Hot and Fresh Charts 10-28-2019

Hot and Fresh Charts 10-28-2019


Hot and Fresh Charts 10-28-2019 — with David Moadel hey everybody welcome to looking at the
markets with David Modell I’ll kind of show you some charts that hopefully will
have you thinking if you are heavily invested in S&P 500 large cap stocks you
might want to consider taking some profits and rotating into some
commodities or ETFs that represent commodities or whatever the case may be
because commodities according to this chart from us global investors are
severely undervalued compared to the S&P 500 so just something to think about I
do believe that mean reversion generally happens not always but tends to happen
sooner or later it might take some time though I’m not expecting this chart to
turn around tomorrow or even possibly this year although the year is coming to
a close and for anybody who really believes that the US economy is just
doing perfectly well the is M manufacturing index and Wyatt here is
down and even the non manufacturing is M index is heading downwards and
manufacturing is a big part of the GDP in the United States so when it’s down
yes the stock market is up and this is down so there’s a divorce between the
stock market and the economic reality of the United States something to think
about and remember this is a globalized economy it’s interconnected
China is the second largest economy and the China GDP year over year over year
is way down and if you believe that you know if their economy falters and their
stock market rolls over if you think it’s not going to affect us you may have
a rather nasty surprise in store and there’s only so much that the Fed can do
they’ve pushed the both the thirty-year in purple and the 10-year in green
Treasury yields down so much and there’s a thing called the law of diminishing
returns where you know you can only squeeze so much juice out of that out of
that orange okay and so you get less and less impact from those rate cuts until
it goes get down to zero I know I know can also go negative
but there’s desensitization in the markets whereas where the markets can
only go up so much as a result of rate cuts if they just keep cutting and
cutting the impact I believe could be less and less and less especially as the
market just gets used to it and comes to expect it US corporate debt-to-gdp is at
hey is that a very high mark and corporate debt is very important a lot
of people pay attention to the nearly 23 trillion dollar sovereign debt that’s
that’s the US government debt but corporate debt is also at a peak level
even higher than it was in you know right before the stock market crashes of
2000 and 2008 and according to Chris Capital want to give them a shout-out
here according to their model the US stock market is overvalued and overdue
for a major correction even more so than it was prior to 2000 and 2008 and that’s
that’s referring to the S&P 500 also according to crest cap capital you can
pick almost any of them of the popular metrics of valuation here whether it’s
cape sickle cyclically adjusted p/e ratio or MAPE margin adjusted p/e ratio
or median price to sales median price to book value pick any of these and
the SP is in the 90s most of them in the mid or even 99% historical percentile
compared to where it usually is at so anybody who believes that the stock
market is not overvalued I say you know pick a metric any metric and you know
what will be the catalyst that can eventually will have caused the market
to finally roll over and give us some decent prices in SP 500 stocks well it I
mean it’s fragile so it wouldn’t take really that much this is you might
recall Lehman Brothers and Bear Stearns you know started the domino effect of
the 2008 financial crisis this is an old chart of Lehman back in 2007-2008 before
they went bankrupt and then you can overlap today’s Deutsche Bank chart here
and it is you know unsettlingly similar might be a coincidence might not be
again the world is interconnected and global nouse of deutsche bank files you
know for bankruptcy then that could cost turbulence in the global macroeconomic
landscape and this is according to top down charts want to give them a shout
out here they have some great charts long-term consensus growth expectations
way down in the S&P 500 and even further down in the russell 2000 which is the
small ease you know the Small Cap index and that’s small businesses which are
the lifeblood of the American economy if they’re not doing well you know even if
the apples and the Amazons of the country and of the world are doing well
if small businesses are not doing well then the economy cannot be considered as
doing well and I showed you this one before if you want to get into
commodities you might consider gold and silver or even uranium this is from
Kimiko comm and their chart shows uranium at being just the price pressure
on it is enormous and you know I don’t
spend a lot of time in recent videos talking about uranium but I probably
should and if you believe that there’s going to be a need for energy
alternative I guess you might call it an alternative to you know more traditional
sources of energy such as coal and petroleum you know I wouldn’t call
uranium necessarily an alternative source of energy but it is something
that is is not coal and it’s not oil and so if you believe that the world will
have a an increased demand for that then you might believe that this will at some
point come back upwards of course it’s not just about the price action there’s
a demand there’s supply there’s the geopolitical landscape there are other
things to think about so I want you to do your own due diligence and do your
own research before you consider buying anything don’t just buy something
because I showed you a chart or just because anybody showed you a chart you
got to make your own decisions all right I’m not gonna promote any promote
anything of my own in this one hope you enjoyed and I just hope this makes you
think a little bit before you go too heavily and too heavily into us large
cap and mega cap stocks all right thanks a lot everybody I’ll talk to you again
soon

10 Comments

  • Maverick

    October 28, 2019

    Very informative David. The bubble will pop sooner or later. Thanks!

    Reply
  • Marcela Damico

    October 28, 2019

    hi david how are you… wich is the ticker for uyranium? thank you

    Reply
  • Marcela Damico

    October 28, 2019

    THANK YOU!!!!!

    Reply
  • Day Trading with Chris

    October 28, 2019

    Stonks baby!!!! Cant believe the gap up on Spy today and then just couldn't keep it pushing, if we go up a little more will look to get my hands on some shorts

    Reply
  • Jason Fry

    October 29, 2019

    Hey David. Thanks for the other way to look at things on a green day. We are in a positive spin phase in market news. Not so long ago folks were fearing a recession. How soon we forget because of some good earnings reports. Now everyone is screaming breakout and buy, buy, buy! I just keep thinking we are one tweet or one piece of bad news away from a terrible blow to the market. I'm holding about 30-40% cash right now and it's tough to do when all the talking heads are euphoric. Sometimes I need to hear a counterpoint to keep level headed. Thanks for your hard work. No, seriously. I mean that. I love your charts and look forward to looking at the technical stuff with you each week. You give me things to think about. FYI – relatively new active investor here with 16 years of retirement savings to manage. I'm learning.

    Reply
  • Informed Trades - DayTrading/Investing

    October 29, 2019

    I am bearshin but the market is still bullish lol eventually it will pop soon

    Reply
  • COMPOUND-INTEREST STOCKGUY!

    October 29, 2019

    All These Layoffs Everywhere Wells Fargo, Deutsche Bank 18000, Seems Everywhere there's Job Cuts! Too Much Debt on every Company's balance Sheet. They need Hyperinflation so the Debt is worth nothing and the businesses who are Earning good $ can pay it off in a SNAP with BIGGER EARNINGS from more Expensive goods, and same wages to F the Lower and Middle Class Harder:). Lovely Look into 2020:).

    Reply
  • Am Zaca

    October 29, 2019

    Could you do a video about companies that can be a proxy for uranium and/or other less popular commodities. thank you!

    Reply
  • Passive Income Tom

    October 29, 2019

    Thanks for sharing this as always David!πŸ‘

    Reply
  • RicoSuave Investing

    October 29, 2019

    Great info man. Correction, recession, obsession lol something is coming.

    Reply

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