Posted by
OffThePeak
10 yrs ago
Stock Market Predictions for 2014
/ The previous thread got hijacked by a discussion of bitcoins* - so I started this new one to be devoted to Predictions for 2014 /
(US Stocks):
Stock Market predictions from banks
S&P 500 is now : 1,841.40
Citigroup---------- : 1,900 :
BoA/Merrill Lynch- : 2,000 :
Goldman Sachs -- : 1,900 :
Barclay's Capital-- : 1,900 :
Wells Fargo Secs. : 1850-1900 (1875)
===
> http://economictimes.indiatimes.com/markets/global-markets/predictions-from-market-experts-for-2014/articleshow/28023395.cms
1841 > 1900 - that's +3.2% - not much return, on a market that many say is "toppy"
===
*For discussion of Bitcoin and Gold investing in 2014:
http://hongkong.asiaxpat.com/forums/hong-kong-property/threads/153214/investing-2014:-bitcoins-gold-etc/
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PREPARE For The WORST in 2014:
http://tinyurl.com/2014-Ominous
"All of their forecasts are quite ominous"
Some common themes in the Summary seem to be:
===============
+ A stock market crash, starting in the first half - even Q1
+ It could be worse than 2008-9
+ A risk of US govt insolvency, and a bond crash
+ Even real estate prices "could end badly"
The Crash of 2008 was seen ahead of time by many people.
We are being warned about 2014, and I think we need to take these warnings very seriously.
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Ed
10 yrs ago
I don't like to make predictions ... because they are nothing more than guesses... for the most part what happens to the stock market depends on central bank policy... the economy and the markets move based on what central banks do... there are no fundamentals any longer...
I was made aware of the coming calamity in 2007 in the summer... I received a heads up email regarding pension funds in Scandinavia that were not getting payments from securities they owned involving US mortgage paper... at the time I recalled thinking holy *&^%$$$# this is epic in scale....
And now I think the problems we face are exponentially larger.... part of this is thanks to zero hedge - because I am not relying on the propaganda machine that is the MSM... I have access to raw info with commentary that questions the statements coming out of the central banks and other ministries of truth.... kinda of like a wikileaks for finance news...
And from what I see nothing has been fixed since 07... the same games are being played again - but on vastly larger terms because of the trillions of QE fueled by ZIRP.... the bubbles are many times bigger - they are global - and they are dangerous.
I don't know if 2014 is the year this all crashes - I am amazed they have been able to keep things going this long --- but when it does crash this time I do not think governments can bail this out like in 08... creditors are going to get crushed.... and that ultimately means a deflationary collapse (although there may be a preceding hyperinflationary episode before because as with Japan - when money printing doesnt work - you quadruple down on the same policy - because there is nothing else)
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China Bulls Look to Run : SCMP article: 1/1/14
Bargain shares strategy (that's how China looks now on some charts)
Valuation of China vs. the US, on a PE Basis
Index------ : 2013end : Est.Earnings : P/Eest: 10yr-Ave : Ave.V.13:
======= :
HangSeng- : 23,306.4 : 100.00-2013 : 13.00 : 13.61 -- :
H-shares-- : 10,816.1 : 100.00-2013 : 08.00 : 13.61 -- :
S&P-500-- : 1,846.36 : 100.00-2013 : 17.00 : 16.30 -- :
Shanghai-- : 2,115.98 : 100.00-2013 : 10.00 : 21.20 -- :
======= :
(I am looking for the estimated 2013 earnings figures)
China shares have disappointed investors in 2013
=====
+ The HSI was up a mere 2.9 percent
+ A-shares, tracking the CSI-300 fell by 7.6 percent
+ The S&P-500 index was up 29 percent
+ The Nikkei-225 index was up 57 percent
Problems in China:
+ Slowing growth
+ Rising short term rates, with the 3mos. rate doubling in June-July, and jumping again in Nov.-Dec.
