Daily S&P 500 INDEX TRACKER

[winner69]

Good post there hoop

Also came across this

@dailydirtnap: John Bogle is 87. Will he live long enough to see the index bubble burst?

(Bogle is founder of Vanguard and champion of index funds)

[kiora]

Amazingly... the US media hyped up this announcement all week expecting numbers of 180,000...once it was released (http://www.bls.gov/news.release/empsit.nr0.htm)it was quickly removed from the limelight and buried into the back pages....I guess the Media is in a period of Presidential good news and happiness at the moment..who wants to limelight 151,000 bits of bad news..eh.

Meanwhile, Wall St seated at the Mad Hatters tea party table is partying on knowing that the Queen of Hearts will now be reluctant to move on interest rates....."more tea anyone?:D:D"

There's been a lot of fuss about non-payroll data over recent years as commentators use it as one guideline to how the FED will react..
Below is a very long term chart which cancels out the media noise and shows the true facts and trends over the last 75 years.

The chart shows the recent period (since 2008) of slightly less growth which is compensated by the extra length of time between contractions..

Also noticeable is less volatility for longer periods between contractions since the 1960's..and especially so, since the mid 1980's...Viewing this recent run on the chart, Is the current low volatile run due to end soon?

Referring back to the September 2 non payroll data.Employment continued to trend up in several service-providing industries while it declined in manufacturing, mining and construction.

I'm personally trending towards primary sector investing atm so this mining data result is not a good result for me

http://cdn.tradingeconomics.com/charts/united-states-non-farm-payrolls.png?s=nfp+tch&v=201609022114n&d1=19160101&d2=20161231

Thanks Hoop
Personally I'm cashing out of illiquid unlisted investments as good offers have come in from other investors who are looking for value and yearly returns.Suits me to grab it while its there.Paying down OD and also trending to primary sector for further investment

[Hoop]

Good post there hoop

Also came across this

@dailydirtnap: John Bogle is 87. Will he live long enough to see the index bubble burst?

(Bogle is founder of Vanguard and champion of index funds)
Yeah..John Bogle one of the greats..

I like reading the 10th Man guy's posts (Jared Dillian)..what a very intelligent, verbally colorful character with a street fighter personality...I suppose him being an ex ETF trader, John Bogle would spring into his mind every now and again..
Kiora.. do you read his articles??

[winner69]

Yeah..John Bogle one of the greats..

I like reading the 10th Man guy's posts (Jared Dillian)..what a very intelligent, verbally colorful character with a street fighter personality...I suppose him being an ex ETF trader, John Bogle would spring into his mind every now and again..
Kiora.. do you read his articles??

Yes, they are very good

Might buy his book just released All The Evil Of This World - is a novel but probably a true story of sorts
.

[kiora]

Yeah..John Bogle one of the greats..

I like reading the 10th Man guy's posts (Jared Dillian)..what a very intelligent, verbally colorful character with a street fighter personality...I suppose him being an ex ETF trader, John Bogle would spring into his mind every now and again..
Kiora.. do you read his articles??

No interesting but I haven't heard of him before.I'll do a bit of investigation thanks W69. Commentators I follow primarily Colin Twiggs, Craigs(very little reliance) , 4 traders for brokers perspective and sharetrader for entertainment :),investor sentiment with a dash of knowledge
PT gets my vote for entertainer of the forum.I bet he gets as much fun posting as I get trying to decipher his posts

[winner69]

Janet was never going to do anything before the elections to upset the markets.

She done a fantastic job in keeping things chugging along nicely - they will be pleased

[Hoop]

Janet was never going to do anything before the elections to upset the markets.

She done a fantastic job in keeping things chugging along nicely - they will be pleased

Yep she has...
Actually looking back with hindsight...back in 2007 with Uncle Ben,,,talk about "Johnny on the Spot", having a leading Authority of Economic Depressions heading the FED.....One can only imagine what could have happened to the No1 ecomony of the World if the Brain Trusts did not burn the midnight oil for weeks on end dreaming up new "outside the square" untested monetary tools to fight the GFC...
Prolong Depression???...we will never know but with an assumption that Monetary tools smooths out the extremes ...the period since the GFC being one of extreme easing and only managing to achieve chronic low growth with near 0% inflation, we could assume the USA without Uncle Ben and Aunty Janet might have been one doosy economic decline..probably powerful enough to prematurely kill off that DOW (S&P) Secular Bear as it did in 1930

[winner69]

Yep she has...
Actually looking back with hindsight...back in 2007 with Uncle Ben,,,talk about "Johnny on the Spot", having a leading Authority of Economic Depressions heading the FED.....One can only imagine what could have happened to the No1 ecomony of the World if the Brain Trusts did not burn the midnight oil for weeks on end dreaming up new "outside the square" untested monetary tools to fight the GFC...
Prolong Depression???...we will never know but with an assumption that Monetary tools smooths out the extremes ...the period since the GFC being one of extreme easing and only managing to achieve chronic low growth with near 0% inflation, we could assume the USA without Uncle Ben and Aunty Janet might have been one doosy economic decline..probably powerful enough to prematurely kill off that DOW (S&P) Secular Bear as it did in 1930

No cuts before election - 100% certain. Never were going to be

Yes - what happens post election will be interesting

Esp if Hilary loses it as they deserves to

[Hoop]

The Democrats put up a publically disliked candidate and the Republicans said we can match that and do one better....so now there a 2 publically disliked candidates...About as irrational as their sharemarket...What's going on over there??

[winner69]

The Democrats put up a publically disliked candidate and the Republicans said we can match that and do one better....so now there a 2 publically disliked candidates...About as irrational as their sharemarket...What's going on over there??

.....and the favoured one is more crooked?

You'd love this short video about Janet

https://app.hedgeye.com/insights/53519-mccullough-what-one-of-the-world-s-most-brilliant-investors-told-me

[winner69]

S&P500 keeps up near record highs

Heading for 6th succussive quarter of decline in eps

Janet wll ensure no turmoil before the election

No worries for a while

[Hoop]

S&P500 keeps up near record highs

Heading for 6th succussive quarter of decline in eps

Janet wll ensure no turmoil before the election

No worries for a while

An outfit released their August US Manufacturing index showing it fell back to 49.something (contracting).. the first time since 2010...I tried to find it just now to reference it to my post but its disappeared..Can't remember the outfit name neither so cant google it...Geez are they quick or what in burying the bad news at the moment..
Found it!!!.. I googled US manufacturing index August (https://www.google.co.nz/search?q=US+manufacturing+index+august&ie=utf-8&oe=utf-8&client=firefox-b&gfe_rd=cr&ei=JVnPV4SROM7N8gf-oISwDA)...Ha!! that explains it..... the older (5 days old) manufacturing index result news has been replaced by the healthier (still down trending though) non-manufacturing index result..

Yeah and this poor news will help stop turmoil too....Probably stop Janet from raising interest rates.....bad news is "good" news for Wall St ...Do you feel like everything is upside down atm?

[Baa_Baa]

S&P500 keeps up near record highs

Heading for 6th succussive quarter of decline in eps

Janet wll ensure no turmoil before the election

No worries for a while

Interesting chart here. http://www.zerohedge.com/news/2016-09-06/its-probably-not-nothing

[Daytr]

Sentiment flip overnight with a Fed member previously a dove, flip to hawkish. Probably still no rate rise until Dec at the earliest & perhaps next year.
Wells Fargo reinforcing the banking bad reputation that the banks have and their complete disregard for honesty.
In regards if Yellen has been doing a good job, I beg to differ, but perhaps she is only dealing with the cards dealt to her be government policy.
The proof will be in what happens when rates start being normalised.
Globally we have a demographic issue of the baby boomer wealth wanting a safe place to park and they would prefer a large position in cash if they can get a yield. This burger flipper recovery is a problem for the Fed as although unemployment has improved dramatically, even if the numbers have been manipulated, (remember the change when sickness beneficiaries were removed) they are on the whole lowly paid jobs and the jobs lost were on average paying multiples.
Anyhoo, I had built a large position in the VIX and that certainly paid very big dividends overnight! Took profit on the majority of the position but have kept 25%.

[winner69]

Daytr - Janet is doing a good job to ensure the stock market stays high in the run up to the election. That's what they want her to do

Not doing such a good job in boosting the economy though - but thats a minor consideration

[skid]

This transcends just the economy ,but thought it was interesting

http://www.marketslant.com/articles/ron-paul-vote-all-you-want-secret-government-won%E2%80%99t-change

[peat]

despite the 2.5% drop it is interesting that Colin Twiggs stated on Fri afternoon (our time) , so that is before US trading that:

The S&P 500 continues to consolidate below 2200 with a rounding top. A short downward leg would complete an inverted scallop — like an inverted fishing hook— a strong continuation pattern in bull markets. Respect of support at 2100/2130 would complete the pattern.


8291

[Valuegrowth]

There may be some volatility in the coming week but the bull market in stocks isn't dead yet.

[kiora]

Interesting where we have come from
https://nz.finance.yahoo.com/q/ta?s=%5EGSPC&t=5y&l=on&z=l&q=l&p=m10%2Cm50%2Cm200&a=&c=
Is this "this time its different?"
Where is the volume ?

[winner69]

They gave Janet a good old telling off and she has sorted out her team so all back on track. Markets heading to new highs before the election.

Janet needs to make sure her team keeps to the script.

[Valuegrowth]

As I said before, Madam Janet is doing a great job. In addition, still global central banks want to maintain their loose monitory policy. Definitely, we should see next rate hike in 2017.

[Hoop]

8294
Need to rise above todays levels to break above the broken support conjunction (now strong resistance)..another drop would confirm todays rally was not a rally but a pullback (second chance to sell out)..Keep in mind that all bullish patterns on the S&P 500 chart got wiped out with Fridays drop...

After the mouse click to enlarge the image It may not be large enough to read the type.. Hit both Ctrl and + buttons on the keyboard together to enlarge image further........Ctrl and - to reduce

[Daytr]

It was obviously a giant head fake as CNBC called it. One Fed speaker flips & the market sneezed, however its unrealistic I think that the Fed will raise rates before the election and they may even push it our further if Trump gets elected. I can't see markets going too much higher especially with the election looming. Glad I traded right out of my VIX position and took a whopping profit. I might have to reset that one if I get a chance..

[Hoop]

It was obviously a giant head fake as CNBC called it. One Fed speaker flips & the market sneezed, however its unrealistic I think that the Fed will raise rates before the election and they may even push it our further if Trump gets elected. I can't see markets going too much higher especially with the election looming. Glad I traded right out of my VIX position and took a whopping profit. I might have to reset that one if I get a chance..

I think the FED may not move...2 results were unexpected..the consensus was for growth to pick up again starting the middle of 2016... the US manufacturing index August results released last week showing a continuing downtrend in expansion and the US non-manufacturing August results released the week before showing a contraction for the first time since 2010...I think these results will be considered bad enough to prevent a rate hike by the FED...See my post #1762 07-09-2016. (http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page118)

I'm not convinced Friday's drop was the news of a possible rate hike this month ...this is old regurgitated news and factored in.....this eery calm spooking the restless herd..could be something else is brewing ...or... .. nothing but herd paranoia (sentiment) and the market may bounce back quickly, a la Brexit...time will tell....

Head fakes don't cause major technical breakdowns..Dayr....Presently the S&P500 and the DOW are technically broken..Mondays "relief rally" did not fix it...the"relief rally" looks more like a pullback than a rally..A pullback is a rise back to near its break price point where the rise then fails ...The market has to break back to repair the technical damage...If it doesn't, then a correction will happen 5% 10% 15% 20% who knows...

Because the market is broken there's a better chance it will fall on Tuesday

Honestly the market is probably due for a correction (healthy?)... it's had a rapid rise since Brexit lows..

