Posts Tagged ‘stock market rally’

The Death Cross: Another Sign That We Are On The Verge Of A Recession?

The Death Cross: Another Sign That We Are On The Verge Of A Recession?

Courtesy of The Economic Collapse Blog 

The Standard & Poor’s 500 50-day moving average stands poised to cross beneath the 200-day moving average.  To those in the financial industry, this is known as a "death cross", and it is a very powerful indicator that we could be entering a bearish period.  So is this yet another sign that we are on the verge of a recession?  Well, anyone who has spent much time trying to interpret financial charts will tell you how inexact that science can be.  Financial markets can be wildly unpredictable, and there is always a tremendous amount of manipulation going on behind the scenes.  However, when you add this impending death cross with all of the other signs that we could be entering a recession, there certainly seems to be reason for alarm.  The truth is that financial markets across the globe are full of fear and panic right now.  In fact, as noted in another article, the dominant force in world financial markets in 2010 is fear.  When fear rules, markets become very volatile and they can fall very quickly.  Anyone who has spent much time trying to squeeze profits out of world financial markets knows that they tend to fall much faster than they ever rise.  So are we now approaching one of those times of panic when financial markets across the world fall at breathtaking speed?

Well, the truth is that nobody knows.  Anyone who says that they can predict these things with 100 percent certainty is either a liar or they are unbelievably rich. 

But certainly the mood in the financial markets is grim.  If a death cross does happen on the S&P it is going to make things even more tense.        

For those not familiar with investing terminology, Investopedia defines a "death cross" this way….

A crossover resulting from a security’s long-term moving average breaking above its short-term moving average or support level.

In this case, the death cross would be happening on the S&P 500, which is a weighted index of the prices of 500 large-cap common stocks actively traded in the United States.  The S&P 500 is one of the most commonly used benchmarks for the overall U.S. stock market.

So how soon could we see a death cross on the S&P 500?

Well, some analysts believe that it could happen almost…
continue reading


Tags: , , , ,




AN UNSTOPPABLE BEAR KILLING MACHINE

AN UNSTOPPABLE BEAR KILLING MACHINE

Courtesy of The Pragmatic Capitalist 

A few weeks ago we joked that the SEC had banned all downticks.  That might not sound so funny now as there have been almost zero downticks over the last two months.  Stocks have rallied on 75% of all days and ever 0.5% dip has been aggressively bought into.  This market is an unstoppable bear killing machine.  Equities have reversed their full 1.5% losses from this morning as the “buy the dip” trade continues to dominate every minute of every day.  The truly amazing rally just doesn’t quit:

ES2 AN UNSTOPPABLE BEAR KILLING MACHINE 

 ******

As an aside, you might ask, who ISN’T buying?

Corporate insiders, that’s who. Look at these charts from Insider Cow:

insider buy

insider buy/sell ratio


Tags: , , ,




CHART OF THE DAY: THE UNSTOPPABLE MARKET

CHART OF THE DAY: THE UNSTOPPABLE MARKET

Courtesy of The Pragmatic Capitalist

Lord help you if you’ve been short for the last 4 weeks.  Over this time period, stocks have risen on 85% of the days and the market has felt entirely invincible.  Small dips are quickly gobbled up by aggressive buyers.  I would argue that this has been the most impressive portion of the entire 70% move from the lows in March 2009.  Stocks have surged 8% (that’s a 96% annualized rate for those keeping track) in less than 4 weeks as the market has risen in 22 of the last 26 sessions.   Impressive might just be an understatement.

SPY1 CHART OF THE DAY: THE UNSTOPPABLE MARKET


Tags:




Multi-Year Stock Market Top Could Be In

Mish thinks the top is either in or should be, if fundamentals matter anymore.  He’s made a lot of good calls in the past. – Ilene

Multi-Year Stock Market Top Could Be In

Courtesy of Mish

Professor David Waggoner posted the following chart yesterday on Minyanville that I think is worth noting.

stock market chart

click on chart for sharper image

Professor Waggoner commented "The next intermediate level pivot down is around 882. It is a 50% retrace of the entire move up from the low and is a possible pivot for an extension of the entire A-B-C pattern off the low. It is also a natural support level as shown on the chart.

