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by Phoenix Capital Research
The market is beyond overstretched at this point on a short-term, intermediate term, and long-term basis. The sheer number of warning signals is staggering. The blow off top out of the rising wedge pattern we noted before is rolling over indicating this is likely a false breakout: The Russell 2000 is lagging well behind the S&P 500. Small caps, in general, should lead a rally if it’s going to [...] Underneath The Surface, People Are Seeing Signs That The Stock Market Is Breaking Down Doug Kass says the same thing today, pointing to “subsurface weakness” in the market. Here are a few points Kass highlights in his note: The Russell 2000 underperformed on Monday (-1.3%) and was down (-0.5%) on an up day on Tuesday. The advance/decline line is eroding as the market’s rise narrows. Breadth disappointed – yesterday, NYSE decliners eclipsed advancing issues by over 200, excluding ETFs and fixed-income [...] Fed Ex sending a signal to “Exit” the markets ? CLICK ON CHART TO ENLARGE Federal Express has been a good leading indicator for the S&P 500 over the past 10 YEARS! Back in 2002, FDX created higher lows and the SPY followed. In 2006/2007 FDX created lower highs and the SPY followed it down. Now Fed Ex could be sending [...] by Phoenix Capital Research
A few weeks ago we commented that the Great Global Rig of 2012 was ending. Yesterday’s GDP print confirms this. We noted in the second half of 2012 that the US Federal Government was engaging in a massive rig to make the economy look better than it really was in order to help the Obama re-election campaign. This showed up in the jobs data as well as the 3Q12 [...] from KingWorldNews: With continued volatility in global markets, investors and professionals are wondering where the markets are headed from here. This piece will provide a huge clue for investors. Today King World News wanted share with its readers key portions from the latest Investors Intelligence report. This is an extremely important piece because it shows a significant expansion in the bullish readings on the chart below, into the stock market’s advance off of [...] From The Big Picture: Interesting divergence between the S&P 500 and Russell 2000 in the month of July. The S&P 500 is in a classic short-term uptrend, making higher highs and higher lows since bottoming in early June. The Russell, however, after making a short-term high in July broke its uptrend line and has been making lower highs. What does it mean? Who knows for certain… and it could be just noise as [...] From All Star Charts: It’s hard for us not to be optimistic going into the month of August. Forget about all of the trendline breaks and multi-decade lows in bullish sentiment for just a minute and let’s just look at seasonality. Specifically, focus on the typical late-summer buoyancy in stocks during election years. According to the my trusty Stock Trader’s Almanac, the Nasdaq has returned an average of 2.7% and the Russell [...] From All Star Charts: … We’re seeing the stock market and momentum behave in a very similar way that marked an important bottom last year. When the S&P500 made new lows this past October, the Relative Strength Index did not. RSI was putting in a higher low, which is a bullish divergence. Sure enough, the S&P 500 rallied 30% into the first quarter and the Russell 2000 ripped 40% higher. I’ve noticed that [...] From Peter L. Brandt: The Head and Shoulders pattern signifies a major trend change. The Russell 2000 and NYSE Composite daily charts completed H&S tops patterns today. The charts below speak for themselves. I have commented on these charts frequently in recent days. Well today, the tops were completed on a closing price basis, and this is significant. Irritating choir boys with their squeaky voices aside, the stock market is putting in a top [...] by thetechnicaltake
In the absence of extreme bearish sentiment (i.e., bull signal) developing, it is unlikely that any upward price move in the major equity indices will last more than a couple of days and it is likely that selling will resume once those prices move towards the recent cyclical highs. Having more bears than bulls at the start of a rally provides short covering fuel and buyers on the sidelines willing [...] From All Star Charts: Here we are three years into this bull market in stocks and the bulls are non-existent. Literally. With the S&P 500 just 2% away from new 52-week highs, this week’s sentiment survey shows the least amount of bulls since September of last year. Do you remember what happened after September of last year? Stocks exploded higher for the next six months = 30% for the S&P 500 & [...] And so the latest Goldman recommendation to muppets is now officially a dud. Closing our Long Russell recommendation with a modest potential loss We are closing our long Russell 2000 recommendation with a modest potential loss, initiated on March 15 following the better-than-expected data in the first of the regional surveys. The recommendation was predicated on (i) still friendly, if not accelerating, US macro data, (ii) supportive monetary policy, and (iii) better [...] By Michael Kahn NEW YORK (MarketWatch) — Fundamental analysts love ratios. Earnings per share, price to book, profit margin — you name it, they’ve got it. But technical analysts like ratios, too, and some of them are telling us a few things about the market that might make for a rough summer. Most investors understand that most, although certainly not all, healthy markets enjoy strong participation by the higher [...] Joe Weisenthal, a contributor to Business Insider, reminds us today of our recent articles (linked below) in saying, “BDI rose again, and it’s basically gone up every single day for 1 month. People love to hype up when it’s going down, but then when it’s going up people stop caring.” He used the 1 month chart (orange) below to illustrate his point. We find this ironic as he himself mentions the [...] From Bespoke Investment Group: For a month or so now, the bears have been arguing that the Dow Transports as well as small-cap stocks have been underperforming… and therefore not confirming the new highs being made in the Dow Jones Industrial Average (DJIA) and the S&P 500. Today, however, both the Dow Transportation Index and the Russell 2000 (small caps) are back to their bull market highs. The fact that… Read full article [...] Nearly buried in the snooze-fest of Friday’s stock action was a swift retreat in small caps, most notably the Russell 2000 RUT -1.57% . The index sank 1.6% on Friday to 802.42, the largest percentage decline this year and its lowest closing value in a month. For the week, it lost 3%, skidding past the large-cap benchmarks. The S&P 500 SPX -0.33% ended up 0.3% for the week. [...] by Thomas H Kee More interestingly, a significant outperformance has occurred recently in the Russell when compared to the Dow. In recent days money flows have been moving out of the more conservative and dividend-paying Dow, and into the Russell. At no time was that more apparent than in the last 30 minutes of trading on Wednesday. Clearly, investors have a higher appetite for risk right now, but something else exists [...] |
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UBS: Pressure Is Building And We Could See A Big Stock Market Sell-Off Before The Year’s Over
UBS technical analysts Michael Riesner and Marc Müller make some grim predictions for the stock market in their latest weekly market commentary.
Riesner and Müller write that the continued outperformance of U.S. stocks versus the rest of the world does not seem sustainable.
From their note:
Last week we highlighted the increasing divergences on the inter-market side between the still resilient SPX and the weak picture in Asian markets, underperforming cyclical sectors, declining inflation expectations, and the [...]