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Van

Is the Bull Market FINALLY over?

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So it looks like the major indices, after spending the last 12 months churning to marginal new highs, have finally turned down.

More importantly, the internals have begun to break down.

 

DJIA 17,200.

 

 

Discussion:

Are the Weinstein indicators saying Bull or Bear?

http://www.alltimehighstocks.com/p/weinstein-indicators-bull-bear-markets.html

 

1. SPY stage analysis: NEUTRAL (moving to bear soon?)

 

http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=SPY&uf=0&type=64&size=2&sid=9864&style=320&freq=2&time=9&rand=418254556&compidx=aaaaa%3a0&ma=1&maval=30&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1

 

2. $NYAD

http://stockcharts.com/h-sc/ui?s=$NYAD&p=W&b=5&g=0&id=p07313556463

divergence - BEAR.

 

3. Internal Market Momentum: BULL (still just)

http://stockcharts.com/h-sc/ui?s=$NYAD&p=D&b=5&g=0&id=p50395118458

 

4. New highs vs New Lows

http://stockcharts.com/h-sc/ui?s=$NYHL&p=W&b=5&g=0&id=p77082224047

below zero - BEAR

 

5. World markets - BEAR

http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=VEU&uf=0&type=64&size=2&sid=2635545&style=320&freq=2&time=9&rand=88629616&compidx=aaaaa%3a0&ma=1&maval=30&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1

 

 

6. Lead Stock AAPL - BEAR

http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=AAPL&uf=0&type=64&size=2&sid=609&style=320&freq=2&time=9&rand=556887658&compidx=aaaaa%3a0&ma=1&maval=30&lf=1&lf2=0&lf3=0&height=335&width=579&mocktick=1

 

 

7. Price:Dividend ratio - BEAR

http://www.multpl.com/s-p-500-dividend-yield/

(although I question the usefulness of this indicator nowadays)

 

8. Herd sentiment - NEUTRAL

http://www.aaii.com/sentimentsurvey

 

 

 

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The phrase "The great 2009-2015 bull market" looks increasingly like taking it's place in the history books.

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Tony C still seems to think we could see new highs in the months to come.

 

His Buy Target is SPX-2040, and i may take profits (on Puts) if we get there in the next day or two

 

The Bradley model called the May/June high effectively (so far)

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I think the markets can go either way - it's just pausing for breath after a nice run. Not a bubble blow off top or overbought that's my opinion. But we might see a correction. I have my stops, and not gone so long that I can't sleep at night.

 

Most people are off on their holidays now - so that is probably why there is a pause. The most volatile months are September and October, I believe, so no need to panic just yet.

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A Major Cause of the Financial Crisis Is Making a Comeback

One of the biggest causes of the financial crisis is back.

Subprime lending is surging.

Subprime loans are made to people with bad credit. They’re riskier than traditional loans. Lenders charge higher interest rates on subprime loans to compensate for the higher risk.

Subprime lending exploded in the early-to-mid-2000s and fueled the housing bubble. When people couldn’t pay back these expensive loans, the housing market crashed.

It sparked the biggest financial crisis since the Great Depression…and almost took down the whole US financial system.
• The subprime mortgage market is almost dead…
Subprime loans account for just 0.25% of the mortgage market today…down from 26% in 2006.
Banks have mostly gotten out of the subprime mortgage businesses. New regulations make it difficult for banks to make subprime loans.

• …But subprime lending is making a comeback.

Lenders aren’t giving people subprime loans to buy houses much anymore. Instead, they’re giving subprime loans to people to buy cars… and to buy stuff on their credit cards.

The Wall Street Journal reports that subprime auto and credit card lending has surged to its highest level since before the financial crisis.
…[M]ore than one-third of all auto, credit card and personal loans from the start of January to the end of April went to subprime borrowers, according to the latest available data from credit-reporting firm Equifax Inc. That is the highest percentage since 2007.

