The S&P 500 officially entered into a bear market after a December 24th record decline of 2.7%.  Prior to December 24, 2018, there had never been a prior Christmas Eve decline of even 1%.  The decline of 15% for December puts the month on pace to become the worst ever when compared to all prior end of the year months.  The S&P 500’s decline from its all-time high will reach 30% after it declines by another 10% to a temporary bottom of just above 2000, possibly as soon as year-end or in early January 2019.  A US and global recession, has either already been underway or, just began due to December’s global market meltdown. December and year-to-date returns for Bull & Bear Tracker’s signals have increased to 44% and 132% respectively.        

The S&P 500 will be unable to hit even a temporary bottom until it declines to below 2100 for two reasons:

• The probability has increased considerably that the US will enter into a recession at the beginning of 2019, if it has not already entered into one.  The shock from the December crash will cause a decline in consumer spending. The December crash being the main topic of conversation at all Christmas day gatherings will definitely spook the consumer into retrenching.  It’s what happened after the October 2018 crash. See chart below. The risk is high that those consumers who hold stocks will decide to make getting out of the market their New Year’s resolution.

• The technical support for the index as depicted in the chart below is approximately 2053.40.  The horizontal line depicts that the S&P 500 had been under accumulation during the first half of 2016.     When a market crashes the tendency is to go to previous accumulation levels. Therefore, the decline should at least temporarily slow down as soon at the S&P 500 gets to below 2100.

The odds of a recession happening are very high.  The chart below depicts that the market has declined prior to the beginning of every recession over the past 90 years with only one exception.   The market went up before the 1945 recession only because World War II ended in the summer of 1945.

Given that a recession will likely occur after the nine-year secular Bull Market reached its peak in September of 2018, the S&P 500 is likely to decline by at least 60% from peak to trough.   This projection is based on what happened after prior mature secular bull markets reached their peaks in the past. The chart below which depicts the inflation adjusted coordinates for the 1982 secular bull which peaked in 2000 is a good example.  The S&P 500 declined by more than 60% and the index did not eclipse its 2000 peak until February 2015.

To maximize upside in this highly volatile market I recommend a subscription to the Bull & Bear Tracker.  Its Green and Red signals are utilized 24/7/365 to trade two triple leveraged S&P 500, ETFs including the SPXL (Direxion Daily S&P 500 Bull 3X ETF) and the SPXS (Direxion Daily S&P 500 Bear 3X ETF).   

The statistics table below depicts that the for the 11 months the Bull & Bear Tracker’s published and back tested signals generated a return of 88%.  With the 44% that the signals have produced during the first three weeks of December the year to date return increased to 132% which is equivalent to 11% per month.  For more about how the Bull & Bear Tracker operates and how its Red signal produces profits in a down market and Green signal in an up market read my article entitled “Bull & Bear Tracker Gorging on Market Volatility”.  

Subscriptions to the Bull & Bear Tracker are currently available for free.  An automated alert and trade execution system is currently under development.  Upon the development being completed subscribers will be able to have their trades automatically and seamlessly executed by an online broker.  To subscribe for a 90-day free trial click here.   

Now that the market has gone from a secular bull to a secular bear, I highly recommend spending time at www.BullsNBears.com.   The videos on the home page are must views.   The site is loaded with educational information about crashes, recessions and depressions.   The dozen research categories below are covered:

• Crashes
• Crypto Infrastructure
• Secular Bull & Bear Markets
• Tesla
• Markets & Economy
• Tariffs
• Negative Cash Flow Research
• FANGAM stocks
• Digital Economy
• Startups & Microcaps
• Non-Public Markets
• Digital Tax Impact

Thursday December 6th may have been the final day in the life of the secular bull market.  Based on the S&P 500’s price and volume on the December 6th close and the December 7th open as depicted in the chart below it appears that the bull market which began in March 2009 has run out of gas.  For the week ended December 7th the Bull & Bear Tracker’s signals produced a return of 20.5%.  This compared to the S&P 500’s decline of 4.6% for the trade shortened week due to the market being closed on December 5th for President George Bush’s funeral.   See Bull & Bear Tracker’s signal performance statistics table below.     

From its 12/4/18 close of 2700.06, the S&P 500 declined by 2.9% to it low of 2621.53 on 12/6/18.  The index then embarked on a steady climb that resulted in its closing at 2695.95, on 12/6/18 which was 4.1 points below its open.  The inability for the S&P 500 to go the additional 4.1 points to close up for the day is a good indicator of the bull being exhausted.  The second sign was that the bullish volume at the end of the day on December 6th did not follow through after the S&P 500’s weak opening on December 7th.   Its clear from the price and volume action in the chart below that the secular bull market is either struggling or has perished.

