Since last Friday April 13th three of the USA’s largest banks including JP Morgan, Citigroup and Bank of America reported RECORD quarterly earnings. Separately, the USA’s two largest brokers reported their earnings for the first quarter of 2018. Morgan Stanley reported record quarterly earnings and Goldman Sachs significantly beat its estimated earnings. Prior to the earnings announcements many of the pundits and analysts had predicted that the reporting of upbeat earnings by the banks and brokers would be the key for market getting back to and eclipsing its all-time highs.
After the shares of each of the five initially opened higher the share prices for all of them fell and closed lower on the day of their earnings releases as compared to their prior day closes. The inability for the shares of the five financial institutions to advance back toward their early 2018, much higher highs further supports the fact that the major indices have seen their all-time highs for the secular bull market that began in 2009. The lackluster performance of the shares of the five is the 11the nail in the 2009’s Bull’s coffin.
The chart below is for the XLF which is the primary ETF that traders utilize to trade the banking and financial services industry. That the XLF has not been able to eclipse its previous all-time high in 2007 is telling.
The 11th nail further increases the probability that the market will not get back to its January 2018 all-time high for at least eight years and makes it more likely that the new secular bear market was born in January 2018. See my See my February 2018, article “Bull DEAD, BEAR DOB 1/31/18: Expect Stock Market Decline of at Least 50%”. The video below provides details about the secular bull and secular bear markets that have occurred since 1802 and why they all of had minimum durations of eight years.
For those who want to remain in the markets until the significant correction begins or who wish to profit from trading the S&P 500’s triple leveraged short (SPXS) and long (SPXL) ETFs a subscription to the Bull & Bear Tracker is recommended. The Bull & Bear Tracker has a proprietary algorithm which tracks the market. For information about the Dollar/Yen which powers the Bull & Bear Tracker go to https://bullsnbears.com/yen-sp-500/. To subscribe go to www.bullbeartracker.com.
Disclaimer. Mr. Markowski’s predictions are frequently ahead of the curve. The September 2007 predictions that appeared in his EquitiesMagazine.com column stated that share-price collapses of the five major brokers, including Lehman and Bear Stearns, were imminent. While accurate, they proved to be premature. For this reason he had to advise readers to get out a second time in his January 2008 column entitled “Brokerages and the Sub-Prime Crash”. His third and final warning to get out, and stay out, occurred in October of 2008 after Lehman had filed for bankruptcy. In that article “The Carnage for Financials Isn’t Over” he reiterated that share prices for Goldman and Morgan Stanley were too high. By the end of November 2008, the share prices of both had fallen by an additional 60% and 70%, respectively — new all-time lows.