Lenders made 53.7 million auto, credit card and personal loans in the first four months of 2015, up 46% from 2010.
Subprime auto loans are growing fastest...

 

(received by email)

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Nicole Elliott, who has made some good calls on the market...

 

Has put a chart in today's SCMP business section, with this title:

 

Chart of the day: Bearish pressure on the Dow - pg.B2

INDU

x-INDU_zpszx7z4myv.gif

"Downside pressure this week saw bearish momentum increase on all US indices, although none were oversold.

More importantly, it set off a death cross (50-d MA below the 200-d MA) on the Dow Industrials, which joins...

 

DJTA : The Dow Transports which crossed in March. Not the end of the world since it might cross back to bullish like...

DJUA : The Dow Utilities has done.

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If you want to use Crossovers as indicators, careful observation is critical ... update : 2yrs

x-INDU-10yr_zpsofudf2wk.gif

 

OTHER 10 year charts : SPY : IWM : XLF : DJTA

 

(will comment later)

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The US markets are holding up admirably, but it's carnage elsewhere.

 

On it's 7th consecutive downday, if the FTSE takes out the 6430 July low level then it could quickly collapse.

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The US markets are holding up admirably, but it's carnage elsewhere.

 

On it's 7th consecutive downday, if the FTSE takes out the 6430 July low level then it could quickly collapse.

 

I agree - it looks like FTSE is at a key level now : FTSE : 6,469.27 -57.02 : -0.87%

 

FTSE_zpsphm6oj4w.gif

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FTSE closed at 6403. Looks hugely vulnerable to further downside now.

 

Follow-through today, down to 6370 now. While I expect a short-term bounce, the long term downtrend is now firmly established.

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I am out of everything now in my trading account, and sitting on cash which cost me the dealing charges, and locked in a small profit. I don't like the VIX which is upto 24. I follow Dan Zangers twitter as well, and he's in 92% cash right now - so he must be onto a good thing.

 

I had a nice littlevwindfall from the Labour election as well.The world can go to hell in a hand basket now.

 

Good luck in playing any bounces, I'll be watching strictly on the sidelines.

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European markets gapped down 3% on opening.

Let's see if it's an intermediate bottom.

Today should be interesting one way or another.

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I'm pretty certain from conversations I'm having with average-joes, and the generally defiant "we'll bounce back" tone of the press that we HAVE seen the top now and that, short-term bounces aside, we are certainly heading much, much lower.

 

It's tradition that a new Fed chair has a crisis in their 1st year or 2.. I think that pattern is now playing out again.

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Is this Yellen's big test?

****

 

 

If you believe in omens, the this sort of thing happens whenever a new Fed chair comes in:

Volcker: entered office 1979, forced to raise rates to 20%+ shortly after
Greenspan: entered office Aug 1987, => Oct 87 crash
Bernanke: entered office 2006, Financial crisis began 2007, cumulated in 2008-09 meltdown

Yellen: enter office 2014... next crisis is in the post?

 

http://www.cnbc.com/2013/12/04/beware-the-curse-of-the-new-federal-reserve-chair.html

 

""You could have safely sat out the first three years of Volcker, Greenspan, and Bernanke's respective tenures and made all/even more of the market's return in the remainder of their time on the job."

 

=> start buying equities in 2017?

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Yeh - but since 2008, the Fed's priority has been to protect the stock market.

 

The fat cats won't want to change that.

 

Already plenty of calls to rule out Sept rate hike "in order to protect investors".

 

Economic reality is only a side issue nowadays.

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Impossible to make sense of today if one is an investor and not a trader. I dread to think how many retail investors ran for the hills today and sold off their holdings to the traders who promptly sent the price right back up again. Tomorrow, they'll probably short it all again . Unless th ordinary man in the street understands that the markets are now controlled by short-term traders they won't stand a chance.

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Some big HF's and institutional investors using STOPS will have been hit today also

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