+ Some pundits see more rate spikes ahead in 2014, hurting growth prospects, as China looks to rein in the growth in local government debt
+ Cooling measures have hurt property prices (in HK, and also in China)
+ Sentiment is often driven by property prices
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"As Beijing Moves, Investors Maneuver" - says headline in the Asian WSJ.
Some are concerned about "a potential deluge of IPO's"
After a one-year moratorium, five companies are preparing to launch IPO's.
Debt and credit concerns remain also.
The good sector has been:
"Consumer stocks, such as shares in Internet and media (up 87% in 2013), information technology and social services, which includes travel and health care companies"
The worst areas have been: Mining, construction, and Real Estate.
Foreign investors are now being allowed to access the Chinese markets, by expanding the programs that have existed for them
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Marc Faber's 2014 Predictions
http://www.zerohedge.com/news/2013-12-27/marc-fabers-2014-predictions
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Discounts to NAV:
================== : - Price - : - N.A.V. - : Discount : 2008-disc.
HK-01 / Cheung Kong- : $120.30 : $182.30 : 35 Pct. -- : 34 Pct.
HK-16 / SHK Properties : $ 96.40 : $172.00 : 44 Pct. -- : 55 Pct.
HK-83 / Sino Land------ : $ 10.24 : $ 17.35 : 41 Pct. -- : 64 Pct.
HK-17 / New World----- : $ 09.66 : $ 19.30 : 50 Pct. -- : 72 Pct.
New World : "has 44 percent of its properties in the resilient luxury sector in HK and Kowloon"
(Note: I question some of these assumptions, such as:
the idea that CK is better off with more properties in China.
The China market is vulnerable too !
Tom Holland says: "A healthy China would set interest rates at 10 percent"
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Some Elliottwave guys are getting Bearish here... and Goldmans and George Soros too
> http://investmentwatchblog.com/gregory-mannarino-jpmorgan-george-soros-and-goldman-sachs-are-seeing-something-big-on-the-horizon-we-could-be-weeks-away-from-a-major-market-event-massive-sell-off-here/
Gregory Mannarino: JPMorgan, George Soros And Goldman Sachs Are Seeing Something Big On The Horizon. . . .
We Could Be Weeks Away From A Major Market Event, Massive Sell-off Here
= http://www.youtube.com/watch?v=TezhXekKFZo =
"The effort to push money from the Emerging Markets into the US markets is done... It has played out.
"I am scared..." (he then refers to Elliott Waves)
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(From 137 days ago - How is it working out?):
PREPARE For The WORST in 2014:
http://tinyurl.com/2014-Ominous
"All of their forecasts are quite ominous"
Some common themes in the Summary seem to be:
===============
+ A stock market crash, starting in the first half - even Q1
+ It could be worse than 2008-9
+ A risk of US govt insolvency, and a bond crash
+ Even real estate prices "could end badly"
The Crash of 2008 was seen ahead of time by many people.
We are being warned about 2014, and I think we need to take these warnings very seriously.
===== ===== =====
VERY Long Term Chart, DJIA/INDU:
http://i273.photobucket.com/albums/jj235/jimolsen2/140210US-StockPricessince1789_zps37ab8623.png
INDU since 1987 :
http://i273.photobucket.com/albums/jj235/jimolsen2/INDU_zps1079fe64.gif
SPX since :
http://i273.photobucket.com/albums/jj235/jimolsen2/SPX_zpsceac8039.gif
RUT since : (IWM, is the etf for the Russell-2000 index)
http://i273.photobucket.com/albums/jj235/jimolsen2/Russell2000_zps52ae8531.gif
At the time the thread was started, SPX was about : 1,841
SPX: From end DEC (1848.36), SPX at 1870.85 is up 1.22%
But the other indices, and broader market show something different:
Indu: From end DEC (16,577), Indu at 16,447 is: - 0.78%
XLF : From end DEC ($21.86), XLF at $21.72 is- : - 0.64% = Russell 2000
IWM: From end DEC (115.36), IWM at $108.88 is: - 5.62% = Financials
(UK):
UKX: From end DEC (6749.09), UKX at 6840.80 is up 1.36% = FTSE-100
Here's a podcast, talking about possible market action and politics ahead:
http://www.youtube.com/watch?v=eAbgIaWJpEg
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A UNIFIED RISE - it is rare
What's that? All major asset classes Rose in the First Half:
+ Gold---------------- : up +9.7% : GLD
+ DJ Commodities - : up +8.1% : CRB
+ 10-year T-Notes - : up +6.4% : TLT
+ MSCI World Index : up +4.8% : ???