Daytr quote .." Glad I traded right out of my VIX position and took a whopping profit. I might have to reset that one if I get a chance.."
Well done mate ....back "in" tonight are we:)

[winner69]

Just as well this time is different
http://www.businessinsider.com.au/the-sp-500-looks-eerily-similar-to-right-before-the-1987-crash-2016-10?r=US&IR=T

[Hoop]

Just as well this time is different
http://www.businessinsider.com.au/the-sp-500-looks-eerily-similar-to-right-before-the-1987-crash-2016-10?r=US&IR=T

Yeah me too...I've seen plenty of comparision charts over the years... there use to be a very scary 1929 comparsion chart floating around some years ago..

Your post jogged my memory to check my Sentiment warning indicator..I was rather surprised to see that the Get out warning got triggered on the 12th September...Not much drama occurred then so this warning slipped under my radar...

Normally the Sentiment indicator triggers warnings a few days in advance of the drop (except the Brexit was sudden) but this latest warning is a month old and there has been only a mild weakness, however the warning is still active...that's strange!!...

If this weakness turns into a drop, I can say that it shouldn't come as a surprise to investors as they had plenty of warning this time around...

Previous Sentiment Indicator warning chart posted 28th June 2016 Post #1705 (Brexit) (http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page114)

http://i458.photobucket.com/albums/qq306/Hoop_1/SampP%20500%2012102016.png (http://s458.photobucket.com/user/Hoop_1/media/SampP%20500%2012102016.png.html)

[JohnnyTheHorse]

Thanks for the update on your indicators Hoop.

Looks like it could be a telling night/few days for US markets. Trends being broken - watching 2120 for a break with interest.

[peat]

Currently (using the monthly candles) we await a bullish outcome in November based on a potential rising three methods.

8374
We had the breakout above the previous high during the month of July. We still await the fourth candle (long and green hopefully) to satisfy the requirement of the candle pattern. Current red candles are price coming back to find support at the high of 2015.

8373

[Hoop]

For November to be bullish, expected earnings must not disappoint...

This schedule may be useful (from NZH 21/10/2016 (http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=11733785))

Earnings schedule for the week of 10/24/2016

11:15 PM Friday Oct 21, 2016



Major companies tentatively scheduled to post quarterly earnings next week:

MONDAY
Restaurant Brands International Inc. reports quarterly financial results before the market opens.
Visa Inc. reports quarterly financial results after the market closes.

TUESDAY
Caterpillar Inc. reports quarterly financial results before the market opens.
General Motors Co. reports quarterly financial results before the market opens.
Merck & Co. reports quarterly financial results before the market opens.
Chipotle Mexican Grill Inc. reports quarterly financial results after the market closes.

WEDNESDAY
Boeing Co. reports quarterly financial results before the market opens.
Coca Cola Co. reports quarterly financial results before the market opens.
Comcast Corp. reports quarterly financial results before the market opens.
Southwest Airlines Co. reports quarterly financial results before the market opens.
Tesla Motors Inc. reports quarterly financial results after the market closes.

THURSDAY
Aetna Inc. reports quarterly financial results before the market opens.
Altria Group Inc. reports quarterly financial results before the market opens.
Ford Motor Co. reports quarterly financial results before the market opens.
United Parcel Service Inc. reports quarterly financial results before the market opens.
Alphabet Inc. reports quarterly financial results after the market closes.
Amazon.com Inc. reports quarterly financial results after the market closes.
Apple Inc. reports quarterly financial results after the market closes.
Twitter Inc. reports quarterly financial results after the market closes.

FRIDAY
Exxon Mobil Corp. reports quarterly financial results after the market closes.

[peat]

thanks for that Hoop. yes all those things will have an impression but maybe Hillary winning is enough??

[Valuegrowth]

November should be better than October and September. However, I don’t expect big jump in developed markets until end of this year. Instead, we could see Santa rally and rally in individual stocks. I particularly more bias toward global food related stocks. They are one of the categories which can produce good earnings. On Friday McDonald's Corp. (MCD) gained nearly 3% after the fast-food giant reported better than expected earnings.

So far Both MCD and Microsoft reported better than expected earnings.

https://www.bloomberg.com/news/articles/2016-10-21/microsoft-shares-poised-to-hit-record-high-boosted-by-cloud


Currently (using the monthly candles) we await a bullish outcome in November based on a potential rising three methods.

8374
We had the breakout above the previous high during the month of July. We still await the fourth candle (long and green hopefully) to satisfy the requirement of the candle pattern. Current red candles are price coming back to find support at the high of 2015.

8373

[Hoop]

thanks for that Hoop. yes all those things will have an impression but maybe Hillary winning is enough??
Would the market already have a Clinton Victory factored in?

[peat]

Yes it has become increasingly likely of a Clinton win over the last few weeks but a factor for the risk could still be there. Brexit surprised.
Also the Fed rate may or may not eventuate, so there are at least two big factors , both of which still has the possibility of surprising.

haha I shouldn't be talking about the FA explanation for a TA pattern which is still developing

[blackcap]

Yes it has become increasingly likely of a Clinton win over the last few weeks but a factor for the risk could still be there. Brexit surprised.
Also the Fed rate may or may not eventuate, so there are at least two big factors , both of which still has the possibility of surprising.

haha I shouldn't be talking about the FA explanation for a TA pattern which is still developing

Peat, I don't know what information you are looking at but a Clinton win has pretty much stayed static in the last 3 weeks, if the money is to be believed. At about a 17% chance give or take 1%. But agree with you that the "brexit" risk is still implied in the market.

[peat]

Peat, I don't know what information you are looking at but a Clinton win has pretty much stayed static in the last 3 weeks, if the money is to be believed. At about a 17% chance give or take 1%. But agree with you that the "brexit" risk is still implied in the market.

its not too important but for the sake of face I quote from Investopaedia

During the primary season, Trump consistently led in the polls. After the conventions, Clinton opened a wide lead, but by the end of September, the race looked neck and neck again.

Trump's October surprise – the release of a tape from 2005 in which he claimed to be able to assault women sexually with impunity because he's famous – brought him back to lows he hasn't seen since the end of the Democratic convention in July, and his debate performances have not been able to halt his slide in the polls.


Read more: Donald Trump for President: What Are the Chances? | Investopedia (http://www.investopedia.com/articles/investing/111615/current-probabilities-donald-trump-president.asp#ixzz4Nsk32GBu) http://www.investopedia.com/articles/investing/111615/current-probabilities-donald-trump-president.asp#ixzz4Nsk32GBu
Follow us: Investopedia on Facebook (http://ec.tynt.com/b/rf?id=arwjQmCEqr4l6Cadbi-bnq&u=Investopedia)

[blackcap]

its not too important but for the sake of face I quote from Investopaedia

During the primary season, Trump consistently led in the polls. After the conventions, Clinton opened a wide lead, but by the end of September, the race looked neck and neck again.

Trump's October surprise – the release of a tape from 2005 in which he claimed to be able to assault women sexually with impunity because he's famous – brought him back to lows he hasn't seen since the end of the Democratic convention in July, and his debate performances have not been able to halt his slide in the polls.


Read more: Donald Trump for President: What Are the Chances? | Investopedia (http://www.investopedia.com/articles/investing/111615/current-probabilities-donald-trump-president.asp#ixzz4Nsk32GBu) http://www.investopedia.com/articles/investing/111615/current-probabilities-donald-trump-president.asp#ixzz4Nsk32GBu
Follow us: Investopedia on Facebook (http://ec.tynt.com/b/rf?id=arwjQmCEqr4l6Cadbi-bnq&u=Investopedia)

Fair call, I understand that, and the polls probably are sliding, although he is more robust in the electoral ones that matter. Still not there but close enough to have a shot. What I am saying is that any market moves over the last 2 weeks or so should not have been because of an increased Clinton win because well there has not been an increased winning chance for Clinton in the last 2 weeks. Anyhow its a moot point. Because Clinton is almost guaranteed to win, there will be more turmoil if she does not one thinks than if she does.

[kiora]

Goldman Sachs cuts its forecast for S&P 500 earnings
http://finance.yahoo.com/news/goldman-sachs-cuts-sp-500-earnings-forecasts-115840969.html
S&P 500 (^GSPC) price-earnings multiples could expand even further
http://finance.yahoo.com/news/gutsy-analyst-argues-that-already-expensive-stock-prices-will-get-even-more-expensive-123829662.html

[Hoop]

Opening quote from Factset Newsletter "...Earnings Scorecard: As of today (with 23% of the companies in the S&P 500 reporting earnings for Q3 2016),
78% of S&P 500 companies have reported earnings above the mean estimate and 65%of S&P 500 companies
have reported sales above the mean estimate...."

Factset Earnings Insight Newsletter 21st October 2016 (PDF) 27 pages (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&ved=0ahUKEwi5qtbknfTPAhVQO7wKHfAEBF8QFgg-MAY&url=https%3A%2F%2Fwww.factset.com%2Fearningsinsigh t&usg=AFQjCNFuZK8edzcwXyYfOp_ouZsOytyqrA&cad=rja)

[winner69]

Opening quote from Factset Newsletter "...Earnings Scorecard: As of today (with 23% of the companies in the S&P 500 reporting earnings for Q3 2016),
78% of S&P 500 companies have reported earnings above the mean estimate and 65%of S&P 500 companies
have reported sales above the mean estimate...."

Factset Earnings Insight Newsletter 21st October 2016 (PDF) 27 pages (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&ved=0ahUKEwi5qtbknfTPAhVQO7wKHfAEBF8QFgg-MAY&url=https%3A%2F%2Fwww.factset.com%2Fearningsinsigh t&usg=AFQjCNFuZK8edzcwXyYfOp_ouZsOytyqrA&cad=rja)

Always good stuff on Factset

Even that comment that was will probably be the 6th quarter in a row of eps decline

Earning recession eh

And more downward eps revisions than up ones as well

[Hoop]

Always good stuff on Factset

Even that comment that was will probably be the 6th quarter in a row of eps decline

Earning recession eh

And more downward eps revisions than up ones as well

Yep..early days yet but these more downward revisions than upward disclosures goes against the analysts forecasts of a 2017 earnings recovery..Also that piece on Apple was interesting..such a large company that its fortunes can dictate the whole S&P500 market....scary

[Hoop]

From Seeking Alpha comes this balanced article for us Techies :), analyses the state of the S&P 500 and which way it could go..
Technically Speaking: Bullish Or Bearish? by Lance Roberts (http://seekingalpha.com/article/4014618-technically-speaking-bullish-bearish?ifp=0)

[peat]

Fair call, I understand that, and the polls probably are sliding, although he is more robust in the electoral ones that matter. Still not there but close enough to have a shot. What I am saying is that any market moves over the last 2 weeks or so should not have been because of an increased Clinton win because well there has not been an increased winning chance for Clinton in the last 2 weeks. Anyhow its a moot point. Because Clinton is almost guaranteed to win, there will be more turmoil if she does not one thinks than if she does.

certainly a closing of the gap recently, and this is before the FBI announcement.

"... an ABC News/Washington Post tracking poll released on Saturday Clinton’s lead over Trump has shrunk to two points from as many as 12 points less than a week ago, according to Bloomberg. The poll was conducted October 24-27, before the FBI announced it might open a new investigation into Clinton’s emails."

A week is a long time in politics , I'm anticipating a large relief rally in November but wont pre-empt it.

[winner69]

Good old Janet - saved the day again by being a bit 'dovish'. She doing a great job for them.

Could have been carnage the way things were heading - below 2100 and all that

[winner69]

From twitterland


@carlquintanilla: S&P hasn't had 8 losing sessions in a row since .. Oct 2008. (via @peterschack) @CNBC


No worries though - just the ups and downs of a market

[Valuegrowth]

http://www.cnbc.com/2016/11/01/why-stocks-may-be-set-for-a-huge-move-in-the-weeks-ahead.html

Whystocks may be set for a huge move in the weeks ahead

[blackcap]

From twitterland


@carlquintanilla: S&P hasn't had 8 losing sessions in a row since .. Oct 2008. (via @peterschack) @CNBC


No worries though - just the ups and downs of a market

Now 9 in a row, that has not happened since..... I have no idea, somewhere I hear 1980 on the tv but do not quote me on that one.