From its 12/4/18 close of 2700.06, the S&P 500 declined by 2.9% to it low of 2621.53 on 12/6/18.  The index then embarked on a steady climb that resulted in its closing at 2695.95, on 12/6/18 which was 4.1 points below its open.  The inability for the S&P 500 to go the additional 4.1 points to close up for the day is a good indicator of the bull being exhausted.  The second sign was that the bullish volume at the end of the day on December 6th did not follow through after the S&P 500’s weak opening on December 7th.   Its clear from the price and volume action in the chart below that the secular bull market is either struggling or has perished.

Based on the Bull & Bear Tracker’s back tested results the algorithm has been gorging on market volatility.   During the months of January, February, March and October of 2018, which featured some of the worst days for the stock market since the election of President Trump, the Bull & Bear Tracker’s signals generated a return of 76.1%.  Due to the damage that October’s carnage inflicted on the stock market’s technicals, I predict that the market’s 2018 lows will be tested by year end.  Retests of the lows could enable the Bull & Bear Tracker’s signals to potentially generate additional gains of 30% or more.

Throughout 2018, the Bull & Bear Tracker’s signals have generated an average return of approximately 10% per month.  The signals have had the highest productivity during 2018’s most volatile periods. For the October 4th to November 9th period, it generated a return of 14.9%.  The January 1st through April 9th period generated a return of 62.2%.  Year to date the Bull & Bear Tracker’s back tested and published signals have generated a return of 105.1% versus 4.5% for the S&P 500.  

Since the beginning of the stock market; scholars, researchers and analysts have been attempting to no avail to find the “Holy Grail” of marketing timing.  Investors have always sought to be out of the market during periods of substantial declines. The financial services industry has gone to great lengths to educate their clients to embrace a buy-and-hold philosophy thus remaining in market during recessions and other periods of high risk.  A statistic often used by financial advisors to pacify edgy clients is that being out of the market for its best days over a long period substantially reduces gains. An example that has been widely used is that $100 invested in 1970 grew to $1,910 by 2016 under a buy and hold strategy. The amount fell to $310 assuming the $100 was not in the market for the best 25 days of the 46-year period.  The statistic rarely cited in the chart below is $100 grew to $12,045 had it missed the 25 worst days during the 46 years.

Unfortunately, the best days for the bull market which began in 2009 are in the rear-view mirror.  Since the S&P 500 may have already peaked after a nine-year uptrend, the market’s worst days are now on the horizon.  The Bull & Bear Tracker is the solution for “the worst days of the market” dilemma which all investors will soon face.  The Bull & Bear Tracker’s signals enable investors to trade inverse Exchange Traded Funds (ETF) to profit from the market’s worst days.  It’s hard to fathom the returns that the Bull & Bear Tracker could have generated had it been operational during the worst days of the 1970 to 2016 period.  

The Bull & Bear Tracker’s algorithm monitors the global markets 24 hours per day to predict the direction the S&P 500, the world’s largest stock market index, is heading.  When the market is headed higher, the signal is green.  When the market is headed lower the signal is red. The Bull & Bear Tracker is always in the market with either a green or red signal.   

Exchange traded funds (ETFs), which mimic the performance of the S&P 500, are utilized to trade the Bull & Bear Tracker’s green and red signals.  The ETF which can be used by an investor when the signal is green and the market is heading higher is the S&P 500 SPDR (Symbol: SPY).  For example, if the S&P 500’s index consisting of 500 companies increases by 10%, the SPY would also increase by 10%.  The ETF which is used by traders and investors who are betting that the S&P 500 will decline is the Direxion Daily S&P 500 Bear 1X ETF (Symbol: SPDN).  It’s the inverse of the SPY.  Should the S&P 500 decline by 10% the SPDN would increase by 10%.  

Since the Bull & Bear Tracker’s signals proved to be very reliable during 2016, my recommendation for traders and investors when it was re-launched earlier this year was to utilize the two ETFs below to trade its signals.  Both of the ETFs enable an investor to deploy 300% leverage. For example, a 10% change for the S&P 500 would be equivalent to a 30% increase for each of the ETFs.

