Monday, January 5, 2015

10 Warning Signs – 2015 Market Crash Dead Ahead

10 Warning Signs – 2015 Market Crash Dead Ahead

Stock markets opened lower on the first day of trading of 2015, and the credit markets that forewarned the 2007 crash are showing signs of strain. The FTSE 100 slid on the first day of trading in 2015. Here are 10 warning signs that the markets may drop further.
Vix Fear Gauge
For five years, investor fear of risk has been drugged into somnolence by repeated injections of quantitative easing. The lack of fear has led to a world where price and risk have become estranged. As credit conditions are tightened in the US and China, the law of unintended consequences will hold sway in 2015 as investors wake up. The Vix, the so-called “fear index” that measures volatility, spiked to 18.4 on Friday, above the average of 14.5 recorded last year.
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Goldman Sachs S&P 500 Sentiment Indicator at High

What "wall of worry"? Goldman Sachs S&P 500 Sentiment Indicator has reached 11 on the Spinal Tap amplifier of euphoric positioning...

As Goldman warns...
Sentiment Indicator ranks net futures positioning versus the past 12 months. Readings
below 10 or above 90 indicate extreme positions that are significant in predicting future returns.
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How You Can Beat Wall Street

Mutual funds tend not to do better than the S&P 500. If the S&P 500 rises 12% like it did in 2014, most mutual funds will book gains somewhat less than 13%. But this year, the pros' performance was terrible...

This table, using data from Goldman Sachs, shows that only around 15% of large-cap mutual funds did better than 12%. As an investor, I hope you look at that and say, "Heck, I can do better that." And I agree — you can.

For one, you could just buy an S&P 500 index fund. Such a fund will have a miniscule fee, so your performance will pretty much match the index itself. (more)

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Energy Guru Bets Big on Chesapeake CHK

Archie Dunham is no ordinary investor when it comes to energy stocks.
He’s got a blue-blooded resume that perfectly conveys his expertise and success in the energy industry.
Dunham has worked his way from the ground level of ConocoPhillips (COP) – a company worth close to $100 billion today – all the way up to chairman!
He retired in 2004, but you can’t just shut expertise like that off. Dunham is still playing the market in a big way, and I always make a point to follow his moves.
So it’s no surprise that Dunham has found the perfect bet to make in this season of depressed oil and gas prices.  (more)

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US Weekly Economic Calendar

time (et) report period ACTUAL CONSENSUS
10 am Motor vehicle sales Dec.   16.9 mln 17.1mln
10 am ISM nonmanufacturing Dec.   58.0% 59.3%
10 am Factory orders Nov.   -0.7% -0.7%
8:15 am ADP employment Dec.   -- 208,000
8:30 am Trade deficit Nov.   -$41.0 bln -$43.4 bln
2 pm FOMC minutes 12/27      
8:30 am Weekly jobless claims Jan. 2   292,000 298,000
3 pm Consumer credit Nov.   -- $13 bln
8:30 am Nonfarm payrolls Dec.   220,000 321,000
8:30 am Unemployment rate Dec.
5.8% 5.8%
10 am Wholesale inventories Nov.   -- 0.4%
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