[Baa_Baa]

Now 9 in a row, that has not happened since..... I have no idea, somewhere I hear 1980 on the tv but do not quote me on that one.

Ditto 9 days up on VIX, 27 years since that last happened. http://stockcharts.com/h-sc/ui?s=$VIX

But as reported here, http://www.marketwatch.com/story/heres-whats-unique-about-sp-500s-longest-losing-streak-in-8-years-2016-11-03, "While the current slump is shallow by comparison, the market has suffered some technical damage. The S&P 500 closed at a nearly four-month low, ending just a few points above its 200-day moving average, which many market technicians see as an important support level."

"There’s something strange about the stock market’s long losing streak" http://www.marketwatch.com/story/theres-something-strange-about-the-stock-markets-long-losing-streak-2016-11-02

"In the days ahead with volatility likely to pick up as U.S. voters go to the polls to elect the next president, it may make sense to view the market through a wider lens." http://www.marketwatch.com/story/worried-about-todays-market-take-a-look-at-this-chart-2016-11-03

No worries eh. :eek2:

[peat]

we have a long wick now for November , can it turn green and engulf!!! ?

[winner69]

Hoop - Copper on a roll the last few weeks

Good positive sign

No worries

[Valuegrowth]

http://www.bloomberg.com/news/articles/2016-11-08/stocks-higher-with-mexican-peso-as-vote-count-nears-yen-weakens

[winner69]

Closing in on all time high

No worries


(Weird how the world seems to believe all the media hype Bout the world ending)

[peat]

Currently (using the monthly candles) we await a bullish outcome in November based on a potential rising three methods.

8374
We had the breakout above the previous high during the month of July. We still await the fourth candle (long and green hopefully) to satisfy the requirement of the candle pattern. Current red candles are price coming back to find support at the high of 2015.

8373

lookin like the three methods is playing out correctly with the DOw fully engulfed
8444

the SP still fullfilling the requirements

8445

but there is still the best part of three weeks to go for the full monthly candle to complete.

[Valuegrowth]

Still I am not bearish on S&P 500 like others. It may have some volatility but as I said, it has more legs.

[winner69]

S&P500 through 2200

A bit of a struggle of late but next stop 2300

No worries

[winner69]

S&P500 through 2200

A bit of a struggle of late but next stop 2300

No worries

Couple weeks later - chugging ahead nicely to 2300

Closing in on 2250 at mo

No worries

[Valuegrowth]

Closed above 2250.

[winner69]

Closed above 2250.

Through 2300 now

Imore to come

No worries

[blackcap]

Through 2300 now

Imore to come

No worries

You got it winner... just going to keep going up and up..

[winner69]

You got it winner... just going to keep going up and up..

esp with so many bulls around - highest level for zonks

[Hoop]

Winner...I've used your posted chart and overlayed it onto the S&P500 chart below...The black line is the S&P index, the red line is MA200 and the primary trend line (broke 2 years ago) is blue....
The result wasn't exactly what I expected...I assumed the extreme positive sentiment to be the signal for a major bull market correction or cyclic reversal , however that didn't happen after the June 2014 sentiment peak...There is an eyeball correlation but the degree of the falls can not be predicted..eg comparing the degree of the two sentiment values with the degree of the two falls in the index) that of Oct 07 peak to Oct 08 trough and Jun 14 and Sept15/Feb16

Another interesting fact is with all the sentiment volatility in the last couple of years the index has moved only about +/- 10%..in other words, investing in the index those last couple of year would have resulted in uncertain mental stress and bugger all $$$ to show for it..

http://i458.photobucket.com/albums/qq306/Hoop_1/sp500%2009022017.png (http://s458.photobucket.com/user/Hoop_1/media/sp500%2009022017.png.html)

[blackcap]

Up again this morning (NZ time) things looking good, 2500 here we come.

[winner69]

Winner...I've used your posted chart and overlayed it onto the S&P500 chart below...The black line is the S&P index, the red line is MA200 and the primary trend line (broke 2 years ago) is blue....
The result wasn't exactly what I expected...I assumed the extreme positive sentiment to be the signal for a major bull market correction or cyclic reversal , however that didn't happen after the June 2014 sentiment peak...There is an eyeball correlation but the degree of the falls can not be predicted..eg comparing the degree of the two sentiment values with the degree of the two falls in the index) that of Oct 07 peak to Oct 08 trough and Jun 14 and Sept15/Feb16

Another interesting fact is with all the sentiment volatility in the last couple of years the index has moved only about +/- 10%..in other words, investing in the index those last couple of year would have resulted in uncertain mental stress and bugger all $$$ to show for it..

http://i458.photobucket.com/albums/qq306/Hoop_1/sp500%2009022017.png (http://s458.photobucket.com/user/Hoop_1/media/sp500%2009022017.png.html)

that's very clever Hoop

I get the impression the the bullish/bearish sentiment number is rather a reaction as to where the market has recently gone - lagging activity if you get what I mean.

Eye-balling the chart sentiment turns after the market turns or gains/losses slow down (either way)

Suppose sort of behaviour you would expect - with markets at reord highs at the moment most are bullish eh

Nice looking chart - what can go wrong

Well done

[kiora]

that's very clever Hoop

I get the impression the the bullish/bearish sentiment number is rather a reaction as to market has reently gone - lagging activity if you getwhstbI mean.

Eye-balling the chart sentiment turns after the market turns or gains/losses slow down (either way)

Suppose sort of behaviour you would expect - with marketscat reord highs at the monent mostvare bullish eh

Nice looking chart - what can go wrong

Well done

A bit early in the morning to be driking W68 hic

[blackcap]

A bit early in the morning to be driking W68 hic

nudging against 2350.... keeps going up cannot see an end to this run up.

And hits 2350! Another milestone reached... those in index funds must be stoked.

[Hoop]

An ancient (8 year old) bull (second oldest bull in S&P history) (http://money.cnn.com/2016/04/29/investing/stocks-2nd-longest-bull-market-ever/) achieving a best record run in a quarter century (http://www.marketwatch.com/story/stock-market-notches-best-record-run-in-quarter-century-2017-02-15).....Sharemarket theory and DOW theory recommends an Ambulance should be deployed immediately.. travel at high speed to keep up with this raging geriatric demented** bull so to be immediately available to assist when the old fella suffers a coronary arrest and goes balls up.

Demented**.....Shiller P/E currently at 29.3...the last 140years it has only been higher twice 1929 (32.6) and 1997-2001 (43.2)..all the other high P/E crashed the stockmarket around 25

(http://www.gurufocus.com/shiller-PE.php)With Shiller P/E at 29.3 the calculations say (see box below) that if it takes 8 years to revert back to the mean (16.7) there will be implied future annual return of -1.6% over that 8 years....

Quote Gurufocus In reality, it will never be the case that Shiller P/E will reverse exactly to the mean after 8 years. Table below give us a better idea on the range of the future returns will be if the market are within 50% to 150% of the mean.
(http://www.gurufocus.com/shiller-PE.php)

Scenario (http://www.gurufocus.com/shiller-PE.php)
Shiller P/E after 8 Years (http://www.gurufocus.com/shiller-PE.php)
Annual Return from Today (%) (http://www.gurufocus.com/shiller-PE.php)


Really Lucky (http://www.gurufocus.com/shiller-PE.php)
Mean x 150% (http://www.gurufocus.com/shiller-PE.php)
3.2% (http://www.gurufocus.com/shiller-PE.php)


Lucky (http://www.gurufocus.com/shiller-PE.php)
Mean x 125% (http://www.gurufocus.com/shiller-PE.php)
1% (http://www.gurufocus.com/shiller-PE.php)


Reverse to the Mean (http://www.gurufocus.com/shiller-PE.php)
Mean x 100% (http://www.gurufocus.com/shiller-PE.php)
-1.6% (http://www.gurufocus.com/shiller-PE.php)


Unlucky (http://www.gurufocus.com/shiller-PE.php)
Mean x 75% (http://www.gurufocus.com/shiller-PE.php)
-4.9% (http://www.gurufocus.com/shiller-PE.php)


Really Unlucky (http://www.gurufocus.com/shiller-PE.php)
Mean x 50% (http://www.gurufocus.com/shiller-PE.php)
-9.4% (http://www.gurufocus.com/shiller-PE.php)





(http://www.gurufocus.com/shiller-PE.php)

[Hoop]

So the deduction from my above post...The more S&P rises (PE) from this point, the higher the implied future return deficit.

[blackcap]

An ancient (8 year old) bull (second oldest bull in S&P history) (http://money.cnn.com/2016/04/29/investing/stocks-2nd-longest-bull-market-ever/) achieving a best record run in a quarter century (http://www.marketwatch.com/story/stock-market-notches-best-record-run-in-quarter-century-2017-02-15).....Sharemarket theory and DOW theory recommends an Ambulance should be deployed immediately.. travel at high speed to keep up with this raging geriatric demented** bull so to be immediately available to assist when the old fella suffers a coronary arrest and goes balls up.

Demented**.....Shiller P/E currently at 29.3...the last 140years it has only been higher twice 1929 (32.6) and 1997-2001 (43.2)..all the other high P/E crashed the stockmarket around 25

(http://www.gurufocus.com/shiller-PE.php)With Shiller P/E at 29.3 the calculations say (see box below) that if it takes 8 years to revert back to the mean (16.7) there will be implied future annual return of -1.6% over that 8 years....

Quote Gurufocus In reality, it will never be the case that Shiller P/E will reverse exactly to the mean after 8 years. Table below give us a better idea on the range of the future returns will be if the market are within 50% to 150% of the mean.
(http://www.gurufocus.com/shiller-PE.php)

Scenario (http://www.gurufocus.com/shiller-PE.php)
Shiller P/E after 8 Years (http://www.gurufocus.com/shiller-PE.php)
Annual Return from Today (%) (http://www.gurufocus.com/shiller-PE.php)


Really Lucky (http://www.gurufocus.com/shiller-PE.php)
Mean x 150% (http://www.gurufocus.com/shiller-PE.php)
3.2% (http://www.gurufocus.com/shiller-PE.php)


Lucky (http://www.gurufocus.com/shiller-PE.php)
Mean x 125% (http://www.gurufocus.com/shiller-PE.php)
1% (http://www.gurufocus.com/shiller-PE.php)


Reverse to the Mean (http://www.gurufocus.com/shiller-PE.php)
Mean x 100% (http://www.gurufocus.com/shiller-PE.php)
-1.6% (http://www.gurufocus.com/shiller-PE.php)


Unlucky (http://www.gurufocus.com/shiller-PE.php)
Mean x 75% (http://www.gurufocus.com/shiller-PE.php)
-4.9% (http://www.gurufocus.com/shiller-PE.php)


Really Unlucky (http://www.gurufocus.com/shiller-PE.php)
Mean x 50% (http://www.gurufocus.com/shiller-PE.php)
-9.4% (http://www.gurufocus.com/shiller-PE.php)





(http://www.gurufocus.com/shiller-PE.php)

But its different this time Hoop :)

[Hoop]

But its different this time Hoop :)
...and well positioned too :D

[Baa_Baa]

There's some big words here but worth a look if you are also wondering about SP500

http://www.zerohedge.com/news/2017-02-15/multi-billion-trade-meltdown-here-reason-markets-inexplicable-surge

[kiora]

There's some big words here but worth a look if you are also wondering about SP500

http://www.zerohedge.com/news/2017-02-15/multi-billion-trade-meltdown-here-reason-markets-inexplicable-surge

Word is its Soros. What goes around comes around.:sleep:

[winner69]

Factset reports the forward looking PE of the S&P500 is at it's highest since 2004 https://insight.factset.com/earningsinsight_02.17.17

For what's it worth the PE (trailing) of the ASX All Ords has reached 18 which is highest it's been since 2002. My chart below based on Colin Nicholson's numbers



The world sure is a happy place at the moment

[Hoop]

Factset reports the forward looking PE of the S&P500 is at it's highest since 2004 https://insight.factset.com/earningsinsight_02.17.17

For what's it worth the PE (trailing) of the ASX All Ords has reached 18 which is highest it's been since 2002. My chart below based on Colin Nicholson's numbers



The world sure is a happy place at the moment

As of 23rd February 2017, 92% of the companies have reported Q4 2016 results....Factset (https://insight.factset.com/earningsinsight_02.24.17?utm_source=hs_email&utm_medium=email&utm_content=43376139&_hsenc=p2ANqtz-_Dd4OrsWFiTCOZiBA3bxL470KNfNsraevW5wASiQz2-_UwR4H_vB1SyPFtFb9h2ezRzvzPiuXXqgN4iXC7Byg8I3WmJA&_hsmi=43376139)

[winner69]

All looking good eh Hoop

Only bit of negative is the 67 negative eps guidance v 31 positive guidance

But theworld remains a happy place so no worries

[Baa_Baa]

Who's doing the selling and the buying? Smart money rotating to exuberant retailers.

