This page has been archived and commenting is disabled.

CS Warns Volume & DeMark Raise "Topping Threat" In Stocks

Tyler Durden's picture




 

The 1900 target for the S&P 500 that Credit Suisse since the start of the year but are seeing increasing signs of a market top with a meaningful correction lower likely to emerge. Volume divergences, DeMark clusters, and reversal days all point to weakness and, as CS concludes, a break of 1844/34 (for the S&P) could lead to a decline to 1800 and then to 1768.

 

Via Credit Suisse,

Indeed, not only has the market all but achieved our 1900/10 target (Friday's high was 1897), but the subsequent rejection from there has seen a bearish "reversal day" complete on increased volume. Below 1863 is needed to keep the immediate risk lower for a test of key price support at 1844/34 – the March lows, rising 63-day average and 38.2% retracement of the February/April rally and "neckline" support. Despite all our fears of a top, only a move below here would see a bearish reversal confirmed. If achieved though, we would look for a decline to 1800/1798 initially, and potentially as far as the mediumterm uptrend and rising 40-week average, currently seen at 1778/68.

 

While 1844/34 holds, no top will complete, keeping the trend higher.

Volume did not confirm the new high

Whilst market breadth has been trending and continues to trend higher, the volume picture has also shown signs of deterioration over the past few weeks after having previously been steadfast. Not only did Friday see increased volume for the "reversal day", but cumulative OnBalanceVolume (our favourite volume measure) has been trending lower since early March, and more importantly shows a bearish divergence, again warning of a weakening bull trend.

Exhaustion signals have been present for a while

In addition, as we have highlighted on several occasions, the more aggressive DeMark Combo indicator holds daily, weekly and monthly "13" sell signals. The more widely used sequential indicator also holds a weekly "13" sell signal, although it should be noted, not daily or monthly signals.

With Defensives also starting to show signs of further improvement relative to Cyclicals, and Large Caps completing a base relative to Small Caps, we remain of the view that at the very least a potentially important rotation trade is underway and more realistically a top may be close to constructing.

In summary, our 1900/10 core bull target has been all but achieved, but we need to see a break below 1844/34 to see a top established.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 04/08/2014 - 15:41 | 4636688 Truther
Truther's picture

All good. At least in our dreams. Keep stacking that golden metal instead though.

Tue, 04/08/2014 - 15:48 | 4636703 kliguy38
kliguy38's picture

BTFD you muppets.......

Tue, 04/08/2014 - 15:57 | 4636725 Soul Glow
Soul Glow's picture

So many asset classes to short, so little time.

Tue, 04/08/2014 - 16:04 | 4636739 fonestar
fonestar's picture

What happened to all the Bitcoin articles in this joint?

 

Such empty.  So vacant.  No wow.

Tue, 04/08/2014 - 16:06 | 4636747 AmericasCicero
AmericasCicero's picture

Spending a little bit too much time with your dogecoin?

Tue, 04/08/2014 - 16:09 | 4636754 negative rates
negative rates's picture

Barf!*

Tue, 04/08/2014 - 16:30 | 4636814 Thought Processor
Thought Processor's picture

 

 

Oh just "Pull it" already.  Let's get on with it.

 

 

 

 

Tue, 04/08/2014 - 19:19 | 4637385 Carpenter1
Carpenter1's picture

Won't kill me to toss 3k into a 3X short ETF. If it drops 20% I won't care but I'll sleep well knowing I'm in for a 50 bagger when this pig finally rolls over. Yeah, yeah, FED will print, I know. Been 5 years and people are starting to get off the bus, be a cold day in Hades if I'm with the fools still on this bus when it goes over the cliff.

Tue, 04/08/2014 - 16:09 | 4636755 Soul Glow
Soul Glow's picture

Bitcoin died fonestar.  Died and went to currency heaven, as so many have before it.

Tue, 04/08/2014 - 16:10 | 4636763 fonestar
fonestar's picture

Oh.

Tue, 04/08/2014 - 16:12 | 4636766 negative rates
negative rates's picture

We bow wow to thee decline of bitcoin, although I do have 8 percent of my portfolio in cocaine, just not bitcoin.

Tue, 04/08/2014 - 16:15 | 4636783 Mr Pink
Mr Pink's picture

Credit Suisse?? WTF do they know??

I only listen to investment advice from a dude wearing a green jumpsuit with a brocolli floret on his chest

BTFDYFI !!

Tue, 04/08/2014 - 15:43 | 4636693 NOTaREALmerican
NOTaREALmerican's picture

Uh, oh.   More charts.

Where is that dirigible omen?    And the black swan death cross?   

Is that Jaws music I'm hearing now, or just the airconditioning fans?  

Tue, 04/08/2014 - 15:49 | 4636700 Gringo Viejo
Gringo Viejo's picture

I believe it's called the "Hinneyburger Omen" or something to that effect.

Tue, 04/08/2014 - 15:52 | 4636717 Mr Pink
Mr Pink's picture

Everyone here knows the market is rigged but we still get articles about chart reading and technicals...

Where's my nailgun??

Tue, 04/08/2014 - 16:09 | 4636757 DoneThis2Long
DoneThis2Long's picture

But charts show you where and how, they are "aided"

And would you like a 9MM, 40mm, or 45mm cal "nail gun"? unless you live in Wash DC in which case it will have to be a 16 Penny cal .... :)

Tue, 04/08/2014 - 15:52 | 4636716 ebworthen
ebworthen's picture

Jaws music only for those who try to short this floating pig.

It has 9 lives and swims like Flipper.

Tue, 04/08/2014 - 16:08 | 4636753 BandGap
BandGap's picture

Did someone say NINE LIVES???????

http://www.liveleak.com/view?i=6b4_1311101116

With music!

Tue, 04/08/2014 - 16:02 | 4636731 NOTaREALmerican
NOTaREALmerican's picture

Re:  And there it is...

Sure, but that won't stop the (D)umbasses from wanting more government to stop climate change.

It's like (R)etards wanting more government to stop the fornicating-harlots. 

So, there it is and there it goes...

Tue, 04/08/2014 - 16:10 | 4636761 Dr. Engali
Dr. Engali's picture

I'm sure that certain global warming alarmists that frequent here will be quick to dismiss their claims. After all there is a consensus, and we all know that a concensus makes it so.

Tue, 04/08/2014 - 16:11 | 4636762 NDXTrader
NDXTrader's picture

Strangely, the official ZH line is that they support the global, government confiscation scheme some call "global warming", although that has now been 1984'd to "climate change" - which of course means anything you want it to mean

Tue, 04/08/2014 - 15:48 | 4636702 buzzsaw99
buzzsaw99's picture

DeMark Combo sounds better than chicken bones and goat entrails.

Tue, 04/08/2014 - 16:12 | 4636771 Pareto
Pareto's picture

and the already seen 16 times Hindenburg Omen

Tue, 04/08/2014 - 15:49 | 4636705 ebworthen
ebworthen's picture

What?  Volume did not confirm the high?  Even with our HFT algo friends churning and rotating everything?

Is there not enough fat in the cream, not enough sugar in the cotton candy spinner?

Is the next crash to clean 401K/I.R.A. chips off the table imminent?

Only the Harpies and Warlocks of Wall Street know.

S&P 666 true valuation!

Tue, 04/08/2014 - 16:14 | 4636780 negative rates
negative rates's picture

Well just tag along with that great race.

Tue, 04/08/2014 - 15:50 | 4636709 monopoly
monopoly's picture

1844/34 OK got it. No problem. Get back to ya.

Tue, 04/08/2014 - 15:51 | 4636711 Bill of Rights
Bill of Rights's picture
Holder to Gohmert on Contempt: ‘You Don’t Want to Go There, Buddy’ - See more at: http://www.cnsnews.com/news/article/melanie-hunter/holder-gohmert-contem...

Holder to Gohmert on Contempt: ‘You Don’t Want to Go There, Buddy’

http://www.cnsnews.com/news/article/melanie-hunter/holder-gohmert-contem...

Tue, 04/08/2014 - 16:05 | 4636744 DoneThis2Long
DoneThis2Long's picture

That exchange speaks volumes about the state of this nation. Period.

Under any other, former administration, that POS ... Holder ... would have been kicked out the office so hard, he'd be bouncing all the way into the suburbs of Wash DC ... before even slowing down. That fuck, is addressing US, when addressing one of our Reps, in particular in the context this played out. Instead, most likely, there is a fucking fruit basket and a bottle of uber expensive "beverage" awaiting him, from his boss, and on our tab, congratulating him for standing up to the peeps in Congress, Republican above all!!!

WTF .....!?!! What a disgrace ....

Tue, 04/08/2014 - 16:13 | 4636774 Dr. Engali
Dr. Engali's picture

Holder is an arrogant prick, and the repukes are a bunch of cunts for not taking him down.

Tue, 04/08/2014 - 15:51 | 4636713 Stoploss
Stoploss's picture

It's a lil toppy, a lil bit.

Tue, 04/08/2014 - 15:54 | 4636721 Ewtman
Ewtman's picture

We're not far away from the top of a deflationary collapse. That's not really news. But the degree to which that collaspe will affect the markets is news. The current downtrend may very well be the beginning of a major bubble-busting decline lasting years.

 

http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...

Tue, 04/08/2014 - 15:58 | 4636726 mrliquid
Tue, 04/08/2014 - 15:59 | 4636727 Seize Mars
Seize Mars's picture

Yes the DeMark indicator is looking ominous.
There's also that whole Fraudocracy Indicator, too. That thing's a little toppy.

Tue, 04/08/2014 - 16:07 | 4636749 TheRideNeverEnds
TheRideNeverEnds's picture

guess this means the bottom is in; BTFD!

Tue, 04/08/2014 - 16:20 | 4636800 drinkin koolaid
drinkin koolaid's picture

That useless fat fuck DeMark's forecasts are as accurate as the Federal Reserve Guidance. No way is the major top at hand ---- YET.

Tue, 04/08/2014 - 16:22 | 4636803 GrinandBearit
GrinandBearit's picture

Since when has volume mattered?... 1995?

It will crash soon enough.

Tue, 04/08/2014 - 16:34 | 4636815 Bam_Man
Bam_Man's picture

Does that DeMark Combo come with fries and a soda?

Do NOT follow this link or you will be banned from the site!