Down goes the Dow

Where's the Bull?

The S&P 500 has fallen to a level of the 200 moving average.

"Choose your weapon. Valuation metrics best correlated with actual market returns were higher & rising only in Mar 00"

We broke the S&P 200 moving day average.

I find it interesting how the interest in the market evaporates along with some of the recent gains.

Igy

Ghost of Igloi wrote:

I find it interesting how the interest in the market evaporates along with some of the recent gains.

Igy

Cute. Ignorant. Self-important.

Congratulations! You've won the trifecta!

Curt. Over confident. Unbalanced.

Congratulations? You just bonked.

You should have carbo-loaded.

POTO,

Not ignorant at all. People on this thread largely disappear unless the market is going up. It shows a lack of interest or understanding on what moves markets.

Igy

Igy, what moves markets up is when more people buy than sell, and why would people want to buy AFTER the market goes up 10%. But in the latest Investment Company Institute data for the period that ended a week ago, there was a $12.527 billion reduction in public ownership of domestic equity mutual funds. So, basically I see the large commercial S&P traders (people like Goldman Sachs) heavily long and slightly increasing (over 36000 contracts at ~$500,000 per contract) and I see John Q Public pulling out this entire rally, and that is bullish longer term.

All the negative stuff you keep throwing out the market already knows, but the market expects that this will turn around into EPS growth in 1Q-2Q/2016. I do think that if that expected EPS gain does NOT occur, there will be major carnage.

My own emphasis right now is on all those juicy commodities I've been short since summer (added gold 2 weeks ago and palladium last week), but there's an old saying, "the bears have Thanksgiving, but the bulls have Christmas", and if there is a stock market pullback continuing to ~2000 on the S&P, I will be buying BAC and JPM, and looking to rotate out of the two homebuilders we have later. The catch here is that those two stocks we have are up 150% from when I bought them in early 2012 and I don't want to stick people in taxable accounts with a big tax bill.

BTW, our family funds I'm managing are up about 40% YTD, and 33 of those percentage points are from shorting industrial commodities since July. Can somebody explain why I would want to be in cash?

coach d,

Good job on your trades. Commodities are down for a reason. I suspect with a global slowdown your commodity short will continue to be a winner.

I agree that investors are becoming more risk adverse, that has been the difference in 2015. In regards to the commercial traders they are mostly youngsters that have little experience with a serious Bear market so I would never copy their trades. My sense is they will get whipped sawed at some point. You already see it in the hedge fund community. On the other hand, most of the equities of John Q Public are in the hands of wealthy individuals that are older and have seen the downside of the stock market. In the general market you continue to see more blow-ups like JWN, down 15+% in the after market tonight. Or, stocks like SHAK that ran up ahead of earnings crashed in the days that followed. Earnings are not supportive of the most stock valuations. I would keep an eye on GOOGL, FB, and AMZN since they are drivers of the S&P and NASDAQ outperformance. As you know I think the market is grossly overvalued. I plan to stay net short.

Igy

50 day moving average:

DJIA = 17,290

S&P = 2,039

today's econ news

Compared to a year earlier, retail sales were up 1.7% in October.

the Labor Department’s monthly employment report released last Friday showed wages rose 2.5% from a year earlier in October, the highest rate of growth in six years.

Overall producer prices decreased 1.6% in October from a year earlier, the 10th straight year-over-year decline and the biggest annual fall since the government started publishing the series in 2009. Core prices were up 0.4% from a year earlier.

---

this is more of the slow steady growth we've been seeing for several years, although the wages number is better than trend.

John Hussman wrote this on economic indicators back in February:

“The combination of widening credit spreads, deteriorating market internals, plunging commodity prices, and collapsing yields on Treasury debt continues to be most consistent with an abrupt slowing in global economic activity. Generally speaking, joint market action like this provides the earliest signal of potential economic strains, followed by the new orders and production components of regional purchasing managers indices and Fed surveys, followed by real sales, followed by real production, followed by real income, followed by new claims for unemployment, and confirmed much later by payroll employment. Stronger conclusions, particularly about the U.S. economy, will require more evidence, but from a global perspective, these pressures are already quite evident.”

Ghost of Igloi wrote:

John Hussman wrote this on economic indicators back in February:

“The combination of widening credit spreads, deteriorating market internals, plunging commodity prices, and collapsing yields on Treasury debt continues to be most consistent with an abrupt slowing in global economic activity. Generally speaking, joint market action like this provides the earliest signal of potential economic strains, followed by the new orders and production components of regional purchasing managers indices and Fed surveys, followed by real sales, followed by real production, followed by real income, followed by new claims for unemployment, and confirmed much later by payroll employment. Stronger conclusions, particularly about the U.S. economy, will require more evidence, but from a global perspective, these pressures are already quite evident.”

wait, he wrote 9 months ago that there is likely to be an abrupt slowing in global activity? Did that happen? I don't think it happened.

agip,

And that is why China has reduced interest rates, global container shipments have dropped off a cliff, cooper, oil, other commodities at multiyear lows, and the Federal Reserve can't get off zero bond. Oh, and don't forget Mario ready to do whatever it takes. WMT and JWN are just doing swimmingly. Of course we can just buyback some more stock and everything will be ok. You are either blind or kidding yourself.

Igy

Bank for International Settlements:

http://www.theguardian.com/business/2015/jun/28/interest-rates-growth-warning-bank-for-international-settlements

Ghost of Igloi wrote:

agip,

And that is why China has reduced interest rates, global container shipments have dropped off a cliff, cooper, oil, other commodities at multiyear lows, and the Federal Reserve can't get off zero bond. Oh, and don't forget Mario ready to do whatever it takes. WMT and JWN are just doing swimmingly. Of course we can just buyback some more stock and everything will be ok. You are either blind or kidding yourself.

Igy

the chinese economy is growing fast, just not as fast. Even in slower growth mode it will add more to the global economy than it did 8-10 years ago.

commodities: I took at look at oil and copper - consumption of both continue to rise. Perhaps years of investment that has flooded the market. Plus a strong dollar.

manufacturing growth is rising globally, exports are rising globally, credit demand is up...global gdp is growing at 3.3%...

hardly stuff of an abrupt slowdown.

agip,

Perhaps you missed this, less than one day ago:

http://www.cnbc.com/2015/11/12/

Igy

Ghost of Igloi wrote:

agip,

Perhaps you missed this, less than one day ago:

http://www.cnbc.com/2015/11/12/

Igy

that link don't hunt