The end of the Obama Trump Great Bull Market

[DarterBlue]

Ecclesiastes 3:1-8

To every thing there is a season, and a time to every purpose under the heaven:

A time to be born, a time to die; a time to plant, and a time to pluck up that which is planted; A time to kill, and a time to heal; a time to break down, and a time to build up; A time to weep, and a time to laugh; a time to mourn, and a time to dance; A time to cast away stones, and a time to gather stones together; a time to embrace, and a time to refrain from embracing; A time to get, and a time to lose; a time to keep, and a time to cast away; A time to rend, and a time to sew; a time to keep silence, and a time to speak; A time to love, and a time to hate; A time of war, and a time of peace.

 

Where do we stand? I firmly believe we have now seen the end of one of the greatest bull markets in American history. Since the end of August, the leading NASDAQ and Russell indices have lagged. While the DOW and S&P registered several new all time highs in September, both NASDAQ indices and the Russell failed to do so. In fact, the Russell lost over 5% from its late August all time high. When leading indices get into trouble, it does not bode well for the market. On the day today, we were down another $2,958 as CRM and GRUB got badly beat up. The time has come to recognize this for what it is: the market has probably made its second major top for 2018.

The first top was registered back in late January and I was one day off in calling it. This top was probably put in, for all practical purposes, at the end of August despite the lagging S&P and DOW recording all time highs in September. Given the age of this bull market and its obvious overvaluation, the odds favor a substantial, nasty pullback from here. With that said, unless there is strong, positive action at the open tomorrow, I will liquidate all of my positions (GRUB, CRM and FND) with the exception of MPX. Why not MPX, too? Because it is largely uncorrelated with the market. In other words, it has a Beta very close to zero and will probably rise or fall based on its own merits. Given its recent action, I believe that it will rise.

Obviously, things are not playing out the way I would have liked since I have been long this aged bull. But I am a realist and the odds do not favor being long currently. Should I prove right, I will be looking for good shorting opportunities (indices or individual issues) over the next several days and weeks.

[ohio]

Russell and NASDAQ are pulling back and some of the high flyers are giving back their record gains.  Now the question is will they continue to do so?  I'm thinking that the earnings season will dictate which way they go, but even then investors may not care.  If the big NASDAQ stocks like AMZN, MSFT, AAPL, GOOG, NFLX.... beat estimates there could be another bump for the index but it may not last long.  The smaller stocks in the Russell might go down no matter what the earnings do.

Foreign markets can also determine which way our markets go.  For instance FTSE, CAC, DAX, HSI and SSE are lower now than they were a year ago.  Though, NIKKEI is higher.  But if these trends continue to go down they could impact the US markets as well.

Now if there is a combo threat of weak earnings, tariff fears, interest hikes, foreign market decline, weakness in the broad market, political concerns in November,  then there could be a strong market pullback.  Estimates are around 10 percent, but it could be much more.  Now as for me.

I'm slowly going into cash as well.  Sold ADSK and ETSY this morning.  Only positions that I have are AAPL, PLAY,  and BRKb.  Hated to sell ETSY since I held it since early this year and was hoping to hold on to it to realize a long term capital gain.  But it is slowly giving back its gains. Will be playing more biggest gainers, ETF bears, and trend stocks like pot in the next several weeks.

Also, will be jumping back into earnings, but won't hold for long no matter how much a stock beats earnings. Learned that lesson with WMT recently.

Hope GRUB, CRM, and FND make a bounce up before you sell.  As far MPX goes, it  breaks out of the 23 to 24 range, then expect it to continue an upward path. What could cause a breakout on MPX is an earnings beat later this month.

[DarterBlue]

Sold GRUB, FND and CRM at varying prices over the ten minute period from 9:55 to 10:05 am. Am now solely in MPX. The market gave me some cover to cover and perhaps I could have gotten better prices; however, if I am right about the trend shift, those differences are trivial. 

[DarterBlue]

So I am now down to 1,821 shares of MPX to my name. 

With the sales today the results were:

GRUB - net profit of 12,100 or approximately 34%

CRM - net profit of 5,780 or approximately 15%

FND - net loss of a humongous 15,420 or approximately 38%. My dire performance on this one is solely due to my indiscipline as I should have sold it the moment it broke $35. So the last $6.50 points (well over $5,000) are on me. Sometimes you have to relearn lessons for them to stick in your head. I can think of no better teacher than the pain of unnecessary losses. 

MPX has an unrealized gain after today's bad performance of approximately 7%. The goal is to try and hold it till its earnings release date of October 24. However, if it breaks 20.50 on a closing basis before that, I will sell it. 

Today's action was not very comforting coming on the back of very oversold conditions. The market clearly is in big trouble and my feeling is we have seen the all time highs for this cycle. When a bear market begins no one can really forecast its duration or its magnitude. However, the degree of overvaluation can say a lot about the risk associated with really large losses. By my measures, this market is the second or third most overvalued market in the past 125 years. So we will see.