These intermediate level targets are based on the interpretation that the move up from the March low is a corrective retrace of a 5 wave set down from October 2007.

I concur with Professor Waggoner’s analysis.

The important point in above chart is that the move up from the March low is likely a correction, not the start of a new bull market. That information alone is worth far more than any details as to how the market may decline from here. Many patterns are still in play.

Depending on the index, you can count these moves off the bottom as a simple A-B-C correction as shown, or as an A-B-C-D-E wedge. We’ll know which one was correct in hindsight, but both suggest stocks will eventually make new lows – either sooner (in 2010) or later. A multi-year top could be in. Fundamentally, it should be in.

In the short-term, if we have in fact seen the end of the rally, the SPX will likely decline to the 200 day moving average, currently at 916. By the time we get there, it could be in the neighborhood of the 38% retrace line near 933. If things go quickly, it could be down there by the end of the year.

This is not a recommendation to short; this is a notice that risk is tremendously high and a top could be (and in my opinion should be) in. The market may have other ideas.

Mike "Mish" Shedlock

 


Tags: , ,




DEEP THOUGHTS FROM DAVID ROSENBERG

DEEP THOUGHTS FROM DAVID ROSENBERG

Courtesy of The Pragmatic Capitalist

Some good thoughts here from David Rosenberg on the current state of the market:

It is really amazing to sift through the fund flow data because it is so apparent that it is the “pros” that are chasing this market higher. The private client is fully aware that two bubbles burst seven years apart as Wall Street product-pushers came up with back-to-back new paradigms — the first being the tech mania followed by a new era of housing and credit finance…

It is not lost on the individual investor that equities have generated no net return over the last 11 years and that we are very clearly in the middle of a classic secular bear market. What is amazing, and indeed, encouraging, is that the long-term resolve of the investor is not being overwhelmed by greed as Wall Street strategists push the theory of pricing the market on “mid-cycle” earnings and economists push the theory that data that come in “less negative” is actually bullish.

To be chasing the market after a 60% rally that is now priced for a V-shaped recovery is clearly not the strategy being deployed by the private investor, at the margin. So, what we see as evidence is the record $42.91 billion that flowed into U.S. bond funds in August, on top of the $34.7 billion intake in July. Year-to-date, bond funds have taken in a net $180 billion, about double the $92 billion during the comparable period in 2008.

It’s not as if people are selling equities — they are just watering down their already-high exposure in the stock market. Equity-based funds attracted $3.86 billion of new inflow in August, bringing the cumulative tally to $15 billion. So, it is very interesting to see where the “mountain of money”, “cash on the sidelines” and “dry powder” is going. Into fixed-income. For every dollar flowing into equity funds, twelve is flowing into bond funds.

To be sure, some will point to this as some sort of a bullish contrary data-point. Then again, maybe there is a secular demographic development that needs to be understood — a survey recently conducted by AARP (American Association of Retired Professionals) found that 49% of those between 45 and 64 years old are not confident that they have saved sufficiently for retirement. Fully 12% of this


continue reading


Tags: , , , ,




The 2009 Rally – Breadth Without Compare

Click here for a FREE, 90-day trial subscription to our PSW Report!

Rob Hanna follows up on his previous article, "Never Have So Many Stocks Been So Stretched Above …," showing that the number of stocks trading at prices two standard deviations above their 200ma was at an all time high. – Ilene

The 2009 Rally – Breadth Without Compare

Courtesy of Rob Hanna at Quantifiable Edges

Yesterday I looked at Worden Bros. T21111, which measures the number of stocks trading at least 2 standard deviations above their 200ma. As you’ll recall, it was hitting an all-time high. (Data goes back to 1986.)