8711

No worries.

[Hoop]

Jeff Miller's (http://seekingalpha.com/author/jeff-miller/articles) articles are always a great read...well balanced and lots of info and links...He often gets the Editor pick (Seeking Alpha).

Last week he wrote where are we in the business cycle?
(http://seekingalpha.com/article/4047410-weighing-week-ahead-business-cycle)
Last month an article had a list of great books (http://seekingalpha.com/article/4039543-quest-investing-excellence-lesson-dow-20k).

He sometimes adds the Indicator Snapshot table with updated data..The following table below comes from his latest article..Note how bullish it is..
https://staticseekingalpha.a.ssl.fastly.net/uploads/2017/2/27/55431-14881732955654645.png


His latest article Weighing The Week Ahead: Have Stock Prices Lost Touch With Reality
(http://seekingalpha.com/article/4049898-weighing-week-ahead-stock-prices-lost-touch-reality?source=all_articles_title)

[Valuegrowth]

His how to pay sector rotation is also a good one. Investors and traders should rotate some sectors and stocks now. I would like to add one more. I will add market rotation for 2017 as well.

Jeff Miller's (http://seekingalpha.com/author/jeff-miller/articles) articles are always a great read...well balanced and lots of info and links...He often gets the Editor pick (Seeking Alpha).

Last week he wrote where are we in the business cycle?
(http://seekingalpha.com/article/4047410-weighing-week-ahead-business-cycle)
Last month an article had a list of great books (http://seekingalpha.com/article/4039543-quest-investing-excellence-lesson-dow-20k).

He sometimes adds the Indicator Snapshot table with updated data..The following table below comes from his latest article..Note how bullish it is..
https://staticseekingalpha.a.ssl.fastly.net/uploads/2017/2/27/55431-14881732955654645.png


His latest article Weighing The Week Ahead: Have Stock Prices Lost Touch With Reality
(http://seekingalpha.com/article/4049898-weighing-week-ahead-stock-prices-lost-touch-reality?source=all_articles_title)

[blackcap]

Up heaps today, nearly at 2400, might even get there. 3000 here we come...

[macduffy]

"Irrational exuberance", anyone?

[huxley]

"Irrational exuberance", anyone?


From 2015,

"Is the equity market a bubble today?

Robert Shiller: I define a bubble as a social epidemic that involves extravagant expectations for the future. Today, there iscertainly a social and psychological phenomenon of people observing past price increases and thinking that they might keep going. So there is a bubble element to what we see. But I'm not sure that the current situation is a classic bubble because I'm not certain that most people have extravagant expectations. In fact, the current environment may be driven more by fear than by a sense of a new era. I detect a tinge of anxiety and insecurity now that is a factor in markets, which is quite different from other market booms historically."

Wonder what he's thinking now!

[Hoop]

From 2015,

"Is the equity market a bubble today?

Robert Shiller: I define a bubble as a social epidemic that involves extravagant expectations for the future. Today, there iscertainly a social and psychological phenomenon of people observing past price increases and thinking that they might keep going. So there is a bubble element to what we see. But I'm not sure that the current situation is a classic bubble because I'm not certain that most people have extravagant expectations. In fact, the current environment may be driven more by fear than by a sense of a new era. I detect a tinge of anxiety and insecurity now that is a factor in markets, which is quite different from other market booms historically."

Wonder what he's thinking now!

Exuberances defining a market top is a DOW Theory thing (http://www.robertwcolby.com/dowtheory.html).
The most strange event upon us is that even after 8 years of the Bull rally there is still this continuous sentiment of market uncertainty with investors, yet when it comes to their trading, their behaviour, as seen by the elevated multiple earnings (PE) would seemingly suggest otherwise..Pioutos's article (see below) suggests the long lead up with this very long Bull market could be due to the lagging memories from the Great Recession creating an undervalued market in early stages of the Bull Market cycle..quote "...There is a case to be made that in the recent era of ultra-low interest rates, the market simply mis-estimated the correct earnings multiple. It should have been higher over the past several years...." Pioutos implies that the Market operates on above average PE's during a low interest rate era.

Pioutos article highlights the correlation of the Market with Treasury 10 year yield rates....

"...For purposes of this article, I am using the S&P 500 index price divided by trailing 12-month earnings per share before extraordinary items. The graph below plots these average monthly P/E ratios versus the average monthly 10-year Treasury yield over the last 50 years. This dataset gives us 600 data points to estimate the relationship between equity multiples and interest rates.
https://staticseekingalpha.a.ssl.fastly.net/uploads/2017/3/4/1112099-1488638081861324.png
At Friday's close, we sat at a P/E ratio of 21.96x and a 10-year Treasury yield of 2.478%. From the graph above, one can see that we are currently sitting just above the historical trend line. For those scoring at home, the slope of that dotted line is y=-0.9302x + 22.715. The current level of the 10-year Treasury yield would equate to an S&P 500 index level of 20.41x using the historical relationship, which would suggest that the S&P 500 is currently about 7% overvalued......"

Observing the chart you can see the case in point with that market mistiming back in 2010...The market rally should have been steeper up slope trend...therefore the opinion suggests 2 to 3 years into the Bull Market cycle the market was clearly undervalued..When the market started to correct with a steeper climb and the earnings remaining lack lustre it felt like the market was getting ahead of itself manipulated by the FED when in fact the market had just woken up and was in an rational state of correcting back from under values to "normal" values..

Back to your post Huxley...

Wonder what he's thinking now! (Shiller) .....Probably the same (due to sentiment) but at a heightened level (and risk)..His PE Ratio is now 29.36 (as of 3/3/2017) (http://www.multpl.com/shiller-pe/) it was ~25 when he wrote that piece you quoted..so the market was and still is overvalued (See my earlier posts)...

Pioutos's article is very good and explains sharemarket physics in an easy to read and understand format..the whole article is here (http://seekingalpha.com/article/4052076-equity-multiples-interest-rates-current-risk-premium-sufficient?ifp=0)

[Hoop]

A carry on sentiment theme from my last post above..

Another Seeking Alpha article written this time by Erin Parnell titled The Greatest Fool is Here (http://seekingalpha.com/article/4053783-greatest-fool?li_source=LI&li_medium=liftigniter-widget). He mentions the Market Sentiment of the Equity Markets (inferring the S&P500) and uses the Investor Behaviour Project at Yale University under the direction of Professor Robert Shiller the four different stock market confidence indices for the United States charts as references. His Article contains some handy investor tool (advanced charts) links as well

Summary
Investors think stocks are expensive.

Yet investors are as optimistic about future returns as they have ever been.
This is a combination that does not end well at all.
The Greatest Fool is here.
A notable divergence is taking place in the U.S. stock market. A growing percentage of investors believe that stock valuations are too high. Yet a record number of investors also think that stock prices will be higher one year from now. Such is a toxic brew of sentiment that potentially does not end well.

-------------------------------------------------------

[peat]

Hourly showing a bearish gartley over the last couple of weeks.
I see Goldman Sachs also bearish short term, so I'm in good squidlike company.

8756

Discl. No specific position.

[Hoop]

Hourly showing a bearish gartley over the last couple of weeks.
I see Goldman Sachs also bearish short term, so I'm in good squidlike company.

Discl. No specific position.

The Gartley prediction is playing out..Short term support broke today....still above the MA50 (2326)..however a lower low (now) has followed a lower high, therefore a short/medium term downtrend has commenced..

[winner69]

Jared thinks something maybe going on -

@dailydirtnap: I've seen some suggest today's move was just noise.
1+ standard deviation moves are not statistical noise. They happen for a reason.

[peat]

its just a small pattern so it doesnt predict anything outside of its own scale. so maybe 2300 or (as Angus Geddes - of Fat Prophets - mentioned in his email today) maybe 2250 would be the target.

[winner69]

S&P500 earnings for Q1 likely to 10% up on last year (Factset)

That's good

S&P500 might reach 2500 during Q2

No worries

[peat]

so the bearish gartley (yellow) played out and took us to the 1.618 extension at 2319 (lowest red dotted line). Now we have a bullish gartley playing out (purple) which could take us back up to 2414
8798

[peat]

The bullish engulfing candle did it for me and went long on the pullback as you can see - stops and take profits visible

8805

[peat]

mind the gap.
8812

[Hoop]

mind the gap.

Gaps are fascinating..eh, Peat...a science on it's own..

A important question is what type of gap is this one?.. as there are many types..Chances of gap-filling are a lot higher with certain types of gaps than others..

It seems this gap is of the breakaway type which suggests a lower chance of being filled.
The breakaways are usually the result from a break out of a chart pattern....This breakaway gap was from a descending triangle pattern breakout..

Descending triangles are generally viewed by many investors as bearish patterns, however it depends on the trend into the start of the pattern...If the trend is upward into the start of the descending triangle then the pattern is viewed more as a continuation pattern with a 73% chance of a breakout to the upside (continuing trend)..When this upside break happens it is powerful action and statistically very reliable (83% chance of reaching its target price) ..see Bulkowski's pattern site. (http://thepatternsite.com/dt.html)

The generalised target price measure of this breakout is 2355 + (2400-2330) = 2425....Bulkowski's TP value is less 2355 + [ (2400 - 2330) x 84%] = 2414 ..In other words using Bulkowski's TP measure the S&P500 index has an 84% chance of reaching 2414 which just happens to be above the primary resistance break out (2400) to form a new record high..
Anything in the way can affect the TP's chances..the resistances at 2390 and 2400 should be watched...

Gap filling....Can be an anxious time....An upward breakout can be followed by a throwback to test the breakout area before it moves up again..If this happens (37% chance..Bulkowski) it will fill the gap but remain medium term bullish...

Is it a false breakout (bull trap)?...Chances of a breakeven or negative result is 7% (Bulkowski)

[peat]

The generalised target price measure of this breakout is 2355 + (2400-2330) = 2425....Bulkowski's TP value is less 2355 + [ (2400 - 2330) x 84%] = 2414 ..

..the resistances at 2390 and 2400 should be watched...

Gap filling....Can be an anxious time....An upward breakout can be followed by a throwback to test the breakout area before it moves up again..If this happens (37% chance..Bulkowski) it will fill the gap but remain medium term bullish...

Is it a false breakout (bull trap)?...Chances of a breakeven or negative result is 7% (Bulkowski)

At 2390 TP I must be leaving some for Bhudda.
It wont take me out yet if the gap fills, but I'm not really thinking it will pull back that far - for some reason I also saw this as a high conviction play.

[Hoop]

At 2390 TP I must be leaving some for Bhudda.
It wont take me out yet if the gap fills, but I'm not really thinking it will pull back that far - for some reason I also saw this as a high conviction play.


Yep it seems a high conviction play..

Your quote..."..so the bearish gartley (yellow) played out and took us to the 1.618 extension at 2319 (lowest red dotted line). Now we have a bullish gartley playing out (purple) which could take us back up to 2414..."

Interesting the two chart pattern disciplines (harmonics and simple price chart pattern) both feature TP of 2414.

