has turned the two spigots of investment liquidity completely off; these being debt trade investing, and currency carry trade investing.

    And in so doing, depowered liberalism's dynamos of economic activity: creditism, corporatism, globalism and clientelism; the new normal is OFF not ON; and now regionalism is the singular dynamo of economic activity under authoritarianism.

    Now that greed has turned to fear, the tail risk of Global ZIRP will be economic deflation and economic recession, and these will literally explode, as black swan events emerge seemingly out of nowhere.

    On the week ending January 17, 2014, all of the Consumer Spending ETFs, ITB, IHF, DEF, RXI, IYC, FDN, KXI PBJ, XRT, were led lower by Retail, XRT, as is seen in their combined Yahoo Finance Chart, together with World Stocks, VT. Investment deflation has hit retailers, these along with financial stocks are the foundation for risk-on, or risk-off investing; their trade lower communicates that the entire stock market is turning lower.

    And on the week ending January 17, 2014, Reuters reported Bond trading stings Citigroup in 4th quarter. and the Global Financials IXG, PIVOTED lower, as The Too Big To Fail Banks, RWW, were led lower by Citigroup, C. Regional Banks, KRE, were led lower by the Top Performing Regional Banks, HBAN, SNV, FIBK, SIVB, OZRK, GBCI, PACW, FFIN, and UCBI. The European Financials, EUFN, were led lower by the National Bank of Greece, NBG. China Financials, CHIX, Japan's Sumitomo Mitsui, SMFG, South Korea's Shinhan, SHG, the UK Lloyd's Banking, LYG, all traded lower. Insurance company, Prudential, PUK, and ING Groep, ING, led life insurance companies lower.

    While World Stocks, VT, and Nation Investment, EFA, may trade higher, Global Financials, IXG, is trading lower.

    In the new deflationary investment environment, an investment demand for gold, GLD, will emerge. I favor dollar cost averaging into gold bullion and silver bullion, and taking possession of these precious metals and storing them in safe areas.

    Stocks: GLD, SLV, C, XRT, CHIX, VT, EFA, IXG, EEM, TLT, OFF, IWC, GREK, EZU, EUFN, DFE, UUP, FXE, DBV, CEW, JNK, LQD, XVZ, STPP, HDGE, JGBS, EUO, UDN
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