My current intention is to look for a good opportunity to buy long dated put options (LEAPS) on select indices. However, if I am wrong about this being the top, then I will evaluate whether it makes sense to go long again given what I consider unfavorable headwinds.

Regarding MPX, the current goal is to try and hold it at least through its earnings report in two weeks. 

For the record, my rather dour forecast on the market's outlook is not influenced by politics. In fact DJT probably kept this bull alive for at least one final leg with his tax cuts. Rather, my view is based solely on deteriorating technical action coupled with what I considered to be extreme valuations and an old, very old, bull market. 

[ohio]

With stocks like FND, I like to sell them quickly with a very tight stop loss.  Or sometimes I get rid of them as soon as I hear bad news, like I did with CPRT and ORCL.  I can always find another stock that is trending up. 

Hopefully MPX breaks 24 and beats earnings.

Will be looking at UVXY and QID today if the market starts falling. SVXY if it starts to go up.  Also looking at biggest gainers like NVCN(FDA approval) , NBEV, NIO, and IGT, but only as a day trade.  Also keeping an eye on PYX, if it drops enough.  Risky possible plays, but I plan to get out quick either way.

[ohio]

Sold PLAY.

Bought UVXY and TVIX, 

Russell below 200 day moving average.

[ohio]

Added UVXY and TVIX now total of 800 each.  Still have cash for more, but have to be careful.

[DarterBlue]

1 minute ago, ohio said:

Added UVXY and TVIX now total of 800 each.  Can't talk. 

Both leveraged volatility trades. Good luck with them. Just make sure you don't overstay as these are very volatile vehicles! 

[ohio]

3 minutes ago, DarterBlue said:

Both leveraged volatility trades. Good luck with them. Just make sure you don't overstay as these are very volatile vehicles! 

Watching them now. CNBC anchors looking nervous.  Good sign for lower market down trend

[DarterBlue]

1 minute ago, ohio said:

Watching them now. CNBC anchors looking nervous.  Good sign for lower market down trend

The thing is, we could easily get a crash. In the months of August and September, I took a gig assisting with the audits of several Florida Charter Schools. I was shocked and amazed to see what some of their investment portfolios were in. Not only were they in options funds and leveraged short/long funds, but one of them was on 40% margin. 

To my way of thinking not only was the above reckless in the extreme, but it probably violated Florida statutes. The person I was working for did not seem overly concerned. So since it was not my signature on the audits I let it slide. But the bigger point is this: If Charter Schools were playing the market this recklessly, who knows that the hell else is out there!!

[ohio]

Sold TVIX and UVXY.

[DarterBlue]

Just now, ohio said:

Sold TVIX and UVXY.

Hopefully they paid off nicely. Now that I finished the project I mentioned above, I have the time to be more nimble which you have to be to profit from bad markets!

[ohio]

3 hours ago, DarterBlue said:

The thing is, we could easily get a crash. In the months of August and September, I took a gig assisting with the audits of several Florida Charter Schools. I was shocked and amazed to see what some of their investment portfolios were in. Not only were they in options funds and leveraged short/long funds, but one of them was on 40% margin. 

To my way of thinking not only was the above reckless in the extreme, but it probably violated Florida statutes. The person I was working for did not seem overly concerned. So since it was not my signature on the audits I let it slide. But the bigger point is this: If Charter Schools were playing the market this recklessly, who knows that the hell else is out there!!

For today bought 800 shares of UVXY  at average price of 43.68 and sold at ave. of 45.13.  Bought 800 shares of  TVIX of 32.89 and sold at average of 34.12.  Might jump back in afternoon if market starts to fall again.

Bought 2000 of NVCN at 3.34, looks like it is flattening.  Might go up.  

EDIT  bought 1000 more NVCN at 3.08 for average of 3.252.

EDIT  sold all 3000 shares of NVCN at 3.16 for a loss.  Thought it would rebound on the news, but on a day like this it probably won't happen.  Going for a walk then to work.

[ohio]

14 minutes ago, DarterBlue said:

The thing is, we could easily get a crash. In the months of August and September, I took a gig assisting with the audits of several Florida Charter Schools. I was shocked and amazed to see what some of their investment portfolios were in. Not only were they in options funds and leveraged short/long funds, but one of them was on 40% margin. 

To my way of thinking not only was the above reckless in the extreme, but it probably violated Florida statutes. The person I was working for did not seem overly concerned. So since it was not my signature on the audits I let it slide. But the bigger point is this: If Charter Schools were playing the market this recklessly, who knows that the hell else is out there!!

  It's risky for the schools to be leveraged and trading like that.  But if they got out, they probably done well.  They could be in legal trouble, if they did violate the statutes.  When markets are in all time highs, even Grandma takes money from under her mattress and puts it in the market. 

[ohio]

24 minutes ago, DarterBlue said:

Hopefully they paid off nicely. Now that I finished the project I mentioned above, I have the time to be more nimble which you have to be to profit from bad markets!

Yes, you have to be nimble in this market. 

 Have a suspicious feeling I sold my shorts too quick.  Still got enough cash open to jump in.