+ Emerging Mkts.--- : up +4.3% : EEM
+ Dow Jones Aver. - : up +1.7% : INDU
Why?
"Commitment of the Fed and the ECB to keep rates low"
= The Dollar lost Value against ALL these Asset Classes
Apparently, this breeds complacency, and Low VIX ... update
"VIX averaged 13.8 in 1st half... Lowest since 2007"
http://i273.photobucket.com/albums/jj235/jimolsen2/VIX_zpsd5673671.gif
=== ===
How we got here (into THIS political and mess) and where we are going.
John B Wells interviews Two Guys with informed (non-mainstream!) views
Caravan To Midnight - Episode 85 Jim Willie / Dr Paul Craig Roberts
= http://www.youtube.com/watch?v=TVGV3kLqtNI =
JW : "We've got contaminated legal tender" (in the USA)
"We may see gold-backed Chinese Yuan, Russian Ruble, etc."
"100% per annum inflation is coming to the US."
"The US may be forced to have a separate domestic currency."
"The new currency, I call the "shist" dollar" (for sh/te dollar)
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Ed
10 yrs ago
As to be expected when --- as the FT.com revealed --- central banks have propped up the stock markets with $29 trillion dollars
How does the stock market go up when GDP is tanking.... when labour participation (non participation) is at record highs --- when income levels have collapsed 10%?
Here's the answer http://www.zerohedge.com/news/2014-06-15/cluster-central-banks-have-secretly-invested-29-trillion-market
One would expect gold to go up --- because even an 8 yr old could be made to understand that this is a castle of cards --- and that holding gold is perhaps the only way to preserve wealth when this sucker blows.
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ltse
10 yrs ago
Like you said, Â "Central banks have propped up the stock markets with $29 trillion dollars",
so to go against it would be fighting the Fed, and simply arguing with the market, it'll be absurd to short the markets right now given the supportive monetary policies, with tapering the tapering and QE expansion is on the horizon.
Markets moves from low volatility to high volatility then to low volatility and high volatility, and so on in this oscillating cycle, and generally speaking you buy on high volatility and sell on low volatility, that why traders have position themselves with credit spreads to take advantage of IV expansion, hence a big move is expected coming up, my bias would be towards the upside despite the low IV readings, because given the recent GDP disappointment, Janet Yellen would be about to announce more loose accomodative policies.
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Ed
10 yrs ago
Is tapering really happening?
As has been pointed out tiny Belgium has stepped in --- this has the Fed's finger prints all over it http://blogs.marketwatch.com/thetell/2014/04/15/belgium-is-buying-up-tons-of-u-s-treasurys/
And of course as we know - the Fed is manipulating:
- the housing market
- the bond market
- the stock market
What aren't they manipulating?
It seems people are like the proverbial frogs slowly boiling in the pot --- they are taking all of this without the slightest bit of concern... how can this not end in howls of despair and tears?
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ltse
10 yrs ago
What aren't they manipulating?
Why does it matter at all? the point is making money is all that matters, if your so bearish, go pick up so out of the money puts on S&P ETF, people who knew what was coming didn't panic in 07, they got much richer.
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"I don't like to make predictions ... because they are nothing more than guesses... for the most part what happens to the stock market depends on central bank policy... the economy and the markets move based on what central banks do... there are no fundamentals any longer..."
- Ed
You gotta use charts, and cycles, if you want to make useful predictions.
I still think a big drop will come in stocks this year, but the timing of the peak is taking longer than I had earlier exxpected. There was a nice drop in IWM, which I did profit from. But the major Top is not yet in place IMO.