With Wednesday’s big rally, we are now seeing even more extraordinary numbers. Not only is T2111 up to 58.51%, but T2112, which measures the % of stocks trade at least 2 standard deviation above their 40-DAY moving average, is also in record territory. It is showing that a remarkable 57.19% of stocks are now stretched far above their 40-ma’s.

The action in T2112 truly exemplifies the uniqueness of the rally since March. Below is a long-term look at the indicator. Note that from 1986 through 2008 the highest reading this indicator ever registered was 37.22% in November of 2004. That record has been blown away repeatedly over the last 6 months.


 

Let’s now zoom in on this year to better see what I’m saying.

There simply is no comparison over the last 23 years to what we are seeing in this recent rally. There have now 5 distinct periods in the last 6 months where T2112 has rallied through the old high. And now we’re seeing the most extreme breadth numbers of all.

 


Tags: , , , , ,




IT’S ALL ABOUT LIQUIDITY!

Have you wondered, is it true, is the rally really due to tons of money lying around with nowhere else to go?

IT’S ALL ABOUT LIQUIDITY!

liquidityCourtesy of The Pragmatic Capitalist

Is the real economy rebounding or is this just a liquidity/stimulus driven rebound? David Rosenberg has an opinion:

IT’S ALL ABOUT LIQUIDITY, ROSENBERG!

This is what we are hearing. The fundamentals take a back seat because there is so much liquidity to be put to work, and it all must go into equities. This reminds us of all the liquidity talk during the bubble peak of late 2007. The reality is that the mountain of money is no higher or lower than it was when the market was plumbing the depths through 2008 — money market mutual funds back then were $3.5 trillion and guess what? Today they are $3.5 trillion. Go figure.

So you see, liquidity is a catch-all term when nobody can really explain why the market is going up. This rally is based on a lot of hope that we are going to see a V-shaped economic recovery in the U.S. The S&P 500 is priced for 4% real GDP growth. We don’t see it. Try 2%, which is what the investment-grade corporate bond market is priced for. If we get 4% GDP growth then the equity market is fully priced, but that sort of economic expansion would take Baa spreads of U.S. Treasuries down another 100bps to 200bps, if historical relationships were to hold. But if we see 2%, then at least you will clip your coupon in the fixed-income market. The S&P 500, which at one point would have licked its chops over such a possible outcome (back when it was priced for -2.5% growth last March), would now see 2% growth as a disappointment and would correct down towards 850, again, based on our models.

I would argue that it’s all about psychology really.  As the global economy began to fall off a cliff last summer and fall investors began to worry.  When we saw some of our most prominent financial institutions vulnerable investors panicked and sold everything.  Now, we’re seeing the return of rational thinking and cooler heads.  The government has certainly helped to steady the markets, but what has really returned to the market is some semblance of confidence.  What the government needs to start worrying…
continue reading


Tags: , , , , ,




Hedge Funds Betting on a Deflationary Market Collapse

Hedge Funds Betting on a Deflationary Market Collapse

black swansCourtesy of Jesse’s Café Américain

The observations herein regarding the nature of this stock market rally are quite in parallel with our own.

Buying the dollar to play the debt deflation trade may also be a good one in the short run, especially if leveraged foreign punters have to quickly raise cash to cover bad bets made in the US markets.

However we would have to add that this scenario assumes no black swans with regards to the heavy overhang of US dollars being held by overseas central banks.

If we were in such a position, we would be selling the rallies, given the huge amount dollars on the books.

Bloomberg
Goldman Sachs Wrong on Economic Recovery, Macro Hedge Funds Say

By Cristina Alesci

Sept. 1 (Bloomberg) — Paul Tudor Jones, the billionaire hedge-fund manager who outperformed peers last year, is wagering that Goldman Sachs Group Inc. and Morgan Stanley got it wrong in declaring the start of an economic recovery.