• Green: Symbol:  SPXL (Direxion Daily S&P 500 Bull 3X ETF)   
• Red: Symbol:  SPXS (Direxion Daily S&P 500 Bear 3X ETF)

The volatility for the S&P 500, which began on October 4, 2018, is not over.  The S&P 500 suffered technical damage which can only be repaired by the index first retesting the October 29th low.  The chart below for some of the S&P 500’s “worst days” earlier this year is a textbook case example for why the index will test its October 2018 low.  It depicts the S&P 500, which was in a steady uptrend and had reached an all-time high in January 2018, then crashed to its February 8th low.  After it rallied, it crashed again to just above the February low on March 23rd.  Finally, the index’s low was retested again on April 2nd.  The S&P 500’s retesting of the low is why it was able climb steadily from April through September to make a new all-time high.  The volatility due to the retests of the February low enabled both the red and green signals to each generate returns of more than 20% from the start of 2018 through April 9th.  

The chart for below for July 31st through October 31st has a similar chart pattern as the above chart.  It depicts the steady uptrend of the S&P 500 to a new all-time high on September 20th.  The crash began on October 3rd and the S&P 500 reached its low on October 29th.  The pattern being almost identical to the above chart is why I am predicting that the signals could potentially generate a combined return of 30% from now through year end.    

The chart for below for July 31st through October 31st has a similar chart pattern as the above chart.  It depicts the steady uptrend of the S&P 500 to a new all-time high on September 20th.  The crash began on October 3rd and the S&P 500 reached its low on October 29th.  The pattern being almost identical to the above chart is why I am predicting that the signals could potentially generate a combined return of 30% from now through year end.    

The Bull & Bear Tracker was originally developed to be a market crash predictor.  From March of 2016, when it became operational through November 2016, its signals were very reliable and predicted the Brexit crash.  Due to volatility being almost non-existent after Donald Trump was elected, the crash predictor was mothballed. After the signals were modified, the indicator was relaunched on April 9, 2018.  The back test was conducted to cover gap from the beginning of 2018 to April 9th.  See my article , “NIRP Crash Indicator renamed ‘Bull & Bear Tracker’; new signal issued”.        

Subscriptions to the Bull & Bear Tracker will continue to be available free of cost until the development of the automated alert and trade execution system is completed.  The new system will enable subscribers to automatically and seamlessly have their trades executed by an online broker. To subscribe click here.  

The Bull & Bear tracker is the third algorithm I developed.  Point is, The Bull & Bear Tracker is not a one-off. It is the third in a series of “hit-the-nail-on-the-head” algorithms that effectively and accurately enable investors to stay in the market and trade confidently such that they can have the courage of their convictions.

My first algorithm, The EPS Syndrome was developed in 2002 and was used to in my September 2007 magazine article to predict the demise of Lehman, Bear Stearns and Merrill Lynch, etc.  See “Have Wall Street’s Brokers Been Pigging Out?”, September 2007.  For more about the algorithm and its performance click here.  

My second algorithm, Free Cash Yield was developed in 2003 to find the most undervalued companies in the market based on their Free Cash Yields.  The share prices of the two companies that it discovered multiplied by 20 times within four years. One of the two companies, Think or Swim was acquired by Ameritrade for $606 million.  For more information click here to view Free Cash Flow yield video.

Based on the Bull & Bear Tracker’s signal going to GREEN from RED before the market’s close on Friday November 2nd market volatility is likely to decline for the US midterm elections and the foreseeable future.  Since there are typically 50% retracement rallies for significant and sharp declines, it’s quite possible the S&P 500 could work its way back to at least 2800 before the index resumes its downward direction.  Even though the Bull & Bear Tracker’s signal is now GREEN the probability is high that 2018, will be S&P 500’s first decline for a year since 2008. It’s for two reasons:

• For October the S&P 500 declined by 7% and the NASDAQ by 9.2% from their September closes.  This resulted in the end of month mutual fund and client statements depicting a decline of greater than 7%.  The larger than normal decline as compared to less than 4% for both February and March will increase selling pressure that will be caused by mutual fund liquidations.  
• Individual investor bullish sentiment increased by almost 10 percentage points from 27.97% to 37.93% for the week ended November 1st as compared to the week ended October 25th.  The reading is the second highest since September 6th.  The only higher reading was the October 4th reading of 45.66%.  Most importantly, the neutral sentiment reading of 27.59% was the lowest since the February 1, 2018 reading of 27.59%.  This indicates that individual investors who had been on the sidelines believe that there is a buying opportunity. The chart below depicts what happened after February 1st.    

