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Gregory Mannarino's  Instablog

Gregory Mannarino
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I started my financial career working for the securities and trading arm of the now defunct Bear Stearns before thedot-com bubble. I am an active trader of the capital markets. I have published several books pertaining to finance, global economics, and equity trading; My most recent book is... More
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  • Record High Margin Debt With Most Traders Betting Against This Market.

    Its a perfect storm.

    You have market participants who have borrowed to record levels in order to own stocks, totally leveraged up, yet the majority of traders are increasing their bets that this market is going to fall-and soon.

    Below is an options statistics sheet of (NYSEARCA:SPY) SPDR S&P 500 ETF Trust, from today 6-2-15.

    They say a picture is worth a thousand words, well there you have it. Especially interesting is the open interest-clearly and overwhelmingly favoring puts.

    In such an environment as we have now with this market, if things go south those who have leveraged themselves on the long end can and will lose more than their initial investment. People may end up running for the door panic selling-but there may be no buyers.

    This really is a perfect storm...

    Happy Trading!

    Jun 02 6:35 PM | Link | Comment!
  • Proof That The Bull Market In Stocks Is Over.

    A very clear sign that this historic bubble/Federal Reserve induced bull market has ended is here.

    According to DOW theory: if manufacturers profits are rising they will increase production, and If they produce more goods they will have to be shipped to consumers. (To read more about Dow theory click HERE).

    So it follows through that in order to sustain a rising stock market the transports, (which consist of the weighted averages of twenty corporations), must be rising as well.

    If you look at the chart below from today, 5/26/15, you will notice that ticker (NYSEARCA:IYT) iShares Dow Jones Transport Average ETF has broken a sustained upward trend, and has now clearly begun a new downward move. There was a period of consolidation from December 2014 through mid-March 2015 which then broke trend to the downside.

    (click to enlarge)

    As hard as a pill this is to swallow for all those permabulls out there, seeing IS believing.

    Well there it is in the chart above.

    If DOW theory is correct, then we can also expect that the bull market in stocks has indeed ended.

    RELATED VIDEO, Click here: According To DOW Theory The Stock Market Bull Run Is Ending.

    Happy Trading!

    May 26 9:37 PM | Link | 9 Comments
  • Caution Advised: Capital Outflows, Low Volume, Divergences, May Sink This Market.

    With mass capital outflows already working against this market, DOW transports diverging from ever increasing market highs, low trading volume, and a jittery bond market, it is clearly time for caution.

    Does this all mean the market is going to plunge tomorrow?

    Absolutely not.

    However it may just be time to take some cash off the table on the long side, pull profits, and maybe look for get short as well.

    My concern as a trader myself is not just the inordinate low market volume, capital outflows, or even the lagging transports, but it is the divergences between them. Something has to give.

    The already overwhelming distortions which exist in this market across every single asset class being driven by "abnormal" monetary policies by the Federal Reserve, continue to get worse.

    Further, there is no end in sight.

    There are simply too many factors weighing against this market at this time, and it is for this reason that I believe traders continue to take up short positions against this market.

    Below is an options statistics sheet from this past Friday 5-22, the last day the market was open for trading on ticker (NYSEARCA:SPY) SPDR S&P 500 ETF Trust.

    The call to put ratio is favoring puts at better than 2:1

    More importantly is the open interest.

    Price action tends to go in the direction of that interest, and here again puts are heavily favored.

    Happy trading!

    May 25 9:43 PM | Link | 4 Comments
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