Jones’s Tudor Investment Corp., Clarium Capital Management LLC and Horseman Capital Management Ltd. are taking a bearish stand as U.S. stock and bond prices rise, saying that record government spending may be forestalling another slowdown and market selloff. The firms oversee a combined $15 billion in so- called macro funds, which seek to profit from economic trends by trading stocks, bonds, currencies and commodities.

“If we have a recovery at all, it isn’t sustainable,” Kevin Harrington, managing director at Clarium, said in an interview at the firm’s New York offices. “This is more likely a ski-jump recession, with short-term stimulus creating a bump that will ultimately lead to a more precipitous decline later.”

Equity and credit markets have rallied on hopes that government intervention is pulling the U.S. out of the deepest economic slump since the Great Depression. The Standard & Poor’s 500 Index jumped 51 percent from its 12-year low in March through yesterday.

The economy will expand at an annualized rate of 2 percent or more in four straight quarters through June 2010, the first such streak in more than four years, according to the median estimate of at least 53 forecasters in a Bloomberg survey.

Tudor, the Greenwich, Connecticut-based firm started by Jones in the early 1980s, told clients in an Aug. 3 letter that the stock market’s climb was a
continue reading


Tags: , , ,




Picture du Jour: Stock market rally long in the tooth

Here’s a comparison chart of this market rally with market rallies during the 1929-1932 bear market. Today’s rally is slightly longer than the longest. But is there any reason to expect greater similarity or, for that matter, that things will be different this time around? – Ilene

Picture du Jour: Stock market rally long in the tooth

Courtesy of Prieur du Plessis’s Investment Postcards from Cape Town

How does the nascent stock market rally compare with the 1929-1932 bear market, which also included bank failures, bankruptcies, severe stock market declines, etc.?

For some perspective, Chart of the Day provided the graph below, illustrating the duration (calendar days) and magnitude (percentage gain) of all significant Dow rallies during the 1929-1932 bear market (solid blue dots).

As the chart shows, the duration of the current rally of the Dow Jones Industrial Index (hollow blue dot labeled “You are here”) is longer than that of any of the rallies that occurred during the 1929-1932 bear market. The bear market rally that began in November 1929 lasted 155 calendar days and occupies the second position. However, as far as magnitude is concerned, the November 1929 rally (+48%) resulted in a better performance than the 46% gain of the Dow since the low of March 9.

chart-of-the-day1

Source: Chart of the Day, August 28, 2009.
 

 


Tags: , ,




RANDOM THOUGHTS BY TPC

RANDOM THOUGHTS BY TPC

Courtesy of The Pragmatic Capitalist

* weak data = Fed ease, stocks rally
* consensus data = lower volatility, stocks rally
* strong data = economy strengthening, stocks rally
* bank loses $4bln = bad news out of the way, stocks rally
* oil spikes = great for energy companies, stocks rally
* oil drops = great for the consumer, stocks rally
* dollar plunges = great for multinationals, stocks rally
* dollar spikes = lowers inflation, stocks rally
* inflation spikes = will inflate all assets, stocks rally
* inflation drops = improves earnings quality, stocks rally

  • Reader Dean points out Dr. Bernanke’s many great successes:

 


Tags: , ,




 
 
 

Zero Hedge

Will COVID-19 Lead To A Gold Standard?

Courtesy of ZeroHedge View original post here.

Authored by Alasdair Macleod via GoldMoney.com,

Even before the coronavirus sprang upon an unprepared China the credit cycle was tipping the world into recession. The coronavirus makes an existing situation immeasurably worse, shutting down China and disrupting global supply chains to the point where large swathes of global production simply cease.