Now that the secular Bear market is underway, I highly recommend the Direxion Daily S&P 500 Bull 3X Shares (SPXL[ARCA] ETF be utilized to capitalize from the Bull & Bear Tracker’s GREEN signal.  Investors should also sign up for the Bull & Bear Tracker’s alerts which are currently freely available at www.BullsNBears.com.  The Bull & Bear Tracker is powered by an algorithm that I developed which is by best ever.  It even trumps my EPS Syndrome algorithm which I utilized to predict the collapse of Lehman, Bear Stearns and Merrill Lynch in my September 2007, Equities Magazine article.  See “Have Wall Street’s Brokers Been Pigging Out?   

The Bull & Bear Tracker is a workhorse since its signals are operational 24/7 and for 365 days per year.  Investors can profit from the S&P 500 when it goes up and also when it goes down. The table below depicts that the Bull & Bear Tracker had issued four GREEN and four RED signals since April 9th when it was taken out of retirement.  See ​NIRP Crash Indicator Renamed “Bull & Bear Tracker”; Signal Now GREEN, April 9, 2018.

The good news for those who believe that S&P 500 will march to a new high by the end of the year or in 2019 is that the Bull & Bear Tracker has track record for its signal being GREEN for extended periods.  From April 9th to October 4th the GREEN signals produced profits of 13.8%, 7.2% and 9.5% for a combined 30.5%.  

Below are my October 2018 must-read articles pertaining to why I believe that the market will be substantially lower in the coming weeks and months:

• Amazon and Google cast daggers into heart of Bull, October 25, 2018
  
• Tariffs caused Crash of 1929 and will cause next Market Crash, October 23, 2018
• Market Correction which began on October 10th NOT over, October 22, 2018
• Tuesday’s Big Move was a Sucker Rally, October 17, 2018
• Perfect Storm for Market to Continue; Bull & Bear Tracker’s Crash signal up 14%, October 14, 2018
• Day of Reckoning Approaching for Market, October 9, 2018
• Perfect Storm Brewing for Possible Market Crash Next Week, October 5, 2018
• Market Vulnerable due to Buyback Blackout; Bull & Bear Tracker signal now Red , October 4, 2018
• Nobel Laureate Shiller says Current Market is Eerily similar to late 1920s, October 4, 2018
• Frenzied Market Blow Off Underway, October 3, 2018

Additional information about the tariffs including videos are available at BullsNBears.com which covers the research categories listed below.

• Crashes
• Crypto Infrastructure
• Secular Bull & Bear Markets
• Tesla
• Markets & Economy
• Tariffs
• Negative Cash Flow Research
• Dollar/JPY Indicator
• Digital Economy
• Startups & Microcaps
• Non-Public Markets
• Digital Tax Impact

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.

After a relief rally for the major indices today the October crash will resume in full force tomorrow.  Amazon and Alphabet both reported their third quarter earnings after the market’s close today. They both missed their estimates.  Amazon reduced their revenue outlook for their fourth quarter which is during the holiday season. Due to the misses the share prices of the four FANG stocks were off by two to seven percent in the aftermarket.

It would be difficult to fathom the major indices including the Dow 30 and the S&P 500 not plumbing new lows by as early as the end of the October.  It would also be difficult for anyone to make the argument that the major indices including the S&P 500 and the Dow Jones composite will eclipse their recent all-time highs for the bull market by the end of 2018.   

My October 9, 2018, article entitled “Day of Reckoning Approaching for Market” was about the valuation of FANGAM, an index that I created to conduct research on Facebook, Amazon, Netflix, Apple, Google and Microsoft due to the valuations of the six growing at a much faster rate than their fundamentals.   Below are the statistics for the 12 months ended September 1, 2018, for FANGAM that I pulled from my article.

• Market cap increased at a compound annual growth rate (CAGR) of 42% versus 15% for the S&P 500 and 40% for FANG.
• Accounted for 17% of the S&P 500’s market cap.
• Produced 37% of the S&P 500’s gains.

The basis for my argument that FANGAM would eventually cause a collapse of the market was that since FANGAM’s market cap was represented such a large portion of the S&P 500 it had put the index into a Catch 22.   Should the market cap of FANGAM decline or even cease to grow, the performance of the S&P 500 will be negatively impacted. The index had become completely dependent on FANGAM’s members to reach new highs. On the contrary should the market caps of the six FANGAM members continue to increase the market caps of S&P 500’s remaining 494 members would have to decrease.  The amount of money that can be invested in stocks is finite.  Throughout any period in the S&P 500’s entire history, which encompasses secular bull and bear markets, the index has never grown at double digits.   In my article I also pointed out that the market cap CAGR of 42% for FANGAM for its 12 months ended September 1, 2018 was out of control when compared to the growth of its fundamentals.  For the latest fiscal-year the revenue of FANGAM increased by 19%.

