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Market Vulnerable due to Buyback Blackout; Bull & Bear Tracker signal now RED

by | Oct 4, 2018 | alerts, Extra Cat

The signal for the Bull & Bear Tracker is now RED.  A market crash is now underway that will result in October being the worst month for the stock market during the Trump Presidency.  According to a Wall Street Journal September 19, 2018, article “Buyback ‘Blackout’ to Test Stock Market”, 80% of the S&P 500’s companies will be restricted by October 5, 2018, from buying their shares back until they report earnings.  The companies have propped the market up throughout the year by buying back more than $1 Trillion of their shares. Without the companies’ ability to conduct their share buy backs, the market is completely naked and subject to a correction that would make around the world headlines.  To say the market is vulnerable would be an understatement. The Dow Jones Industrial Composite Index closed at its all-time high yesterday, indicating an extremely overbought condition. See my article of yesterday, “Frenzied Market Blow Off Underway”.     

I recommend that all investors sell everything and to effectuate a 90/10 Crash Protection Strategy.  October of 2018 will join the Octobers of 1929, 1987 and 2008 in infamy.

The Bull & Bear Tracker’s signal had been GREEN since August 1, 2018.  See Equities article, ​“Bull & Bear Tracker’s Signal Back to Green”.  The signal switched from GREEN to RED due to the volatility of the US Dollar/Japanese Yen exchange rate increasing over the last 24 hours.           

For the period that the signal had been GREEN, the S&P 500 went from 2813.36 to 2905.45 at 10:30AM today, October 4, 2018.  During the period that the signal was green, the S&P 500 increased by 3%.

The trading vehicle that I recommended to trade the GREEN signal, which is the SPXL, performed significantly better than the S&P 500 and increased by 8.7%.  The SPXL which is a triple leveraged long ETF derivative for the S&P 500, went from $48.93 as of the close on August 1, 2018; to $53.87 on October 4, 2018. This represents an increase of 8.7%.  Now that the signal is RED; the recommended vehicle to trade the Bull & Bear Tracker’s signal is the SPXS, a triple leveraged short ETF derivative for the S&P 500. The SPXS is presently trading for $21.85 per share.  

To learn about Dollar Yen exchange rate volatility being a leading indicator of the direction of S&P 500 and why the potential for a market crash is heightened while a RED signal is in effect go to https://bullsnbears.com/usd-jpy-indicator/.   For more information about the Bull & Bear Tracker and its signals which can be used to go long and short during volatile market conditions go to https://bullsnbears.com/bull-bear-tracker/.   Also, my article “NIRP Crash Indicator Renamed “Bull & Bear Tracker”; Signal Now GREEN” is highly recommended.  

For those investors who do not want to take minimal risk and not be exposed to a potential crash and yet have the potential for their portfolios to be safe and to also grow I am recommending the deployment of a 90/10 Crash Protection Strategy.  For information on the strategy which is the only fail-safe strategy that one can utilize to protect their liquid assets from crashes, recessions and depressions go to https://bullsnbears.com/90-10-crash-protection-strategy/.  

BullsNBears.com is loaded with information about crashes and eleven other research categories listed below.  To receive new articles when they are published sign up for free alerts.

Disclaimer.  Mr. Markowski’s crash 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 warnings were 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.

According to my math the S&P 500 will decline by at least 60% from the current bull market’s peak to the new bear market’s trough.  I am also predicting that it will be 2030 before the S&P 500 is able to eclipse the high- water mark for the bull market which began in 2009.  

To understand my math and also the bear market and recession investing strategies that I am recommending from now through 2030, watch my recently taped two-part interview about the “Day of Reckoning Approaching for the market” which will air on the Fox Business Channel during the second half of October.   A private and pre-screening of my interview is exclusively available to alert subscribers. Click here to subscribe to BullsNBears.com free alerts.   

Below are my most recent must-read articles which pertain to the market being at high risk for a significant correction or a crash: