The Ten Charts Ignored By Bulls

Tyler Durden's picture

In addition to our recent discussion of the macro-economic data in the US rolling over, and the epic proportions of net risk-taking longs, Credit Suisse outlines ten further indications that equities might be due for a 'consolidation'. Translating from sell-side research gobbledygook into reality, equity bulls are merely demonstrating the traditional phases of momentum-inspired euphoria in the face of ongoing fundamental contraction (not to mention a decline in consumption and marginal US purchasing power) - and earnings expectations, US fiscal tightening, and a modest rise in deficit-increasing real bond yields will not help.

Via Credit Suisse:

1) Global risk appetite is extended

Wilmot’s global risk appetite has risen to 1-sigma (i.e. standard deviation) above its norm, while our equity sector risk appetite is now 0.4-sigma above average levels. Only a month ago, equity sector risk appetite was well below normal levels.


2) Hedge funds’ net long positions are now at the highest level since July 2011 and if anything is more optimistic than sentiment-as proxied by the bull/bear ratio.

3) Equity sentiment indicators are close to a two-year high

Our equity sentiment indicator is close to a two-year high, mainly driven by slope of implied volatility skew (1.1-sigma above norm), inflows into equity funds (0.5-sigma), and bullish sentiment (0.6-sigma).


4) The percentage of NYSE stocks trading above their 10-week moving average has risen to above 80%, the top end of its historical range;


5) There has been a slight slowdown in corporate net buying (though, admittedly, there is a seasonal element to this indicator);


6) Insider (i.e. directors’) net selling remains elevated;


7) Higher beta areas in the market are a little overbought

Cyclicals have rallied strongly relative to defensives, especially in the light of the fact that there has, so far, been only a limited improvement in global economic momentum.


But apart from all that - sure, fill your boots...

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Zer0head's picture

happening Live NOW a Tanker has struck the BayBridge

Freddie's picture

The tanker bumping the bridge should be good for a 150 point rally in the S&P 500.

Dan The Man's picture

probably empty.  sittin pretty high.....coincidentally...I'm sitting pretty high too !

Papasmurf's picture

Sounds like Hazelwood found a new gig.

Dan The Man's picture

Future...traders take a 7 hr coffee break and show up for the 3:30 Algo.

CrashisOptimistic's picture

When HFT algos are 80% of trading, there's no point in returning from the coffee break.

There is no trading.  There are only computers.

Take your money out of the market and keep it out, and that means long and short.  Buy farmland, or if you must gamble, go to Las Vegas.  Forget Wall Street.

The Axe's picture

Tyler the chart that matters the MOST   is not even mentioned.....grab all the VXX  ETF products......The Fed has been  destroying Volatility for 4 years.....Thats how you get the Russell to a new high,,,,Not creating fucking jobs.... 

Motorhead's picture

Charts, bitchez!

Cognitive Dissonance's picture

"Na na na na na. I can't hear you." - Bulls

<Who could've seen it coming." Flattened Bulls>

CloseToTheEdge's picture

imagine the Tylers if this were implimented here?

Turkey Passes Law Curbing Market Comment - Business Insider

: Turkey has had a great economic run over the last several years, and it's government really wants to keep it going.

Perhaps that's why, as Bloomberg reports, the legislators passed a new law making certain types of commentary on markets a criminal offense punishable with five years in prison.

As a result of this measure, SocGen has ordered its employees to stop commenting on the country all together, and Bank of America and Commerzbank AG are figuring out how the law will affect their business.

From Bloomberg

Turkey’s Capital Markets Law enacted on Dec. 31 stipulates punishment for “those who provide untruthful, wrong or misleading information, start rumors, or provide news, commentary, or prepare reports with the intention of influencing prices, values of capital markets instruments or investor decisions.”...


Freddie's picture

Turkey = Muslim country like O's USSA now.

mind_imminst's picture

I have learned to ignore these charts. Shorts have been getting ABSOLUTELY killed over the last 3-4 years. All that matters is central banks printing trillions of fiats. As long as CBs are in turbo-printing mode, stocks will rise in nominal terms (but not when priced in gold/ hard commodities).

SeattleBruce's picture

Yeah, the odds kind of favor the house, don't they?  Not a good place to gamble.  And all the more if you're not trying to gamble.

Dr. Engali's picture

In a centrally planned "market" who needs charts? Just BTFD.

AccreditedEYE's picture

Of course these charts are at "historic" levels.... look at the Fed balance sheet... we're about to go to new "historic" levels on risk assets too. As I've said all day, just BTFD. Jeez... ya act like money actually has VALUE.

Never One Roach's picture

I'm looking forward to the Fed balance sheet doubling again in two years. Very bullish!

pragmatic hobo's picture

... S&P and VIX both down for the day ...

Zen Bernanke's picture

none of those charts mean a thing until the fed stops intervening in the capital markets.

NoDebt's picture

That's..... a lotta charts.  A lot of noisy, volatile charts.

Only one I really keyed in on was #3- the US credit risk appetite line.  The one chart that was thrown up with no commentary!  Look at that spike on the end.

I'm guessing that would explain what's happened with HYG, JNK, etc.  You seen them go damned near parabolic the last couple months?  I'm out of them fully now, but it was a fun ride the last few years.  I'll probably watch them keep right on going, too.  But I'm out.


Joe moneybags's picture

Looking at these charts convinces me that risk appetite, investor sentiment, European cyclicals, and insider buying will all fluctuate this year.

rqb1's picture

last time i paid attention to a chart from a bank was 12 years ago.  

W74's picture

I like the Bulls minus Bears chart (Figure 5?).  Whenever individual investors get comfortable enough to get bullish they almost immediately get smacked down again.  The hedges already have it priced in and individuals arrive on the playing field just as the big boys are about to hit the locker room.

FedMonger's picture

Over the last couple of years risk apetite has been correlated between Equities and Gold. Last year both made gains. January 2012 was the best start to year on record for Gold. This year is looking like the inverse. Not sure if weak Gold will result in weaker Equity Indices. Also there is a maxim as goes January so goes the rest of the year in equities ( with 70-80% accuracy over the last 80 odd years). Here is a snapshot of Gold for this year:  gold,xauusd chart, first 7 days of 2013

DCFusor's picture

If you've been short for years, yeah, you got hammered.  Never learned to trade?  I've made a crapload of money being short this or that for the right 3-4 and then, during that same time.  AAPL and FB come to mind, along with some others.

SeattleBruce's picture

"I've made a crapload of money"

I hope you're putting that crapload into PMs as that's what fiat's going to be in a few short years - a crapload.

ebworthen's picture

Yes, FED/Treasury/Washington/Wall Street bubble part two!!!

So glad I sold that boat anchor of a house and payed off the fuckwads at GMAC.

OMFG there are a lot of believers who are going to lose their shirts, shorts, and underwear all over again when this one pops.

DowTheorist's picture

If physical gold were about to go sky high, the USD and long-term bonds would be in jeopardy. Under such scenario stocks, albeit to a lesser extent percentage wise, would be ready to go up.

Blogger Fofoa, with all caveats and disclaimers, seems to believe that 2013 could witness a massive revaluation of physical gold.

If this were to materialize stocks are going to go up and not down, at least in nominal terms, as happened during the Weimar Republic.

The Dow Theory has signaled a primary bull market on January 2. Such technical bullishness suggests that, at the very least, this is not a stock market to short:



lmile61's picture

The chart shows lots of differences with the time!!!!!! magento development