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Breadth, Bonds, Bills, & Bear Funds Signal Trouble Ahead For Stocks

Courtesy of ZeroHedge. View original post here.

The 'resilience' of stock markets is proclaimed as self-reflectingly positive, as they surge higher, enthusiastically embracing debt ceiling anxiety, nuclear armageddon, and biblical floods. However, below the surface all is very much not rosy

As Bloomberg reports, this is a warning for stock traders entranced by a market that remains resilient to surprises. Even though the S&P 500 is less than 1 percent away from a record set this month, the best move is to wait out more selling, according to Strategas Research Partners.

Breadth has deteriorated as the benchmark gauge has been mostly listless. Only about 48 percent of stocks in the S&P 500 are currently trading above their 50-day moving averages, near the fewest of the year and down from 74 percent last month, data compiled by Bloomberg show.

And longer-term trends are just as bad with only 65% of S&P members above their 200-day average…

“Tepid momentum is often consistent with below average returns in the short-run,” Strategas analysts led by Chris Verrone wrote in a research note Tuesday.

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Bonds are not buying the bounce in stocks at all.

Treasury yields are at 2017 lows (despite strong GDP and strong ADP?) signaling a total lack of belief in the global growth vision being sold to the world's equity investors.

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Treasury Bills are signaling massive concerns over debt ceiling discussions.

The pre-debt-ceiling bills are massively bid…

Sending debt ceiling anxiety premiums to record highs.,..

As S&P analysts warn, if this hits, it will be catastrophic.

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And finally, Bear Fund Assets have collapsed to record lows…

The squeeze ammunition is running very low for the next leg higher in stocks.

*  *  *

Bloomberg concludes, that caution is the buzzword at Raymond James & Associates, which is advising clients to be patient and pick their entry points carefully amid thinner markets and gold prices that look poised to break through a “longer-term downtrend,” according to Andrew Adams, a strategist at the firm.

We continue to exercise patience in the near term, as most of the indicators we follow are still weak-to-neutral and not really flashing that ‘attractive opening’ that we look for,” St. Petersburg, Florida-based Adams wrote in a note Tuesday morning.

With the dollar sitting near the lowest level in 2.5 years and the outlook for government funding murky, some traders say it may be the time to take the chips off the table.

“Perhaps take a percentage of your portfolio and put it in cash,” said Stephen Carl, principal and head equity trader at Williams Capital Group LP in New York. “You don’t go broke taking profits.”


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