[peat]

2390 TP hit , so I'm happy if anyone wants the remaining 24 points I left :D

[winner69]

WTF happened overnight - down about 2%

And yesterday they were touting that were we going through a period of unprecedented low volatility

[Hoop]

WTF happened overnight - down about 2%

And yesterday they were touting that were we going through a period of unprecedented low volatility


Lots of Global uncertainties (risk) has been bubbling away under the surface. All it needed was a little crack (to alter market sentiment), any excuse will do...Trump and Anti-Trump media circus have supplied this ;).
Also we have to remember it is May after all ;)

Technically..the market being so flat lately (low volatility) it wouldn't take much to create damage and that happened today when the market went from great news to Sh1t with just a 2% swing....Just today's actions confirmed a double top pattern (bearish) ...closed (gap down) the end of April's candlestick gap (gap up) (bearish)..broke MA50 and many other TA indicators..
Just how far the fall will be is anyone's guess..there is resistance nearby at the 2325..so it could be a flash in the pan....
If the 2325 resistance fails, it could be the start of another bull market correction which could last for 2 to 3 months...The other scenario is the cycle reversal back to bear..for reality's sake, we have to keep reminding ourselves that this Wall St Bull is extremely old (8 years 3 months) and it's days are numbered..

My sentiment indicator which has been in caution mode for quite some time has today triggered the GET OUT warning (see my next post below)

[peat]

All these distractions push out the timetable and risk associated with meaningful reforms to take place.

OR, is it just filling the gap
8851

[Hoop]

During the last stage of the cyclical cycle (bull or bear) the market goes irrational and ignores it's own checks and balances both fundamental (sustaining over-valuations seem like the new "norm") and Technical (TA indicators throw up "cry wolf" signals)..Investor sentiment rides this irrational wave and believe it will last a long time (Seeing both Fundamentals and Technicals failing reinforces their belief that this is a new era and this time it's all different)...

My Sentiment Indicator works nearly 100% of the time with an average of 2 to 3 day warnings..over the last 2 to 3 years it has successfully predicted corrections which have unfortunately turned out to be very shallow /minor events so resulting in "cry wolf" scenarios..

After a long duration of "cry wolf" scenarios investors lose respect and ignore indicators and the Guru's that use them (e.g Bob Shiller (http://www.econ.yale.edu/~shiller/)) ..that's why so many "experienced" investors/institutions lose heaps of money when a cyclical reversal finally arrives..Their behaviour is "one of denial" they stay investing long with a bull to Bear reversal, and investing short bear to bull.

An interesting thing about the Sentiment indicator chart below:....
Notice during the last S&P500 record breaking high there was a falling trend in the percentage of company's prices above their MA200 line (68%)..This showed up as a caution (-ve divergence) with several TA indicators including the two I use (KST ROC)..

Need all 4 red arrows to trigger the Get Out signal...

Previous Sentiment Indicator warning chart posted 13th October 2016 Post #1776 (Pre-Trump Presidential election) (http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page119)

http://i458.photobucket.com/albums/qq306/Hoop_1/NYA200r%2017052017A.png (http://s458.photobucket.com/user/Hoop_1/media/NYA200r%2017052017A.png.html)

[Joshuatree]

A friend sent me a chart and detail of the S&P 500. Only 4 were positive holding the mkt up , Facebook ,Netflix ,Google and Apple having added $260 billion mkt cap in 2017;the other 496 were in the red having lost $260billion mkt cap in 2017.!!:scared:

[Hoop]

A friend sent me a chart and detail of the S&P 500. Only 4 were positive holding the mkt up , Facebook ,Netflix ,Google and Apple having added $260 billion mkt cap in 2017;the other 496 were in the red having lost $260billion mkt cap in 2017.!!:scared:

Yes partially true...the big companies holding up the S&P500 index
See my NYA200r chart above..That chart shows the percentage of S&P500 companies above the ma200 line..At posting there were 62% companies above their MA200 line..Today it has risen to 66% with the S&P500 index snap back above its MA50..On the surface it may sound a bullish start to another, however the above chart indicators are slow to react to this atm...so caution (regarding this snap back rally) is a prudent action...

[JoeGrogan]

During the last stage of the cyclical cycle (bull or bear) the market goes irrational and ignores it's own checks and balances both fundamental (sustaining over-valuations seem like the new "norm") and Technical (TA indicators throw up "cry wolf" signals)..Investor sentiment rides this irrational wave and believe it will last a long time (Seeing both Fundamentals and Technicals failing reinforces their belief that this is a new era and this time it's all different)...

My Sentiment Indicator works nearly 100% of the time with an average of 2 to 3 day warnings..over the last 2 to 3 years it has successfully predicted corrections which have unfortunately turned out to be very shallow /minor events so resulting in "cry wolf" scenarios..

After a long duration of "cry wolf" scenarios investors lose respect and ignore indicators and the Guru's that use them (e.g Bob Shiller (http://www.econ.yale.edu/~shiller/)) ..that's why so many "experienced" investors/institutions lose heaps of money when a cyclical reversal finally arrives..Their behaviour is "one of denial" they stay investing long with a bull to Bear reversal, and investing short bear to bull.

An interesting thing about the Sentiment indicator chart below:....
Notice during the last S&P500 record breaking high there was a falling trend in the percentage of company's prices above their MA200 line (68%)..This showed up as a caution (-ve divergence) with several TA indicators including the two I use (KST ROC)..

Need all 4 red arrows to trigger the Get Out signal...

Previous Sentiment Indicator warning chart posted 13th October 2016 Post #1776 (Pre-Trump Presidential election) (http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page119)

http://i458.photobucket.com/albums/qq306/Hoop_1/NYA200r%2017052017A.png (http://s458.photobucket.com/user/Hoop_1/media/NYA200r%2017052017A.png.html)

Hey Hoop appreciate the detailed posts. I can't seem to view the second link, is there any chance you could re upload or send me the chart? Cheers

[Hoop]

Hey Hoop appreciate the detailed posts. I can't seem to view the second link, is there any chance you could re upload or send me the chart? Cheers
The second link?? Is this it? Previous Sentiment Indicator warning chart posted 13th October 2016 Post #1776 (Pre-Trump Presidential election) (http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page119)
It works for me??...It links back to Page 119 post #1776 on this thread..
And once again Wall St has cried wolf ....S&P500 snapped back to reach another record breaking high today...Today's StockChart

.Edit: Hmmmm..the link brings up the default DOW chart... need to type $SPX in the box that says $INDU

(http://stockcharts.com/h-sc/ui)

[JoeGrogan]

The second link?? Is this it? Previous Sentiment Indicator warning chart posted 13th October 2016 Post #1776 (Pre-Trump Presidential election) (http://www.sharetrader.co.nz/showthread.php?7257-Daily-S-amp-P-500-INDEX-TRACKER/page119)
It works for me??...It links back to Page 119 post #1776 on this thread..
And once again Wall St has cried wolf ....S&P500 snapped back to reach another record breaking high today...Today's StockChart

.Edit: Hmmmm..the link brings up the default DOW chart... need to type $SPX in the box that says $INDU

(http://stockcharts.com/h-sc/ui)

Sorry i meant the photobucket link, but it seems to be working now that i'm on work internet. Cheers

So essentially the more the S&P500 move sideways without breaking out to new highs, the more chance that a cyclical reversal will occur?

[Hoop]

Sorry i meant the photobucket link, but it seems to be working now that i'm on work internet. Cheers

So essentially the more the S&P500 move sideways without breaking out to new highs, the more chance that a cyclical reversal will occur?

No not necessarily...

It's all to do with the amount of available money..Contrary to belief. the bull market cycle kills itself due to its own success, when everyone is overly optimistic (due to continuing good company/economic news) they become 100% invested...Money is locked into the market and the availability of money becomes less available which causes the market loses momentum ..so it pays to watch the margin calls as investors will optimistically take on loans to continue investing...but after that avenue is exhausted the market just simply dries up....That is why bull market corrections are healthy events as it helps to free up money and creates available money thus increases market momentum build to a new level...The problem with today's Wall St Markets is the lack of decent bull market corrections..a common warning sign in the late stage of the Bull Market Cycle ...

The cyclical Bull to Bear reversal turning point usually goes unnoticed..The 1st stage of the bear cycle is most often only identified with hindsight..Most investors at this time are still very optimistic and think it is an overdue "healthy" bull market correction as the economy is usually still growing at this stage (lagging indicator)...

Charts do show some cyclic reversal behaviours...but the investor should focus on typical warning signs...

Below is a data dump that I'm able to copy and paste from my computer concerning the subject ..Warning signs of Bull bear cyclic reversals..(some of this is old stuff but still relevant).

.Remember that cyclical reversals are rare events there has only been 25 bull to bear cyclical reversals with the S&P500 index in the last 90 years

.................................................. .................................................. .................................................. .........................

Investor Behavioural signs Bull to bear cyclic reversal

Please.. Google bull cycles and bear cycles and read up on it.....it pays to do your own research rather than rely on other peoples summaries

Below is an "off the top of my head" very brief summary to get you going on the subject... I have a 23 point tell tale signs..I wrote it 6 years ago and it's somewhere in my computer... sadly its somewhere among my harddrive digitable mess.. I'll post it when I rediscover it

Mista ...It's very difficult to identify the cyclic reversal to bear as it's happening, you usually pinpoint it with hindsight...

It happens at time when everyone is confident ..when everyone is fully invested in the market.....usually before the economic cycle tops out so everyone is confident about future growth...The reversal starts like any other bull market correction and quickly recovers again as sellers buy back in however as all the buyers have bought "100% in" there are a lack of buyers so there is a lack of available money and the market's momentum fails to rise much above new highs as it has exhausted itself. To add to the exhaustion problem ..the market being at its high point and investor confidence high .. this is seen as an opportunistic time to float companies to the public and list on the sharemarket ..this is the time when we see some investors over extend themselves and borrow to buy more (margin buying)...When another correction eventually happens margin calls are triggered and as investors are "all in", there's more sellers than buyers...This triggers the stage 1 Bear reversal The investors can't believe it and go into denial as the economy could be still be booming and investor confidence is very high... they lament seeing these " silly illogical cheap shares" and unable to average down (buy them)... the market struggles along and may form a double (triple) top....The big falls comes with stage 2 when something triggers the next down wave and with the economic cycle topped out, and slowly one by one investor denial turns to fear.

Lagging shares tend to be the high Div "safe" companies ..."safe" as providing essential services such as Utilities and Healthcare....also some commodity companies do well ...however these companies are not immune to the bear and eventually get savaged as well.

.................................................. .................................................. .................................................. ..........................................