[DarterBlue]

3 hours ago, ohio said:

EDIT  sold all 3000 shares of NVCN at 3.16 for a loss.  Thought it would rebound on the news, but on a day like this it probably won't happen.  Going for a walk then to work.

Good God! This stock has plunged from over 600 three years ago and from its year high of over 180. Are they a phama with a failed drug tests or something like that?

[ohio]

1 hour ago, DarterBlue said:

Good God! This stock has plunged from over 600 three years ago and from its year high of over 180. Are they a phama with a failed drug tests or something like that?

Came back from the walk.

Usually I can catch these biggest gainers in the morning, but this one just kept on going down.  The best time to jump into these types of stocks is in the opening bell or premarket if the are heading up, but you got to sell them before the days close.  Have tomorrow off, so I should be able to look at the market tomorrow.

 Missed out on the ETF shorts.  Maybe shouldn't taken the walk.  About to head out the door

[HSFBfan]

People it's ok. The dow is at what 26000 or so. It's ok. If the dow drops back to 15000 let me know 

[noonereal]

29 minutes ago, HSFBfan said:

People it's ok. The dow is at what 26000 or so. It's ok. If the dow drops back to 15000 let me know 

Point is, it has not grown the entire year.

Yet we hear it's the greatest economy ever.

[HSFBfan]

Just now, noonereal said:

Point is, it has not grown the entire year.

Yet we hear it's the greatest economy ever.

When was the last time it was 26900 other than this year. Answer is it's never been. Actually its hit a record high 103 times since inauguration day

[noonereal]

1 minute ago, HSFBfan said:

When was the last time it was 26900 other than this year. Answer is it's never been. Actually its hit a record high 103 times since inauguration day

Kid, it came in at that level. It has NOT GROWN. 

Why is this so hard for you? 

 

[zulu1128]

27 minutes ago, noonereal said:

Kid, it came in at that level. It has NOT GROWN. 

Why is this so hard for you? 

 

DJIA was 19,827 on Inauguration day. It closed today at 25, 598. It's up almost 30% in 21 months. In the 36 months prior to 1/2/17, it only grew 21%.

Also, it's currently up 3.6% since 1/1/18. Hence, it's clearly grown this year as well...at least thus far. 

 

[noonereal]

10 minutes ago, zulu1128 said:

DJIA was 19,827 on Inauguration day. It closed today at 25, 598. It's up almost 30% in 21 months. In the 36 months prior to 1/2/17, it only grew 21%.

Also, it's currently up 3.6% since 1/1/18. Hence, it's clearly grown this year as well...at least thus far. 

 

On January 26th the market hit a high. It closed today 200 points below. 

 

[DarterBlue]

1 hour ago, HSFBfan said:

People it's ok. The dow is at what 26000 or so. It's ok. If the dow drops back to 15000 let me know 

Actually, it's not okay. We have put in the second massive top in stocks this year. The averages survived the first and went on to make new all time, highs. From where I stand, it will not survive this second top. I don't know where the final bottom will be put in. But I am pretty sure we have hit cycle highs in August for the NASDAQ, Russell and Mid Cap 400, and in September for the DOW and S&P (the DOW actually made its final high October 2 but the point is the same). From here, I expect us to embark on a big bear market. Unfortunately, like the weather, stocks seem to have become more erratic in the 21st century. Can't blame this on global warming but the reason is probably the massive deregulation of the financial markets which begun in earnest under Bill Clinton and continued under Bush II and OBAMA and now Trump. All this despite the public taxpayers having to bail out many of these institutions that would have and probably should have failed. 

Before this is all played out, many of you will have taken severe losses. Hope you take evasive action, but like many Floridians in the Panhandle you probably won't.

[HSFBfan]

4 minutes ago, DarterBlue said:

Actually, it's not okay. We have put in the second massive top in stocks this year. The averages survived the first and went on to make new all time, highs. From where I stand, it will not survive this second top. I don't know where the final bottom will be put in. But I am pretty sure we have hit cycle highs in August for the NASDAQ, Russell and Mid Cap 400, and in September for the DOW and S&P (the DOW actually made its final high October 2 but the point is the same). From here, I expect us to embark on a big bear market. Unfortunately, like the weather, stocks seem to have become more erratic in the 21st century. Can't blame this on global warming but the reason is probably the massive deregulation of the financial markets which begun in earnest under Bill Clinton and continued under Bush II and OBAMA and now Trump. All this despite the public taxpayers having to bail out many of these institutions that would have and probably should have failed. 

Before this is all played out, many of you will have taken severe losses. Hope you take evasive action, but like many Floridians in the Panhandle you probably won't.

Dude it's at 25900 or so. It's fine. If it dropped another 4000 points back to 21000 it's ok. Will people lose value in it sure. But alot of people who are young enough will buy back in at the bottom and it will go back up. Its correction time you know that. It was a beautiful ride up to 26900. I thought it was hit 27000. It didnt. I'm sure it won't be at 8000 again.