Now that the four members of FANG have been defanged the market will struggle.  Without the tech leadership and with 45% of the members of the S&P 500 already in bear market territory it’s hard to envision the indices closing the year higher than 2017’s close.

To prepare for the new bear market I highly recommend that you watch the five-minute 90/10 Crash protection strategy video.  The video which provides details on how to protect your assets from crashes, recessions and depressions and also how to grow your portfolio during a bear market.   Click https://shinypennystocks.com/crash-protection-registration/ to gain access to 5 minute video.

To better understand my math as well as to learn about the secular bear market and the recession-investing strategies that I am recommending from now through 2030, watch my recently taped two-part interview. A private pre-screening of part two of my interview, which is being aired on the Fox Business channel at 3:30PM on Saturday October 27th on the Fox Business channel is NOW exclusively available to BullsNBears.com’s alert subscribers. Click here to subscribe to BullsNBears.com free alerts. Part 1 of the interview is also available to subscribers.

Below are my most recent must-read articles pertaining to why I believe that the market will be substantially lower in the coming weeks and months:

• Tariffs caused Crash of 1929 and will cause next Market Crash, October 23, 2018
• Market Correction which began on October 10th NOT over, October 22, 2018
• Tuesday’s Big Move was a Sucker Rally, October 17, 2018
• Perfect Storm for Market to Continue; Bull & Bear Tracker’s Crash signal up 14%, October 14, 2018
• Day of Reckoning Approaching for Market, October 9, 2018
• Perfect Storm Brewing for Possible Market Crash Next Week, October 5, 2018
• Market Vulnerable due to Buyback Blackout; Bull & Bear Tracker signal now Red , October 4, 2018
• Nobel Laureate Shiller says Current Market is Eerily similar to late 1920s, October 4, 2018
• Frenzied Market Blow Off Underway, October 3, 2018

Additional information about the tariffs including videos are available at BullsNBears.com which covers the research categories listed below.

• Crashes
• Crypto Infrastructure
• Secular Bull & Bear Markets
• Tesla
• Markets & Economy
• Tariffs
• Negative Cash Flow Research
• Dollar/JPY Indicator
• Digital Economy
• Startups & Microcaps
• Non-Public Markets
• Digital Tax Impact

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.

October 23rd is the 89th anniversary for the 1st day of the Crash of 1929  

The Smoot Hawley Tariff was the cause of the crash of 1929 which commenced 89 years ago on October 23, 1929.  The legislative process that the Smoot-Hawley tariff underwent beginning in 1928 was the cause of the 1929 stock market crash and the Great Depression.  The chart below depicts the two biggest crashes that occurred between 1925 and 1932.

The Trump tariffs have the potential to cause a crash of the stock market and initiate the first worldwide depression since the 1930s.  Those who do not learn from the mistakes that were made in the past are bound to repeat them. However, in this case it’s difficult for to learn from the past since the history books are inaccurate.  The history books are in need of being rewritten.

The roaring 20s, rampant fraud and speculation were all blamed by historians for the crash of 1929.   According to my research each of them got a bad rap. The real culprit was the Smoot-Hawley tariff.  It’s understandable as to why historians have not laid blame on the tariff which was blamed for extending the depression.  Smoot-Hawley was not signed into law by President Herbert Hoover until June of 1930. That was eight months after October 1929 crash occurred.     

The tariff that would take the name of Smoot, the Chairman of the Senate Finance Committee and Hawley, the Chairman of the House Ways and Means Committee evolved from the 1928 campaign promises that Herbert Hoover made to U.S. farmers.  After the U.S. House of Representatives passed their broad version of Smoot-Hawley Act on May 28, 1929, the Dow Jones Industrials composite declined by 3.6%. After assurances were made by members of the U.S. Senate Finance Committee that it would not pass a broad version of the tariff the stock market continued on to advance to its September 3, 1929 all-time high which would not be surpassed until 1954.  