Signs of the end of a cyclic Bull market cycle


1...Average life span 3.8 years..Bull Market's End Overdue:
2...Low Volatility: One might think that low volatility is good for the average investor, but it simply isn't so. "tends to precede powerful reversals that can wipe out investors, as was the case in 2000 and early 2008, Right now, the S&P volatility index, known as the VIX, is about 15, and has been in that low territory since mid-January. The normal range is between about 20 and 40.
3...Short Selling Plummets: ..When you have a market where investors are all in, there will no longer be short covering as there is little available money left.
4...Insider Selling Spiking: Recent insider trading tilting strongly toward selling is a very bearish signal.
5...Very Bullish Sentiment: unusually high sentiment indicators measuring investor sentiment typically signals a market top. Remember Sir John Templeton’s legendary quote: “Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” Sentiment is a powerful indicator of where a bull market is in its lifespan, and sentiment improves with age.
Euphoria comes when expectations broadly are too positive and perceptions too rosy.
6...high P/E ratio
7...Know that when everyone finally concludes things will get better forever, the bull market has now transitioned from mid to late phase.
Media portrays it's readers feelings and when fundamentals deteriorate no one notices (except insiders) until much later when the company reports are released.
8...New Expressions emerge like "new era", "new paradigm", "permanently high plateau", and "end of the business cycle"
9...Paradoxically, future P/E may be low, (due to overly optimistic projections for the next 12-month earnings) ...however trailing P/E and P/E calculated based on averaged earnings over past 3, 5 or 10 years are always high, usually above 20, toward the late phase of the bull market.
10...the overall stock market becomes irrationally exuberant.
11...The most important thing to do in a bull market is to hold. Don't sell your positions too quickly for a small profit; wait until everyone is finally on board and the economic outlook appears rosy.
12...Watch for the lagging (defensive) stocks that keep rising against the leading (cyclical) stocks that are starting to fall....Defensive stocks are typically those in the Consumer Staples, Healthcare, and Utilities sectors;... cyclical stocks are typically those in the Materials, Industrials, and Financial sectors.
13...Increased number of IPO's ... Entrepreneurs time their IPOs at the peak of the business cycle, to take advantage of investor euphoria to raise as much cash for themselves as possible.
14...the IPO quality gets poorer and poorer toward the end of the bull market.
15...Increased Mergers and acquisitions at this point in the corporate-profit and bull-market cycle when “financial engineering” takes over as a driving theme. Here, corporate productivity is already high, the rapid demand surge after a recession is past and profit margins near peak levels, while financing is cheap and cash piled high at companies and private-equity funds. Transactional ferment raises the corporate metabolism, enforcing discipline on the active use of capital, leading to purchases, sales, aggressive share buybacks, spin offs and initial offerings (IPO's) – tipping, eventually, toward recklessness.
16...Beware of rational optimism.,,,, The switch from rational pessimism during the climbing the wall of worry to that of reasoning why the Bull market will continue.
17...Denial of bad news....use of the “rational” excuse to buy up “cheap” shares
18...A long thaw to reality.
19...A change from Bull to Bear cycle is hard to recognise A market top (or market high) is usually not a dramatic event. The market has simply reached the highest point that it will, for some time (usually a few years). It is retroactively defined as market participants are not aware of it as it happens. A decline then follows, usually gradually at first and later with more rapidity.
20...A classic indicator that the Fed has tightened too much is an inverted yield curve (i.e., short-term rates higher than long-term rates).
21...


Ref
the daily ticker..http://finance.yahoo.com/blogs/daily-ticker/bull-market-aging-regain-blush-youth-113902025.html
Money morning..http://moneymorning.com/2013/03/04/five-signs-the-bull-market-is-getting-close-to-topping-out/
Seeking Alpha...http://seekingalpha.com/article/1285341-bull-market-near-end-leadership-questionable
Wikihow...http://www.wikihow.com/Invest-in-a-Bull-Market
Equities.com http://editorial.equities.com/financial-expert/rational-optimism-and-the-bull-market-cycle/
Before its News http://beforeitsnews.com/economy/2013/03/five-signs-the-bull-market-is-getting-close-to-topping-out-2496428.html
Wikipedia http://en.wikipedia.org/wiki/Market_trend
RBA http://rba-llc.com/pdf/80sBullRedux.pdf

.................................................. .................................................. .................................................. ............................................
How to spot a bull market top

by The Investor on June 20, 2013


http://www.sharetrader.co.nz/newreply.php?do=postreply&t=7257
http://www.sharetrader.co.nz/newreply.php?do=postreply&t=7257

http://monevator.monevator.netdna-cdn.com/wp-content/uploads/2008/11/jim-slater-bear-market.jpg
Veteran UK investor Jim Slater is known for his penchant for high-flying growth shares (http://monevator.com/small-cap-investing/). But that doesn’t mean he’s always optimistic.
Slater has lived through many market cycles (http://monevator.com/never-say-never-again/) in his five decades of investing, and like any great investor he knows that shares go down as well as up.
Back in 2008 I found his signs of a bear market bottom (http://monevator.com/how-to-spot-a-bear-market-bottom/) a useful waypoint in navigating the slump.
But Slater has also shared some tips on how to spot a bull market top.
Signs of a bull market top

Most of us will do better not to try, but for those who want to have a stab at stock market prognostication (http://monevator.com/are-shares-cheap/), here are Jim Slater’s signs of the top of a bull market.



Cash is trash (http://monevator.com/cash-is-king-or-cash-is-trash/)

The ‘rubbishing’ of cash and the consequent low institutional holdings are an obvious danger, signalling that most funds will be fully invested.
Value is hard to find

The average P/E ratio of the market (http://monevator.com/valuing-the-market-by-pe-ratio/) as a whole will be near to historically high levels. The average dividend yield will be low and shares will be standing at a high premium to book value.
Interest rates

Interest rates are usually about to rise or have started to do so. In mid-1995, interest rates in both the USA and UK had been rising from historically low levels. Investors were wondering how much further they would rise before topping out.
Money supply

Broad money supply tends to be contracting at the turn of bull markets.
Investment advisers

The consensus view of investment advisers will be bullish (http://monevator.com/the-investor-sentiment-cycle/).
Reaction to news

An early sign of a bull market topping out is the failure of shares to respond to good news. The directors of a company might report excellent results only to see the price of their shares fall. The market is becoming exhausted, good news is already discounted, and there’s very little buying power left.
New issues

Offers for sale, rights issues, and new issues are usually in abundance, with quality beginning to suffer and low-grade issues being chased to ridiculous levels.
Media comment

The press and TV tend to give more prominence to the stock market and to be optimistic near the top. If prices appear high in relation to value, the argument is that ‘it will be different this time’. The few bearish articles that warn of dangers to come are ignored by investors.
Party talk

At the peak of a bull market, shares tend to be the main topic of conversation at cocktail and dinner parties.
Changes in market leadership

A major change in leadership is often a prelude to a change in market direction. Near the top of a bull market, investors often move from safe growth stocks into cyclicals, which they buy heavily.
Unemployment

An interest study by Matheson Securities of ten stock market turning points demonstrated the stock market turned downwards on average about ten months after the unemployment figures began to fall.This is wrong (see ahead of the curve book)
Remember that unemployment is a lagging indicator (http://monevator.com/unemployment-lagging-indicator/).
Want to learn more from Jim Slater? Check out his superb guide for small cap stock pickers, The Zulu Principle (http://www.amazon.co.uk/gp/product/B004G8QHOU/ref=as_li_ss_tl?ie=UTF8&camp=1634&creative=19450&creativeASIN=B004G8QHOU&linkCode=as2&tag=intheblackblo-21)http://www.assoc-amazon.co.uk/e/ir?t=intheblackblo-21&l=as2&o=2&a=B004G8QHOU.

[JoeGrogan]

No not necessarily...

It's all to do with the amount of available money..Contrary to belief. the bull market cycle kills itself due to its own success, when everyone is overly optimistic (due to continuing good company/economic news) they become 100% invested...Money is locked into the market and the availability of money becomes less available which causes the market loses momentum ..so it pays to watch the margin calls as investors will optimistically take on loans to continue investing...but after that avenue is exhausted the market just simply dries up....That is why bull market corrections are healthy events as it helps to free up money and creates available money thus increases market momentum build to a new level...The problem with today's Wall St Markets is the lack of decent bull market corrections..a common warning sign in the late stage of the Bull Market Cycle ...

The cyclical Bull to Bear reversal turning point usually goes unnoticed..The 1st stage of the bear cycle is most often only identified with hindsight..Most investors at this time are still very optimistic and think it is an overdue "healthy" bull market correction as the economy is usually still growing at this stage (lagging indicator)...

Charts do show some cyclic reversal behaviours...but the investor should focus on typical warning signs...

Below is a data dump that I'm able to copy and paste from my computer concerning the subject ..Warning signs of Bull bear cyclic reversals..(some of this is old stuff but still relevant).

.Remember that cyclical reversals are rare events there has only been 25 bull to bear cyclical reversals with the S&P500 index in the last 90 years

.................................................. .................................................. .................................................. .........................

Investor Behavioural signs Bull to bear cyclic reversal

Please.. Google bull cycles and bear cycles and read up on it.....it pays to do your own research rather than rely on other peoples summaries

Below is an "off the top of my head" very brief summary to get you going on the subject... I have a 23 point tell tale signs..I wrote it 6 years ago and it's somewhere in my computer... sadly its somewhere among my harddrive digitable mess.. I'll post it when I rediscover it

Mista ...It's very difficult to identify the cyclic reversal to bear as it's happening, you usually pinpoint it with hindsight...

It happens at time when everyone is confident ..when everyone is fully invested in the market.....usually before the economic cycle tops out so everyone is confident about future growth...The reversal starts like any other bull market correction and quickly recovers again as sellers buy back in however as all the buyers have bought "100% in" there are a lack of buyers so there is a lack of available money and the market's momentum fails to rise much above new highs as it has exhausted itself. To add to the exhaustion problem ..the market being at its high point and investor confidence high .. this is seen as an opportunistic time to float companies to the public and list on the sharemarket ..this is the time when we see some investors over extend themselves and borrow to buy more (margin buying)...When another correction eventually happens margin calls are triggered and as investors are "all in", there's more sellers than buyers...This triggers the stage 1 Bear reversal The investors can't believe it and go into denial as the economy could be still be booming and investor confidence is very high... they lament seeing these " silly illogical cheap shares" and unable to average down (buy them)... the market struggles along and may form a double (triple) top....The big falls comes with stage 2 when something triggers the next down wave and with the economic cycle topped out, and slowly one by one investor denial turns to fear.

Lagging shares tend to be the high Div "safe" companies ..."safe" as providing essential services such as Utilities and Healthcare....also some commodity companies do well ...however these companies are not immune to the bear and eventually get savaged as well.

.................................................. .................................................. .................................................. ..........................................

Signs of the end of a cyclic Bull market cycle


1...Average life span 3.8 years..Bull Market's End Overdue:
2...Low Volatility: One might think that low volatility is good for the average investor, but it simply isn't so. "tends to precede powerful reversals that can wipe out investors, as was the case in 2000 and early 2008, Right now, the S&P volatility index, known as the VIX, is about 15, and has been in that low territory since mid-January. The normal range is between about 20 and 40.
3...Short Selling Plummets: ..When you have a market where investors are all in, there will no longer be short covering as there is little available money left.
4...Insider Selling Spiking: Recent insider trading tilting strongly toward selling is a very bearish signal.
5...Very Bullish Sentiment: unusually high sentiment indicators measuring investor sentiment typically signals a market top. Remember Sir John Templeton’s legendary quote: “Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” Sentiment is a powerful indicator of where a bull market is in its lifespan, and sentiment improves with age.
Euphoria comes when expectations broadly are too positive and perceptions too rosy.
6...high P/E ratio
7...Know that when everyone finally concludes things will get better forever, the bull market has now transitioned from mid to late phase.
Media portrays it's readers feelings and when fundamentals deteriorate no one notices (except insiders) until much later when the company reports are released.
8...New Expressions emerge like "new era", "new paradigm", "permanently high plateau", and "end of the business cycle"
9...Paradoxically, future P/E may be low, (due to overly optimistic projections for the next 12-month earnings) ...however trailing P/E and P/E calculated based on averaged earnings over past 3, 5 or 10 years are always high, usually above 20, toward the late phase of the bull market.
10...the overall stock market becomes irrationally exuberant.
11...The most important thing to do in a bull market is to hold. Don't sell your positions too quickly for a small profit; wait until everyone is finally on board and the economic outlook appears rosy.
12...Watch for the lagging (defensive) stocks that keep rising against the leading (cyclical) stocks that are starting to fall....Defensive stocks are typically those in the Consumer Staples, Healthcare, and Utilities sectors;... cyclical stocks are typically those in the Materials, Industrials, and Financial sectors.
13...Increased number of IPO's ... Entrepreneurs time their IPOs at the peak of the business cycle, to take advantage of investor euphoria to raise as much cash for themselves as possible.
14...the IPO quality gets poorer and poorer toward the end of the bull market.
15...Increased Mergers and acquisitions at this point in the corporate-profit and bull-market cycle when “financial engineering” takes over as a driving theme. Here, corporate productivity is already high, the rapid demand surge after a recession is past and profit margins near peak levels, while financing is cheap and cash piled high at companies and private-equity funds. Transactional ferment raises the corporate metabolism, enforcing discipline on the active use of capital, leading to purchases, sales, aggressive share buybacks, spin offs and initial offerings (IPO's) – tipping, eventually, toward recklessness.
16...Beware of rational optimism.,,,, The switch from rational pessimism during the climbing the wall of worry to that of reasoning why the Bull market will continue.
17...Denial of bad news....use of the “rational” excuse to buy up “cheap” shares
18...A long thaw to reality.
19...A change from Bull to Bear cycle is hard to recognise A market top (or market high) is usually not a dramatic event. The market has simply reached the highest point that it will, for some time (usually a few years). It is retroactively defined as market participants are not aware of it as it happens. A decline then follows, usually gradually at first and later with more rapidity.
20...A classic indicator that the Fed has tightened too much is an inverted yield curve (i.e., short-term rates higher than long-term rates).
21...


