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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (15786)	4/10/2014 7:46:23 PM
From: John Pitera	Read Replies (2) \| Respond to of 33421

Faber: 2014 Market Crash Will Be Worse Than 1987 Posted: 4/10/2014 4:11:30 EDT Marc Faber says the stock market is *setting up for a decline more painful than the sudden crash of 1987.* "I think it's very likely that we're seeing, in the next 12 months, an '87-type of crash," Faber said with a devious chuckle on CNBC. "And I suspect it will be even worse." Faber, the editor and publisher of the Gloom, Boom & Doom Report, has recently called for growth stocks to decline. And he says the pain in the Internet and biotech sectors is just getting started. "I think there are some groups of stocks that are highly vulnerable because they're in cuckoo land in terms of valuations," Faber said. "They have no earnings. They're valued at price-to-sales*. And this is not a good metric in the long run." ( it is a ridiculous metric..... B2B stocks Commerce one and Ariba had price to sales ratios of 120!! editorial comment JJP)* To be sure, there are prominent investors that disagree with Faber, among them legendary stockpicker Bill Miller, who said this week that conditions for a bad market simply don't exist. (Bill Miller had negative returns and lost money in 2008 after at least 15 years of excellent market performance where he outpaced the benchmarkets of his fund.... So he generated positive Alpha and is an exceptionally good investment manager.... editorial note by JJP) But it's not just momentum stocks that Faber is wary of. He says that investors are coming to a stark realization. "I believe that the market is slowly waking up to the fact that the Federal Reserve is a clueless organization," Faber said. "They have no idea what they're doing. *And so the confidence level of investors is diminishing, in my view."* As investors adjust to this fact, and valuations shrink, he predicts a massive decline in the market. "This year, for sure—maybe from a higher diving board—the S&P will drop 20 percent," Faber said, adding: "I think, rather, 30 percent. Who knows. But all I'm saying is that it's not a very good time, right now, to buy stocks." -------------- I think you really need to be underweighting equities at this point in time ... and some outright bearish strategies are appropriate for those with the sufficient risk management skill set. JJP

To: Hawkmoon who wrote (15786)	4/10/2014 9:16:24 PM
From: John Pitera	2 Recommendations Recommended By Davy Crockett Hawkmoon Read Replies (1) \| Respond to of 33421

The GFA Alpha Mechanical Trading System entered it's first 2 positions today. The account has $100,000 in initial equity. at 3:52 PM the system generated two buy signals of bear ETF's $30,000 was deployed by purchasing 1530 shares of the BIS at $19.6 with a simultaneous 5% stop loss of $18.62 $30,000 was deployed in purchasing 488 shares of QID @ $61.45 with a stop loss of 5% at $58.38 so 60% of the account equity is being utilized and the risk to the account is $3000 or 3% of account equity The Alpha system indicated that these 2 ETF's have upper quintile risk reward features compared to the energy or SOX ETF's John