What caused the 1929 crash of the market to begin was the news of the US Senate flip flopping and going from a position of being against a broad tariff to being for a broad tariff in the late afternoon of October 23, 1929.  The market had anticipated that the worst-case scenario would be for the Senate to pass a very narrow and agriculture products only version of the tariff. It was because a majority of Senators had formed a coalition against a broad tariff earlier in 1929.  The chart below depicts the market corrections and crashes that were caused by the Smoot Hawley tariff’s news from 1928 through 1930.

What caused the market to bottom in November of 1929 and to begin its climb back to its long-term trend line by May of 1930 was the US Senate deciding to postpone its December 1929 vote on the tariffs.   After Hoover informed the economists that he would not veto the tariff in May of 1930 the Dow’s trend changed from accumulation to liquidation.

The parallels between the 1920 to 1929 bull and the 2009 to 2018 bull are eerily similar.   The average annual return for the 1920 bull was 24.8% and the return for the 2009 bull to date is 22.3%.   The unemployment rate at the peak of both the 1920 and 2018 bulls were at record lows. The income tax rates in the late 1920s were comparable 2018.  Finally, both Hoover and Trump were Republicans who made tariff campaign promises to win their Presidential campaigns.

The following are my key gleanings from conducting my research on the Smoot Hawley tariff:

• The author of the NY Times Watchtower column quoted Senator Thurman who stated “Nobody wants it and everybody is for it”.  The nobody was the investors and the everybody was the US Congress.
• The members of Congress and President Hoover were oblivious to the fact that investors were very upset about tariffs.  Some senators petitioned the President to throw his support behind the tariff because they believed that it would stop the crash from accelerating.  
• The Smoot Hawley tariff articles by the press in 1929 were not headline articles.  Instead of headlining the tariff the news media leveraged the market volatility to create sensational headlines about the market declining.

The analysts, economists and pundits who are predicting that the tariffs will not have an impact on the markets are wrong.   Savvy investors pulled their money out of the stock market from 1928 through 1930 for the same reasons that they will pull their monies from the markets until the tariffs are eliminated for the reasons listed below.    

Tariffs:

• Restrict the flow of trade
• Increase in consumer prices and inflation  
• Reduction in sales growth and profits for corporations
• Increases in interest rates
• Reduction in foreign investment

The chart below depicts the expansion of PE multiples after FREE exploded due to the fall of communism and China opening its economy in the late 1980s.

The chart below depicts the contraction of PE multiples after President Bush enacted steel tariffs in 2002.   

The performance of the S&P 500 during the period that the Bush steel tariffs were in effect is a prime modern-day example of the damage that a tariff can cause for a stock market.  The tariff was abolished in 2003.

The Bull & Bear Tracker’s GREEN and RED signals are a great way to trend trade the market’s downside and upside and to also capitalize from sudden spurts of volatility.  The signals are utilized to trade the Direxion Daily S&P 500 Bull 3X Shares ( (SPXL[ARCA]) and the Direxion Daily S&P 500 Bear 3X Shares (SPXS[ARCA]).  From the April 9th through October 12th, the period that the signals were published on Equities.com the Bull & Bear Tracker significantly outperformed the S&P 500.  

The performance of the signals which are now exclusively available to subscribers at has since increased since October 12th since the signal has been red since October 18th.  The Bull & Bear Tracker’s signal alerts are available at BullsNBears.com. For information on the Bull & Bear Tracker and to get access to the alerts go to https://shinypennystocks.com/bull-bear-tracker/.

To better understand my math as well as to learn about the secular bear market and the recession-investing strategies that I am recommending from now through 2030, watch my recently taped two-part interview. A private pre-screening of part two of my interview, which is being aired on the Fox Business channel at 3:30PM on Saturday October 27th on the Fox Business channel is NOW exclusively available to BullsNBears.com’s alert subscribers. Click here to subscribe to BullsNBears.com free alerts.  Part 1 of the interview is also available to subscribers.    

Below are my most recent must-read articles pertaining to why I believe that the market will be substantially lower in the coming weeks and months:

• Market Correction which began on October 10th NOT over, October 22, 2018
• Tuesday’s Big Move was a Sucker Rally, October 17, 2018
• Perfect Storm for Market to Continue; Bull & Bear Tracker’s Crash signal up 14%, October 14, 2018
• Day of Reckoning Approaching for Market, October 9, 2018
• Perfect Storm Brewing for Possible Market Crash Next Week, October 5, 2018
• Market Vulnerable due to Buyback Blackout; Bull & Bear Tracker signal now Red , October 4, 2018
• Nobel Laureate Shiller says Current Market is Eerily similar to late 1920s, October 4, 2018
• Frenzied Market Blow Off Underway, October 3, 2018

Additional information about the tariffs including videos are available at BullsNBears.com which covers the research categories listed below.