Ref
the daily ticker..http://finance.yahoo.com/blogs/daily-ticker/bull-market-aging-regain-blush-youth-113902025.html
Money morning..http://moneymorning.com/2013/03/04/five-signs-the-bull-market-is-getting-close-to-topping-out/
Seeking Alpha...http://seekingalpha.com/article/1285341-bull-market-near-end-leadership-questionable
Wikihow...http://www.wikihow.com/Invest-in-a-Bull-Market
Equities.com http://editorial.equities.com/financial-expert/rational-optimism-and-the-bull-market-cycle/
Before its News http://beforeitsnews.com/economy/2013/03/five-signs-the-bull-market-is-getting-close-to-topping-out-2496428.html
Wikipedia http://en.wikipedia.org/wiki/Market_trend
RBA http://rba-llc.com/pdf/80sBullRedux.pdf

.................................................. .................................................. .................................................. ............................................
How to spot a bull market top

by The Investor on June 20, 2013


http://www.sharetrader.co.nz/newreply.php?do=postreply&t=7257
http://www.sharetrader.co.nz/newreply.php?do=postreply&t=7257

http://monevator.monevator.netdna-cdn.com/wp-content/uploads/2008/11/jim-slater-bear-market.jpg
Veteran UK investor Jim Slater is known for his penchant for high-flying growth shares (http://monevator.com/small-cap-investing/). But that doesn’t mean he’s always optimistic.
Slater has lived through many market cycles (http://monevator.com/never-say-never-again/) in his five decades of investing, and like any great investor he knows that shares go down as well as up.
Back in 2008 I found his signs of a bear market bottom (http://monevator.com/how-to-spot-a-bear-market-bottom/) a useful waypoint in navigating the slump.
But Slater has also shared some tips on how to spot a bull market top.
Signs of a bull market top

Most of us will do better not to try, but for those who want to have a stab at stock market prognostication (http://monevator.com/are-shares-cheap/), here are Jim Slater’s signs of the top of a bull market.



Cash is trash (http://monevator.com/cash-is-king-or-cash-is-trash/)

The ‘rubbishing’ of cash and the consequent low institutional holdings are an obvious danger, signalling that most funds will be fully invested.
Value is hard to find

The average P/E ratio of the market (http://monevator.com/valuing-the-market-by-pe-ratio/) as a whole will be near to historically high levels. The average dividend yield will be low and shares will be standing at a high premium to book value.
Interest rates

Interest rates are usually about to rise or have started to do so. In mid-1995, interest rates in both the USA and UK had been rising from historically low levels. Investors were wondering how much further they would rise before topping out.
Money supply

Broad money supply tends to be contracting at the turn of bull markets.
Investment advisers

The consensus view of investment advisers will be bullish (http://monevator.com/the-investor-sentiment-cycle/).
Reaction to news

An early sign of a bull market topping out is the failure of shares to respond to good news. The directors of a company might report excellent results only to see the price of their shares fall. The market is becoming exhausted, good news is already discounted, and there’s very little buying power left.
New issues

Offers for sale, rights issues, and new issues are usually in abundance, with quality beginning to suffer and low-grade issues being chased to ridiculous levels.
Media comment

The press and TV tend to give more prominence to the stock market and to be optimistic near the top. If prices appear high in relation to value, the argument is that ‘it will be different this time’. The few bearish articles that warn of dangers to come are ignored by investors.
Party talk

At the peak of a bull market, shares tend to be the main topic of conversation at cocktail and dinner parties.
Changes in market leadership

A major change in leadership is often a prelude to a change in market direction. Near the top of a bull market, investors often move from safe growth stocks into cyclicals, which they buy heavily.
Unemployment

An interest study by Matheson Securities of ten stock market turning points demonstrated the stock market turned downwards on average about ten months after the unemployment figures began to fall.This is wrong (see ahead of the curve book)
Remember that unemployment is a lagging indicator (http://monevator.com/unemployment-lagging-indicator/).
Want to learn more from Jim Slater? Check out his superb guide for small cap stock pickers, The Zulu Principle (http://www.amazon.co.uk/gp/product/B004G8QHOU/ref=as_li_ss_tl?ie=UTF8&camp=1634&creative=19450&creativeASIN=B004G8QHOU&linkCode=as2&tag=intheblackblo-21)http://www.assoc-amazon.co.uk/e/ir?t=intheblackblo-21&l=as2&o=2&a=B004G8QHOU.

Cheers Hoop! so much information for me to digest :eek2:

[winner69]

All time high again .......2500 beckons

No worries

[Hoop]

All time high again .......2500 beckons

No worries

Yep...this bull market fossil just keeps on trucking on...and breaking records on the way..maybe it will reach it's 10th birthday and be the first Wall St bull to ever reach this age (only 21 months to go)..the oldest bull lived until 9 years 5 months of age...They said back on 10th march 2017 that this current bull is now equivalent to 133 human years old and no human has lived past 117 (http://fortune.com/2017/03/09/stock-market-bull-market-longest/)

[peat]

now equivalent to 133 human years old (http://fortune.com/2017/03/09/stock-market-bull-market-longest/)
sounds good, but its obviously a poor analogy.

[winner69]

I'm not euphoric ....but maybe I am

As my signature says "When investors are euphoric, they are incapable of recognizing euphoria itself"

The Euphoriameter is creeping higher

[Baa_Baa]

I'm not euphoric ....but maybe I am

As my signature says "When investors are euphoric, they are incapable of recognizing euphoria itself"

The Euphoriameter is creeping higher

The news is a poor source, it just says what it thinks it sees. Better in these times might be to research what the uber funds are doing. It isn't buying, that's for sure. The second longest bull ever is not a setup for eternal prosperity, though it does seem nicely setup for a cataclysmic correction. But you already know that eh winner?

[Hoop]

S&P 500 reaches another record today...

Baa Baa Uber may not be but Vangard still is ...this type of passive investing via Indexed Mutual Funds that mirror market indexs and indexed ETF's is very popular atm
Mauldin Economics (http://www.mauldineconomics.com/frontlinethoughts/what-me-worry) said it all in one of their emails (click the link) labelled What, Me Worry? Quote ..comparing today’s markets to Queen’s classic “Bohemian Rhapsody.”...like the song says, “Nothing really matters” to whoever is buying stocks these days. They just keep buying and pushing prices higher.

[peat]

...comparing today’s markets to Queen’s classic “Bohemian Rhapsody.”...like the song says, “Nothing really matters” to whoever is buying stocks these days. They just keep buying and pushing prices higher.

"Just gotta get out, just gotta get right outta here!" ​ :p

[Hoop]

"Just gotta get out, just gotta get right outta here!" ​ :p

Why the :p Peat..Bohemian Rhapsody is awesome :cool:

Never sell in an up trend they say, and you shouldn't...This very old bull (140 human years old) is now living on in Biblical proportions (length of age, not catastrophes).

What is the future like??... Maybe we have to start thinking the impossible..think Noah and his family of long livers (https://en.wikipedia.org/wiki/Timeline_of_Genesis_patriarchs). When one starts reciting this sort of biblical stuff, it goes to show just how unusually and crazily long this current cyclical Bull market cycle is and it could go on for a long while yet ..eh?......And..against all negative media and technical/fundamental flashing red lights that started to happen a few of years ago we still gotta stay "in" to reap any of the Bull's rewards... From hindsight, leaving the Bull Market using sound logic and common-sense when it got fundamentally overpriced a couple of years ago would have been a big mistake...

At this late stage of the Bull Market Cycle it is very important we start learning or now know all about Fundamentals and the way it operates within a micro and a wider (macro) economic network (Share market Physics)....also using Technical market behaviours to alert us...Put all this together and we have the tools to activate contingency plans so not suffer denial due to market exuberance when the bulls death does finally arrive..

[dela47]

V interesting thread to come across.

Have never delved into equities / exposure outside of NZ/AUS. Last December I was bearish on international equities and the subsequent flow down effects, but there seems to have been nothing stopping markets. Now I find myself somewhat tempted in international exposure given the stellar run of late but always reluctant when the market continues to run ahead of itself for so long...

Apologies if all this has already been covered (new to this thread), but what I have a few questions for learning purposes more than anything:

1) thoughts on ETFs, particularly in somewhere like Europe (appreciate they have risen back a bit but potential for them to move further given PE comparison to the US and comparative growth) ?

2) how do you see a correction playing out if one is to come? Does one big event trigger a built-up re adjustment, or does the smart money say enough is enough and slowly withdraw?

3) how big do you see the effect in NZ should international markets run out of steam?

Appreciate not easy questions- interested in any views! Just trying to tap some better minds than mine . Cheers

[Hoop]

I'll get back to you Dela 47 when I have time..Probably off topic but somewhat related..(sort of):)

I'm was on the ANZ securities when I saw your post (I have 2 monitors)..For people who wonder what ETF's are here's the ANZ securities web page for NZ ETF's trading on the NZX (https://www.anzsecurities.co.nz/directtrade/dynamic/etfinstruments.aspx)..

[Jonboyz]

V interesting thread to come across.

Have never delved into equities / exposure outside of NZ/AUS. Last December I was bearish on international equities and the subsequent flow down effects, but there seems to have been nothing stopping markets. Now I find myself somewhat tempted in international exposure given the stellar run of late but always reluctant when the market continues to run ahead of itself for so long...

Apologies if all this has already been covered (new to this thread), but what I have a few questions for learning purposes more than anything:

1) thoughts on ETFs, particularly in somewhere like Europe (appreciate they have risen back a bit but potential for them to move further given PE comparison to the US and comparative growth) ?

2) how do you see a correction playing out if one is to come? Does one big event trigger a built-up re adjustment, or does the smart money say enough is enough and slowly withdraw?

3) how big do you see the effect in NZ should international markets run out of steam?

Appreciate not easy questions- interested in any views! Just trying to tap some better minds than mine . Cheers

My amateur opinion is that ETFs are a good way to get exposure to an international market unless you've got the means to buy a diversified overseas portfolio. Their has already been quite a movement from US to European stocks over the past few months, but given that the european markets are expected to see greater growth than US markets over the next few years makes it still worthwhile considering eg euf.nz smartshare.

Personally I think there is a correction looming but who knows whether it will be tomorrow or 5-10yrs time. Unless economic political conditions change significantly I think it might be just a small 10-20% dip (I could well be very wrong though!). I'm holding a larger than normal cash reserve at the moment anticipating buying in during a correction.

If if there's a global withdrawal then the NZ stock market is sure to follow in similar numbers i think.

I hold multiple US stocks and have a 60/40 split between US and NZ markets. I'm also looking at buying into an european etf at the 'right' time.

[Hoop]

I read Jarad Dillion's email this morning (The 10th Man)..titled The Everything Bubble. (see webpage version) (http://www.mauldineconomics.com/the-10th-man/the-everything-bubble#) I realised it's been a little while since I last check CAPE.Last time I looked it was 27.4 well into market crash territory..I assumed with good earnings increases and a modest Wall St rise the CAPE should be about the same or fractionally less with a slight trending down (slight derisking)..So I was surprised to see at 29.82!!!...That is scary high..to the point of extreme....Extremes are the result of stupid actions.. and I too have bad feelings ...I've had them for about 2 years now since the CAPE reached the crash zone (25)...since then the market has been like a bug flying around the expressway dodging thousands of windscreens up to now) ...

There is a very long chart argument too..this Bull Market Cycle has had a very steep uptrend for years now and showing the exact same chart pattern behaviour as Bull market cycles before it..a failed attempted cyclic reversal about 80% up the chart mountain..so with this in mind using repeated historic pattern behaviour it looks like we are closing in now to the top..

