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

To: The Ox who wrote (19371)	6/9/2017 12:09:15 AM
From: John Pitera	1 Recommendation Recommended By The Ox Respond to of 33421

Hi Ox, You are picking up on all the Key points.... Your focus on the Earnings Picture entirely reinforces the narrative that we had a *"stealth bear market"* from that bobbed and weaved and lowered market sector and overall US stock prices from The crest of earning in Q2 of 2014.... and had SPX earnings decline to barely pulsing in Q1 of 2015 before going into negative regression for 5 consecutive Quarters from Q 2 2015 until Q3 of 2016. It was only at Q3 of 2016 when, the BOJ stopped the bottomeless spiral of the wider global central bank experiment with negative long term interest rates and we had the incredible turning point in the global bond markets occurring in a 36 hour window with the record low in Japanese Government Bonds JGB, German Bund and the US 10 prices reaching it's 36 year cycle massive bull market peak in PRICE and Bottom in YIELD at 1.336 on July 5th in the US 10 year note... And the on July 8th for The German Bund and Japanese JBG.... The Global Central Bankers... . came to a resolution that The the Japanese and ECB (and the oldest of the central banks.... the Kingdom of Sweden) were to stop the incredible black hole spiral to negative infinity with negative interest rates. The 10 year chart of the Big 3 Global bond markets *The turn on a dime top in price --- bottom in Yield in the Big 3 Global Bond Markets* *The 1 year chart of daily YIELD action amplifies the wild thrashing by Japan and Germany (the ECB)* ------------------------------------------------------------------------------------------------------------------------------------ Here is the my Proprietary SPX JJP ATR cross of the Eur/JPY :$WTIC correlation chart. The methodology reinforces the case that we experienced a bear market and has a very good track record. I explained how the chart works in a post on 3/36/17 which I have reposted below the update chart, which has become even more bullish --- this is my proprietary model that uses the *EUR/JPY crossrate and then correlates it to WTIC.... so you have 4 of the deepest largest markets in the world..... the Eur/JPY "RIsk On Risk Off" proxy then as a ratio of the single most important global commodity input crude.* I have shown this 2 or 3 times this past 15 months............ but it's just *esoteric enough that it does not get traction in the layman and even the professional traders mind.* and it has had a very good record..... when the 14 week Average true range goes below the long term 200 week average true range with is calculated on the EUR/JPY Crossrate and then divided as a ratio of $WTIC.... what that calculation in KISS (KEEP it SIMPLE STUPID) is doing is showing *when the relative volatility of 3 of the worlds biggest pricing components stabilizes.... it creates the necessary price stability in corporate planning models* and in Global Macro Institutional Investor Models to *expand risk exposure*...that is long US equity exposure. To Clarify the signals are generated when the Blue 14 period ATR goes below the long term 200 period Moving average.... and that generates a buy a the Average True Range of the EUR/JPY cross / by WTIC is coming down.. what is nice about this model is that you can have signals that are in effect for 2 years or so at a time. with sectors such as the Various energy sectors peaking in Q 2 of 2014. and all the indices in bear mode from mid June of 2015 to Jan 2016 and not really getting in gear until Q3 of 2016 The argument can be made that we experienced a stealth bear market in stocks from Mid 2015 into the early 2016 and other parts of this rotating bear market did not end until the Central Banks reversed course on their dire experiment with Negative interest rates in Japan, the Eurozone, Sweden, the Netherlands and the USA, which only save negative interest rates in places such as New York Trust Bank demanding payments for institutional accounts that wanted to deposit more than $50 Million in accounts with them. the US did experience multiple rounds of Quantitative Easing and Fed Balance sheet expansion and the Fed Funds rate and 3 month Libor hovered near zero for years after the Great Financial Crisis of 2008-2009. The stealth bear market saw many stocks go down a much larger percentage and the RUT fell from 1296 on 06/23/2015 all the way down to 943.10 on 02/11/2016. The NYSE fell from 11,254.87 on 05/21/2015 all the way to 8937.99 on 01/20/2016... many "nifty 50" stocks of the early teens of the 21st century experienced a much more severe mark down in price in this rotating 2 year bear market, obviously the energy sector stocks were decimated with huge percentage declines and a number of bankruptcies. John