The crisis is likely to be a wake-up call for complacent investors, who are content to buy benchmark bonds i...



more from Tyler

Phil's Favorites

What scientists are doing to develop a vaccine for the new coronavirus

 

What scientists are doing to develop a vaccine for the new coronavirus

It is critical to learn more about SARS-CoV-2, including its source and why transmission appears to be more efficient than with previous coronaviruses. (Shutterstock)

Courtesy of Marc-Antoine De La Vega, Université Laval

With an increasing number of confirmed cases in China and 24 other countries, the COVID-19 epidemic caused by the novel coronavirus (now known as SARS-CoV-2) looks concerning to many. As of Feb. 19, the latest numbers listed 74,280 confirmed cases including 2,006 deaths. Four of these de...



more from Ilene

Biotech & Health

What scientists are doing to develop a vaccine for the new coronavirus

 

What scientists are doing to develop a vaccine for the new coronavirus

It is critical to learn more about SARS-CoV-2, including its source and why transmission appears to be more efficient than with previous coronaviruses. (Shutterstock)

Courtesy of Marc-Antoine De La Vega, Université Laval

With an increasing number of confirmed cases in China and 24 other countries, the COVID-19 epidemic caused by the novel coronavirus (now known as SARS-CoV-2) looks concerning to many. As of Feb. 19, the latest numbers listed 74,280 confirmed cases including 2,006 deaths. Four of these de...



more from Biotech

Members' Corner

Why do people believe con artists?

 

Why do people believe con artists?

Would you buy medicine from this man? Carol M. Highsmith/Wikimedia Commons

Courtesy of Barry M. Mitnick, University of Pittsburgh

What is real can seem pretty arbitrary. It’s easy to be fooled by misinformation disguised as news and deepfake videos showing people doing things they never did or said. Inaccurate information – even deliberately wrong informatio...



more from Our Members

The Technical Traders

Gold Rallies As Fear Take Center Stage

Courtesy of Technical Traders

Gold has rallied extensively from the lows near $1560 over the past 2 weeks.  At first, this rally didn’t catch too much attention with traders, but now the rally has reached new highs above $1613 and may attempt a move above $1750 as metals continue to reflect the fear in the global markets.

We’ve been warning our friends and followers of the real potential in precious metals for many months – actually since early 2018.  Our predictive modeling system suggests Gold will rally above $1650 very quickly, then possibly stall a bit before continuing higher to target the $1750 range.

The one thing all skilled traders must consider is the longer-term fear that is build...



more from Tech. Traders

Kimble Charting Solutions

Precious Metals Eyeing Breakout Despite US Dollar Strength

Courtesy of Chris Kimble

Gold and silver prices have been on the rise in early 2020 as investors turn to precious metals as geopolitical concerns and news of coronavirus hit the airwaves.

The rally in gold has been impressive, with prices surging past $1600 this week (note silver is nearing $18.50).

What’s been particularly impressive about the Gold rally is that it has unfolded despite strength in the US Dollar.

In today’s chart, we look at the ratio of Gold to the US Dollar Index. As you can see, this ratio has traded in a rising channel over the past 4 years.

The Gold/US Dollar ratio is currently attempting a breakout of this rising channel at (1).

This would come on further ...



more from Kimble C.S.

Insider Scoop

68 Stocks Moving In Friday's Mid-Day Session

Courtesy of Benzinga

Gainers
  • Trans World Entertainment Corporation (NASDAQ: TWMC) shares climbed 120.5% to $7.72 after the company disclosed that its subsidiary etailz entered into a deal with Encina for $25 million 3-year secured revolving credit facility.
  • Celldex Therapeutics, Inc. (NASDAQ: CLDX) fell 39.8% to $3.1744. Cantor Fitzgerald initiated coverage on Celldex Therapeutics with an Overweight rating and a $8 price target.
  • TSR, Inc. (NASDAQ: TSRI) gained 36.2% to $8.17.
  • ...


http://www.insidercow.com/ more from Insider

Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

 

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...



more from Bitcoin

ValueWalk

What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...



more from ValueWalk

Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Tuesday, 01 October 2019, 02:18:22 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Wall of worry, or cliff of despair!



Date Found: Tuesday, 01 October 2019, 06:54:30 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Interesting.. Hitler good for the German DAX when he was winning! They believed .. until th...



more from Chart School

Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



more from Lee

Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

more from M.T.M.

Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

more from Promotions





About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.