The S&P500 chart below is copied from the 10th man webpage link above...
8940

The chart below show the history of CAPE note the year 1929 which had asimilar CAPE reading...so maybe Jarad Dillian comment.." it will probably be the fastest downturn in history, owing to the degree of leverage and speculation....may not be as farfetched as it sounds

8939..

[winner69]

That Jared is a pretty good read eh Hoop

This could be ominious -

it will probably be the fastest downturn in history, owing to the degree of leverage and speculation. Proper preparation prevents poor performance


That article on Secular Stagnation is quite interesting

[winner69]

S&P up 9% in 1st half of year

When S&P up more then 6% in first half it kicks on and has a great full year with full year returns from 10% to 30%

No worries

[Jonboyz]

I hope so, but my intuition tells me there will be a correction soon (before the end of yr) A lot of jitters recently in the nasdaq suggest their will be a selloff of FANG stocks, which is likely to lead to the rest of the US market following for a 10-30% correction.

I'm probably wrong but I'm holding onto more cash at the moment waiting to buy during the dip.

[winner69]

I hope so, but my intuition tells me there will be a correction soon (before the end of yr) A lot of jitters recently in the nasdaq suggest their will be a selloff of FANG stocks, which is likely to lead to the rest of the US market following for a 10-30% correction.

I'm probably wrong but I'm holding onto more cash at the moment waiting to buy during the dip.

You worry too much jonboy

Strong 1st half - full year will be brillant

Past numbers below - always happens

No worries

[Baa_Baa]

S&P up 9% in 1st half of year

When S&P up more then 6% in first half it kicks on and has a great full year with full year returns from 10% to 30%

No worries

You worry too much jonboy

Strong 1st half - full year will be brillant

Past numbers below - always happens

No worries

Yellen flagging continuing interest rate hikes in low inflation economy, that's not good. SP500 showing topping signs past 5 weeks. Markets won't like the uncertainty. History is no guarantee of the future and it certainly doesn't "always happen" that 2nd half continues from a rising 1st half.

[winner69]

VIX - 10 of the 20 lowest closes in history have occurred in the last 2 months

Market going through a period of contentment and peace

Cool eh

No worries

[Aaron]

Janet Yellen also says that there will be no financial crisis in our lifetime, so all good for the financial markets then. Pity I didn't buy in earlier.

[Hoop]

Janet Yellen also says that there will be no financial crisis in our lifetime, so all good for the financial markets then. Pity I didn't buy in earlier.



"There is no cause to worry. The high tide of prosperity will continue." ....Quote Andrew W. Mellon, Secretary of the Treasury (Sept. 1929)

[hardt]

A boom created by monetary inflation can never be sustained.

The Fed always lays claim to being the backbone of it's artificial boom... The Federal reserve is pure garbage and is not required for a stable economy, If anything they are a major disruption to an economy.

The yeild curve is pretty scary as well...

[hardt]

"There is no cause to worry. The high tide of prosperity will continue." ....Quote Andrew W. Mellon, Secretary of the Treasury (Sept. 1929)

I'm going to save this one for 2020.

"Would I say there will never, ever be another financial crisis? You know probably that would be going too far but I do think we're much safer and I hope that it will not be in our lifetimes and I don't believe it will be," ... Quote Janet Yellen, Chair of the Federal Reserve. (June. 2017)

[Hoop]

To be fair and taking an overall perspective of the role Central banks I think they have done very well up to about 3 years ago.. since then it's been a "C" pass mark...From my perspective living in NZ at this time, most of the public in NZ never felt the full impact of the 2008 GFC (for NZ much smaller Global recessions had a bigger impact e.g 1991) so most of us are unaware of the scale of this great recession..

Due to the Monetary Policy "smoothing effect" The GFC effects and the afternath recession is still being felt in the large world economies..That give us some idea of the enormity of that crisis...With huge amounts of Monetary easing at a scale never seen before in history the GFC was contained to a very large recession rather than a Great Depression which could have been worse than the 1930-34 GD

The problem with Huge monetary easing (manipulation) it takes a longer time to revert back to "normal"...One worrying long term effects is the various market's lack of automated direction due to Systems network communication disruption, that automatically controls and maintains checks and balances..Uncle Ben ex-FED knew these new super effective untried monetary policy tools had a limited life (3 to 4 years) before the market systems would become out of balance and create bubbles....Its been 9 years now..

The S&P 500 (Wall St) is one effected market ..because of the system interupt (communication channels disrupt) Wall St is steaming onwards and upwards defying all Market checks and balances and Theories.

The FA Guru Elites have been scratching their heads in dismay for some time now at the lack of market recorrections to restore balance to this chronic overvalued market....

For the TAer it is normal business as usual as the medium/long term charts have continued (for years now) to say "no worries" just keep buying and accumulating....

We now reached a point where investors now think this Market is the new "normal".. Joe and Jane Public are entering the market in droves..using the passive route (indexed fund managers and ETFs) and with the increasing Company growth and earnings investors are very happy and disassociate themselves away from the FA Doom Sayers.....DOW theory recognises this behaviour as a stage 3 Bull market...but..the masses now says the simplistic DOW is obsolete in this modern more complex world and they have moved on.

Fundamentally speaking..The Market can stay "irrational" longer than the Fundamentist can stay "rational".....When the Fundamentalist can no longer stand the pain sitting on the sidelines and re-enters....the real fun begins....eh?

[Hoop]

A nice quote....."Don't worry when a bubble shows up. Only worry when a prick shows up"...:D

[kiora]

A nice quote....."Don't worry when a bubble shows up. Only worry when a prick shows up"...:D

Too true!Te he :)

[Hoop]

I'll get back to you Dela 47 when I have time..Probably off topic but somewhat related..(sort of):)

Have a look at my post here (http://www.sharetrader.co.nz/showthread.php?10997-Creating-My-Own-NZX-50-Index-Fund&p=672295#post672295) re: ETFs and other "passive" type managed funds

[winner69]

S&P up 9% in 1st half of year

When S&P up more then 6% in first half it kicks on and has a great full year with full year returns from 10% to 30%

No worries

It's going to happen again .... Full year going to be great.

No end in sight for the S&P going up

[Hoop]

Here we go again!!!...My Sentiment indicator (bar at the bottom of the charts) has gone red... again...

An interesting scenario has developed..Since March the S&P500 Index has continued its bull market cycle record breaking rallies with a decreasing percentage of stocks in their own bull cycle..this downtrending divergence trend is worrying. If this trend continues there will a point in time when the remaining stocks (still in their bull cycles) will be unable to keep the S&P500 index in its uptrend..

9078

[winner69]

More than half the stocks on the S&P500 below their 200MA

Rising tide lifts all boats .......hmmmm

Interesting

[Baa_Baa]

More than half the stocks on the S&P500 below their 200MA

Rising tide lifts all boats .......hmmmm

Interesting

What about the falling tide? 100DMA is in play, will it provide support? SP500 200DMA isn't that far below. So many listed companies beneath their 200DMA, is not a good sign. VIX got some upside as well, the house of cards is looking vulnerable. NZX is bit player on the whipping hose.

[peat]

new high motherflickers
9162

[winner69]

S&P500 closing in on 2500

Time to start talking about 2750 .......then 3000

No worries aw

[Hoop]

...An interesting scenario has developed..Since March the S&P500 Index has continued its bull market cycle record breaking rallies with a decreasing percentage of stocks in their own bull cycle..

Good news...eh ..another record high
The flick side is there are less stocks in their bull cycles than the previous index high (early August).. 65% then.....62.5% now

[Hoop]

Probably why my sentiment indicator keeps crying wolf...Spikes in Volatility: The New Normal (https://insight.factset.com/spikes-in-volatility-the-new-normal?utm_source=hs_email&utm_medium=email&utm_content=56232269&_hsenc=p2ANqtz--3EISQjxFSoQRlzmbSrmSGyXkQZSFZsNgR-DLBjFviGPN-D8EZgLiWq0GmYHisZiuq0McYGMR5zWjqf9D2OWF9g5GGyg&_hsmi=56232269)

[winner69]

Fear and Greed meter almost off the scale - the greed end that is

http://money.cnn.com/data/fear-and-greed/?iid=H_INV_QL

[hardt]

Give this a read guys - http://www.mauldineconomics.com/download/everything-bubble

[peat]

Give this a read guys - http://www.mauldineconomics.com/download/everything-bubble

A common theme is often late to the party, see this weeks Economist cover

9224

Ummmmm wait ..... where was I going with that one?

[winner69]

structural differences this time around

So this time is different

Only a bull market for 'traditionalists' ......no worries for the others

[blackcap]

structural differences this time around

So this time is different

Only a bull market for 'traditionalists' ......no worries for the others

"The US stock market is only up 65% since the peak in 2000 which is a below average growth rate of just over 3%. This suggests a modest valuation. Historically stockmarkets grow at 10% per annum, which since the 2000 peak suggests a potential of 3 times its current level.
US div yields are near middle of valuations too which suggest that the price is fair."
But what would I know :)

[STRAT]

Hi fellas and fellettes. Long time no see.
I see Winner and Hoop have taken to replying to their own posts. We are all gettin older I suppose :p

Hey Trackers, how is Phaedruses S&P500 tracker lookin these days?

[kiora]

It hasn't paid to be a pessimist lately
https://finance.yahoo.com/news/einhorn-wonder-market-adopted-alternative-paradigm-163704878.html

I wonder when sentiment will change?

[kiora]

POO ,inflation,interest rates on the rise.Has the S&P got another 50 % in it?
https://finance.yahoo.com/news/recognize-prepare-end-bull-market-142346695.html

[kiora]

Are you skeptical?
https://www.cnbc.com/2017/11/23/the-stock-market-rally-that-wont-quit-jpmorgan-takes-on-the-bears.html?__source=yahoo%7Cfinance%7Cheadline%7Ch eadline%7Cstory&par=yahoo&doc=104856687&yptr=yahoo

[Jonboyz]

Sector rotation's will be frequent in 2018? Rotating from tech to financial's yesterday.

https://www.marketwatch.com/story/todays-big-drop-in-the-nasdaq-100-will-happen-repeatedly-in-2018-2017-11-29?siteid=yhoof2&yptr=yahoo

[peat]

https://twitter.com/Silver_Watchdog/status/956987153380081664

as he says, "Go ahead, jump in"

9438

[Baa_Baa]

https://twitter.com/Silver_Watchdog/status/956987153380081664

as he says, "Go ahead, jump in"

9438

Incredible, a parabolic SP500 bull market, what could possibly go wrong. I thought it was the bitcoin chart for a moment, only this bubble hasn't burst yet.
:eek2:

[Baa_Baa]

Incredible, a parabolic SP500 bull market, what could possibly go wrong. I thought it was the bitcoin chart for a moment, only this bubble hasn't burst yet.
:eek2:

Only a week later and maybe it has, burst.

Patience, observance, acting on the insights. Easy to say, hard to do.

[Peitro]

Where is Hoop? Would love to hear his take on things right now...

Growth has been so parabolic lately that the last week has only written off one months growth. Any other time we could have been looking at a quarter or two’s growth.

[root]

Looks like a return to a more normal sort of abnormal for this trend. Still trying to confirm what end stage we are in.

9468

[upside_umop]

What do you think you think about this chart? I acknowledge that markets slightly "different this time"; there is less less risk due to better disclosure and information than the historical average period.


9474

[root]

It confirms what we already know, that this market is due a correction larger than the one we are seeing. If it breaks out of the current trading range significantly it would justify the safety measures that we are probably all taking anyway. But I'm not convinced it will happen just yet.

I think this correction is more the result of the abnormal activity through January.

My reading would suggest one of the indicators at the end of a Bull is the belief that each one is "different this time" and will go on for ever.

9475

[Blakie]

Just looking at the daily charts for Apple INC and I see they have broken the 200 DMA for the first time since July 16. Facebook also touched it but found some support.

A good buying opportunity or is there worst yet to come?

9488