• Crashes
• Crypto Infrastructure
• Secular Bull & Bear Markets
• Tesla
• Markets & Economy
• Tariffs
• Negative Cash Flow Research
• Dollar/JPY Indicator
• Digital Economy
• Startups & Microcaps
• Non-Public Markets
• Digital Tax Impact

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.

The market correction which began on October 10 is far from over.  The lifting of the restrictions for share buybacks by corporations who are reporting earnings for their fiscal periods ended September 30 will not matter.  Two things happened during the week ended October 19th which will cause the markets to have a peak to trough correction of at least 10% before the uptrend for the 2009 secular bull could potentially be re-established.  They are the price action for Netflix shares and the news about September’s real estate statistics.

Netflix

What happened to Netflix’s shares last week indicates that the S&P 500 can-not stabilize at its current level.   Throughout 2018, Netflix shares have ranked at the very top or near the top of the market’s best top performers. It’s one of the members of FANGAM, an index which is comprised of six tech companies, that I created to conduct research on the S&P 500 for my October 9th “Day of Reckoning Approaching for Market” article.   After Netflix reported record earnings and handily beat their new subscriber estimates its share price reached $380.00, the high for the week on October 17th.  When the market sold off on Thursday Netflix shares fell back to the price that they were trading for prior to their day earlier earnings announcement.   On Friday October 19th Netflix’s share price fell by four percent and closed down for the week.  

The inability for Netflix shares to hold their gains after reporting record earnings, which were above Wall Street estimates, and instead closing down for the week speaks volumes for Netflix and the market.  Based on Netflix’s price action, its shares are not attracting new investors and its current shareholders are not adding to their positions. Most importantly, traders and not investors are in control of the market for Netflix shares as indicated by there being a lack of firm bids at the closing price the day before earnings were released.  The lack of conviction that investors have for Netflix, a company for which 25 Wall Street analysts have “buy” or “strong buy” recommendations on the shares underscores the market’s house-of-cards foundation.

Real estate

The daily email report that I got from Bloomberg after the close of the market on Friday caught my eye.  The lead subject “Housing doldrums leave analysts out in the cold” for the email was about the downturn of real estate gaining momentum.   Below are the excerpts from the Bloomberg article:

• The U.S. housing market is slowing down, and that’s giving a chill to economists who see it as sign of bad things to come. Sluggish sales and falling rents indicate developers may have added too much inventory. And while banks are pulling back from real estate lending, non-banks are rushing in to fill the void.
• Sales of previously owned U.S. homes eased in September to the weakest pace in almost three years, a sign that rising prices and mortgage costs are keeping potential buyers on the sidelines. The sixth-straight monthly drop in sales is the longest streak since 2014.
• Rents are on the decline too, a bad omen for builders who may have already filled cities with too many amenity-rich apartments that were built for gains that won’t exist, according to Zillow. Developers are selling into overpriced markets with higher construction costs and are finding it harder to pass those expenses on to customers. With a slowdown expected to last through the coming year, shares are suffering.
• Banks held back by post-crisis limits are curtailing their lending to builders, but that’s not stopping the flow of money. Funding by more lightly regulated sources of capital, including debt funds and mortgage REITs, was up more than 40 percent in 2017 to almost $60 billion. The result: a decline in lending standards and even more inventory added.
• Policy makers are only starting to recognize the “possibility” of a significant weakening in the housing sector. Research suggests the housing market has already entered a cyclical downturn that’s likely to intensify, says Bloomberg Opinion’s Lakshman Achuthan.

The surfacing of the real estate data on Friday was likely the cause of the S&P 500 selling off by 30 points from its high and to close even on the day.  When this new data becomes digested by professional investors the bullish sentiment will decrease and the bearish sentiment will increase. Therefore, the probability has increased that the S&P 500’s September 20, 2018, all-time high will be the high for the secular bull market which began in 2009.   The reason why the market and the S&P 500 has to correct by at least 10% is because the percentage is the rule of thumb that most professional investors and traders use to buy market dips.

The Bull & Bear Tracker’s GREEN and RED signals are a great way to trend trade the market’s downside and upside and to also capitalize from  sudden spurts of volatility. The signals which have generated a return of more than 30% since April are utilized to trade the Direxion Daily S&P 500 Bull 3X Shares ( (SPXL[ARCA]) and the Direxion Daily S&P 500 Bear 3X Shares  (SPXS[ARCA]).

