Yeh, I said I’d get to Point 2 about knowing what to buy. That can wait. The idea of buying in this market just isn’t making any sense to me.
What is really needed right now though, is knowing what to watch! Gosh, where to begin?
1.) Start with High-Yield Bonds and symbol HYG with a 50-day and 200-day moving average. Chart at least a year. They show lack of faith in our economic strength.
2.) Go to our own 7 to 10-year Treasuries next. Symbol IEF works here; and same deal 2 moving averages, and at least a year of data. They are showing a flight to safety.
3.) Have you seen gold just lately? It may be pulling back a bit just now, but expect it to continue to rise. Symbols like GLD, or funds worth owning, like GDX, GDXJ, RGLD, SGDM, FNV. Look at silver with SLV, and maybe acquire some SLW. Treasuries and gold… that’s a flight to safety.
4.) Check financials with XLF, but even more so with specific companies from around the world, with symbols like AXP, BAC, C, CS, DB, GS, HSBC, MS and WFC. What is WRONG with all of them?!?!? Tons of bad debt, and no profits with low, to no, interest rates.
5.) Or, how ’bout world stock markets? I was asked to give symbols. I’ve got some 32 of them. Ready? ECH, EDEN, EIS, EPU, ERUS, EWA, EWC, EWD, EWG, EWH, EWI, EWJ, EWK, EWL, EWM, EWN, EWO, EWP, EWQ, EWS, EWT, EWU, EWW, EWY, EWZ, EZA, FXI, ICOL, INDA, MCHI, THD and TUR. You could use IEV or FEZ for all of Europe. Now, go ahead… find one in a Bull Market. There are none! Use at least 1 year of data.
6.) If you can find data anywhere, learn what analysts have been doing with our U.S. stocks earnings estimates for 12-months out. I’ll tell you right now. I’m not seeing them being revised upward. Not yet. All I’ve seen is cuts to all of the 500 by 8.24%, so far, just here in ’16, and the P/E on the latest estimate is 19.45!
7.) Keep your eye on OIL. I have a great site for a daily column on it. A British publication called The Week. Appears to be an excellent source! Right here: http://www.theweek.co.uk/ Click on ‘News’ in the tool bar, then ‘Oil Price’, for the very latest daily column. Oil is moving the markets right now, and however it ever actually goes, is how the economies and finances of all the world are going to go. Too cheap oil will kill us, and only were it to rise to at least $45, for the WTIC, can we hope to be saved. There is a massive debt-bomb that is going off, while oil is too low! I’m reading of no news that says oil can possibly rise to that minimum $45 threshold; not yet.
8.) Commodities. The most basic materials in the world. Prices can go too low. They signal deflation when they continue to drop. Look at symbols like DBC, GSG and GSP. They all look alike… They keep going like they are, and they will be saying ‘Depression’!
9.) Central Bank Interest Rate Policies. All over Europe, and now in Japan… central bankers are actually reverting to negative interest rates! Janet Yellen was asked about them during her last testimony before Congress only last month… she said that there has been some discussion of that among them.
My friends, I am not an alarmist. I have always been the optimistic type; saw that our stock market was not acting ‘right’ in January, and started digging. That’s when I discovered all this. We’re looking out over the edge of a precipice, and we look to be about to fall off a cliff. All of the ‘feel good’ news about oil presently driving the price higher… I can find NO fundamental reason to believe any of it. And, if anything, think that it is all a bunch of bunk, and that the die truly already has been cast. Time will tell, and I can’t imagine that it will take too terribly long, as the price moves and chart patterns of everything I have listed above seem to all be saying the very same thing… and, that is, that all the world would appear to be presently headed for ‘hell in a hand-basket’. If anyone can look at all I just listed above, and make a better case for it. I’m ever-ready to hear another interpretation. Any takers? There are no prizes, sorry.
Lastly, our stock markets are all reaching for their down-trending 200-day moving average lines. Historically, when Bear Markets start; their failure to penetrate, and rise above their 200-day has been the final confirmation that the Bear has emerged from hibernation, and is hungry to feed on investors’ capital. Outside of the U.S., he has consumed trillion$ already!!! I don’t believe he’s near full yet.
This is pertinent from yesterday’s WSJ, published about 3:00 pm EST. Title: Number of Troubled Companies Nears 2009 Peak. Here:http://blogs.wsj.com/moneybeat/2016/03/03/number-of-troubled-companies-nears-2009-peak/ But, donchuworry!
Just found this interesting Bloomberg article filed 12 hours ago… http://www.msn.com/en-us/money/markets/gold-snaps-back-to-bull-market-as-prices-surge-on-haven-demand/ar-BBqjs8G Pay special attention to the economic news in the 4th paragraph.
My above link to the Bloomberg article doesn’t want to work anymore. But oil’s up again this morning. Asia closed up. Europe’s doing well, and our futures have a nice little bump in them. Oil’s up .5% at $34.75… to all of which I can only say, “Hope springs eternal!” Where’s the evidence any real world-wide slow-down in oil production, or any new serious demand is coming into the market to cause this 34% increase in the price of oil?!?!?
Here’s to your successful investing,
Harold F Crowell