Master trader Clark: A huge market reversal is beginning
In October, total margin debt on the New York Stock Exchange climbed to a new all-time record of $412 billion. In other words… investors have borrowed the most money ever to purchase stocks as the market hits new all-time highs.
What could possibly go wrong with that?
The Last Two Times This Happened, Things Didn’t End Well
Stunnning Chart: Today’s Stock Market is Eerily Reminiscent of 1929…
Ken stops short of predicting that stock markets will do the same thing this January as they did in 1929, but take a look at this amazing comparison and decide for yourself if it’s possible that this whole thing will break wide open on or around January 14th of 2014:
Chart by McClellan Financial Publications via Modern Survival Blog
Could be nothin’… But what if?
The World Is Upside Down: CIO Of Buffett’s GenRe Issues Direst Warning Yet
A world, in which former permabears David Rosenberg, Jeremy Grantham and now Hugh Hendry have thrown in the towel and gone bull retard, and where none other than the Chief Investment Officer of General Re-New England Asset Management – a company wholly-owned by Warren Buffett’s Berkshire Hathaway, has issued one of the direst proclamations about the future to date and blasts the Fed’s role in creating the biggest mess in financial history, is truly upside down.
Engulfing bearish patterns in Europe…Will it spill over to the States?
CLICK ON CHART TO ENLARGE
The above 3-pack looks at long-term patterns in France, London and Germany. Each chart reflects attempted breakouts is at hand, for these major markets.
The gray boxes take a very short-term snap shot of each market at the resistance and the red oval highlights“engulfing bearish patterns” in these key markets.
What goes up in a down market? Correlation!!!
If the worlds markets don’t succeed breaking out at the same time, could the majority of the turn weak at the same time since correlation is so high? Stay tuned…
Another Hedge Fund Legend Returns Cash To Investors Due To “Lack Of Investment Opportunities”
While hardly as spectacular as Hugh Hendry’s supernova flameout, or the far more boring, slow motion conversion of the assorted other famous and less famous bears, a legendary hedge fund titan has decided he too has no use for excess capital in this broken market. No surprise then that Institutional Investors’ Alpha reports that Baupost’s Seth Klarman is returning $4 billion in capital to investors for only the second time in its history due to “a lack of investment opportunities.” And watching how the epic farce that Bernanke’s wealth effect known as the Stalingrad & Poorski trades in the last 30 minutes of every day nobody can blame him. And no, Klarman is not returning cash due to some hidden underperformance: “Baupost’s many partnerships were up 13 percent, on average, through the September quarter. Its annualized return since inception is in the high teens.” This happens to push it in the top decile of all hedge funds in 2013.
U.S. mortgage applications fell 12.8%
US Retailer Hell In One Chart
The chart below from the WSJ, summarizes perfectly the hell that US retailers find themselves in. In brief: sales down and inventories soaring, means liquidation sales have to surge, while profits and cash flows crater.