The Bull & Bear Tracker’s signals are exclusively available at BullsNBears.com. For information on the Bull & Bear Tracker and to get access to the FREE alerts go to https://shinypennystocks.com/bull-bear-tracker/.

To better understand my math as well as to learn about the secular bear market and the recession-investing strategies that I am recommending from now through 2030, watch my recently taped two-part interview. A private pre-screening of my two-part interview, which will be broadcast on the Fox Business channel at the end of October is available NOW exclusively to BullsNBears.com’s alert subscribers. Click here to subscribe to BullsNBears.com free alerts.

Below are my most recent must-read articles pertaining to why I believe that the market will be substantially lower in the coming weeks and months:

• Tuesday’s Big Move was a Sucker Rally, October 17, 2018
• Perfect Storm for Market to Continue; Bull & Bear Tracker’s Crash signal up 14%, October 14, 2018
• Day of Reckoning Approaching for Market, October 9, 2018
• Perfect Storm Brewing for Possible Market Crash Next Week, October 5, 2018
• Market Vulnerable due to Buyback Blackout; Bull & Bear Tracker signal now Red , October 4, 2018
• Nobel Laureate Shiller says Current Market is Eerily similar to late 1920s, October 4, 2018
• Frenzied Market Blow Off Underway, October 3, 2018

BullsNBears.com covers the research categories listed below.

• Crashes
• Crypto Infrastructure
• Secular Bull & Bear Markets
• Tesla
• Markets & Economy
• Tariffs
• Negative Cash Flow Research
• Dollar/JPY Indicator
• Digital Economy
• Startups & Microcaps
• Non-Public Markets
• Digital Tax Impact

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.

The signal for the Bull & Bear Tracker has gone from RED to GREEN.  The market crash that had been underway since October 10th has been abated.  Those who participated in my strategy which I outlined in my October 5, 2018, article entitled “Perfect Storm Brewing for Possible Market Crash Next Week” should sell the SPXS.   Had one purchased SPXS shares at the closing price of $22.01 on October 5th and sold at 3:20PM today at $23.61 booked a 7.3% gain.   

The Bull & Bear Tracker’s GREEN and RED signals are a great way to trend trade the market and to also capitalize on sudden spurts of volatility.  My Oct. 5 article, I detailed an investing strategy to utilize the Bull & Bear Tracker’s RED signal to purchase the SPXS during the last half hour of trading.  The Bull & Bear Tracker’s signals are utilized to trade the Direxion Daily S&P 500 Bull 3X Shares and the Direxion Daily S&P 500 Bear 3X Shares ( (SPXS[ARCA] – $23.60 0.04 (0.17%)  

The Bull & Bear Tracker’s in the future will no longer be published in the articles section of the website.   They are exclusively available to the subscribers of the alerts at BullsNBears.com. For information on the Bull & Bear Tracker and to get access to the FREE alerts go to https://shinypennystocks.com/bull-bear-tracker/.

To better understand my math as well as to learn about the secular bear market and the recession-investing strategies that I am recommending from now through 2030, watch my recently taped two-part interview. A private pre-screening of my two-part interview, which will be broadcast on the Fox Business channel at the end of October is available NOW exclusively to BullsNBears.com’s alert subscribers. Click here to subscribe to BullsNBears.com free alerts.

Below are my most recent must-read articles pertaining to why I believe that the  market will be substantially lower in the coming weeks and months:

• Tuesday’s Big Move was a Sucker Rally, October 17, 2018
• Perfect Storm for Market to Continue; Bull & Bear Tracker’s Crash signal up 14%, October 14, 2018
• Day of Reckoning Approaching for Market, October 9, 2018
• Perfect Storm Brewing for Possible Market Crash Next Week, October 5, 2018
• Market Vulnerable due to Buyback Blackout; Bull & Bear Tracker signal now Red , October 4, 2018
• Nobel Laureate Shiller says Current Market is Eerily similar to late 1920s, October 4, 2018
• Frenzied Market Blow Off Underway, October 3, 2018

BullsNBears.com covers the research categories listed below.

• Crashes
• Crypto Infrastructure
• Secular Bull & Bear Markets
• Tesla
• Markets & Economy
• Tariffs
• Negative Cash Flow Research
• Dollar/JPY Indicator
• Digital Economy
• Startups & Microcaps
• Non-Public Markets
• Digital Tax Impact