=========
Some people try to predict using "expected events", like the guys beloe.
But I find the charts more reliable that their prediction method:
Caravan To Midnight - Episode 68 W & V
http://www.youtube.com/watch?v=V8otCSAJ4ok
"A major event within the Mid-July Time frame, as Russian move to take back the Ukraine."
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Ed
10 yrs ago
Take the stock market for example --- how do you make a prediction when the primary mover is central banking money?
Fundamentals do not matter at all --- all that matter is when and how much the central banks buy.
29 trillion dollars of central banking money dwarfs all other factors that drive the markets....
That said -- I can make one prediction --- the central banks must continue to play in the markets --- otherwise they will collapse --- so 'don't fight the Fed' --- there is money to be made...
One other prediction --- what cannot go on forever will stop... I don't think the central banks will stop pumping the equity market - they cannot exit nor can they stop piling in --- but at some point this game is going to blow up in their faces...
This is already well beyond the realm of ridiculous.... the only reason it has not blown to pieces already is because the big money is compliant and happy to go along for the ride...
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There's a cycle at work, Ed.
Basically, from Fear to Excessive Greed.
When People are all in, with no fear (like now) - there's only one way it can go - and that's down.
Having said that, there are still some small parts of the "upside drama" to be played out IMo
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Ed
10 yrs ago
Not if the central banks keep pouring in trillions of dollars....
They have the printing presses and they can overwhelm even the biggest institutional money managers....
Don't fight the Fed eh....
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Ed
10 yrs ago
Have a look at the graphs here --- yet the markets keep buoyant http://www.zerohedge.com/news/2014-06-28/crushing-q2-recovery-dream-1-simple-chart
That has to be the Fed's doing --- and the big money is saying --- 'ya, this make no sense and this should crash but the Fed is buying the market so the logical way forward would be to grab onto their coat tails as stay long'
I believe that the central banks have no choice but to remain active --- if the market crashes we will get 2008 on steroids.... and I don't see how they can bail this out again --- they are firing every bullet they have already...
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I like this chart - SPY versus GLD - updated to yesterday
http://i273.photobucket.com/albums/jj235/jimolsen2/FRT_zps81791064.gif
(Note how stocks and Gold first moved on the same path, recovering from GFC lows, and then went into opposite patterns)
A shift back to Gold may have started - suggesting future QE moves might help gold more than stocks.
Here's the guy who has called Stocks as well as anyone has: (Tony Caldaro):
http://caldaro.wordpress.com/2014/06/28/weekend-update-454/
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Ed
10 yrs ago
The Next Global Meltdown Is Baked In: Connecting the Dots Between Oil, Debt, Interest Rates and Risk
The Federal Reserve's zero-interest rate policy (ZIRP) has two purposes:
1. Channel immense sums of free money to the too big to fail banks by relieving them of the onerous requirement of paying interest on deposits while giving them unlimited access to nearly-free money they can lend out at huge spreads. (This is crony-capitalism writ large. The winners were picked by the Fed and the rest of us are the losers. Yea for the godlike Fed, our modern-day Mammon.)
2. To keep consumption alive as income declined and the oil tax eroded household disposable income, the Fed made borrowing cheaper.
So what's a godlike Federal Reserve to do when it can no longer lower interest rates?
Answer: it suppresses visible risk by manipulating the stock market to reflect complacency.
http://charleshughsmith.blogspot.com/2014/06/the-next-global-meltdown-is-baked-in.html
i.e. you print $29 trillion dollars and pump it into the stock market --- the big money understands that this is the strategy and follows along because if you try to fight the Fed and short the market --- you will get your a** burned --- because the Fed can swamp your position by simply printing more trillions --- and driving the stocks higher.
Yes of course this makes no sense --- it is massive manipulation --- it is massive distortion of the market mechanisms.
Now why in the heck would the Fed do this? See point 2. above.... that is the answer... if the Fed does not do these things --- we are done.
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