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It's Bounce Or Else For This Key Stock Market Gauge
We’ve used much of the space here in the past several weeks pointing out the deteriorating breadth conditions in the U.S. equity market. The trend has been so profound it has now reached the point where it could potentially shift from one of short or intermediate-term relevance to something that might impact the longer-term cyclical bull market. One example of this dynamic can be seen in the differential between the NYSE New Highs and New Lows.
This series reached an extremely skewed -462 yesterday (18 New Highs minus 480 New Lows). If this reading gets any worse, it will be one indication that the uptrend since 2009 is in jeopardy. Here’s why:
Note how since bottoming in October 2008 at -1,751 (an all-time low, btw), NYSE New Highs-New Lows has made a series of higher lows. Those higher lows, in October 2011 at -1,175 and October 2014 at -584 line up almost precisely with one another, forming a very distinct UP trendline. That trendline is currently right in the vicinity of the -462 level reached yesterday. Is this just random? We don’t think so.
Note how in the previous two cyclical market cycles, this New High-Low series formed similar trendlines.
In September 2001 and July 2007, cyclical UP trendlines were broken. Of course, these breaks ushered in much more weakness in the stock market over the subsequent 18-20 months.
This is not to say that the long-term bull market would succumb to a straight-line decline when this UP trendline breaks. In fact, when the New High-Low uptrend is broken, it will likely be accompanied by washed-out conditions in the short-term. Therefore, a bounce of some substance may follow that reading before the meat of a cyclical bear market unfolds. This is precisely what transpired the last time we discussed this topic, in October.
In the midst of the October 2014 decline, the New High-Low series broke the shorter-term post-2011 UP trendline. This is what we had to say at the time in anticipation of the event:
It has paid and will likely continue to pay to avoid becoming too bearish from a longer, cyclical-term perspective until this uptrend line breaks. It will likely do so into a “warning shot” sell off as in 2001 and 2007. That is, it will occur into a sharp pullback that, while perhaps too late to warn of that concurrent weakness, will provide a warning that the longer-term picture has changed, for the worse.
That October trend break did indeed serve as a warning shot, in our view. For while some of the large-cap averages have made sustainable new highs since, many of the broader indexes (e.g., Value Line Composite, NYSE Composite, Russell 2000, S&P 400 Midcap), are no higher now than they were at their pre-October highs. Thus, that event served to break some of the momentum of the post-2009 cyclical bull market.
The next break, i.e., a violation of the post-2008 UP trendline in NYSE New Highs-New Lows will be an even more grave event, in our view. It will be one of the first indications that the persistence of the post-2009 cyclical bull market is in serious jeopardy. As of midday today, it looks as if the series did indeed bounce just in time. The question is for how long? We will continue to monitor this as one of the key ‘tells” relating to the survival of the cyclical bull.
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If it's gonna crash, please let it happen while Obama is still in office. I just want to be able to say "Obama's fault" for the next 10 years.
Of course. Shallow minds always want to "blame" somebody or something. It would be nice if things were that simple.
Howsa bout......or else.....just for fun.
Listen, friend, when all that's left is bread & circuses, I want damned tasty bread and one righteously entertaining clown troop.
Will you settle for Cool Ranch Doritos and Dancing With The Stars?
A definite thumbs-up for the humorous turn. I'm with ya on the entertainment -- but only after the fireworks are over.
would all of you still find it humorous if it turns out WE are the entertainment?
We are SO the entertainment
In American retail politics, correlation equals causation. Sticking it to my liberal friends will be fun.
If your liberal friends are anything like mine, the joke will be totally lost on them.
I won't blame 'him', as 'he' is nothing but a fabricated political animal for public consumption. That said, 'he' is going down with this ship, and it will be remembered by Boobus-Americanus as 'his fault'...
It'd be nice if you weren't completely oblivious to what is being said.
Good one. And when (if?) he leaves office, remove the "O" key on all the keyboards in the White House too. That is such an effective little tantrum.
You mean like last time when the outgoing prez could then do what he want while the new one could claim no responsibility for anything?
Careful what you wish for.
Never going down. The Fed and it's agents will be the only buyer if necessary. To the moon and beyond. The Stock "Market" as a key economic indicator will be meaningless, if it is not already.
The fed, always wrong, but never in doubt!
Give me a 100 billion dollars, I'll make this sucker go up......
IMO there are only 3 ways the market crashes.1) WW III, 2) Some State votes to Seceed triggering others to follow, 3) BRICS get the shiat together and start a trade war.
Good God you're the embodiment of the PINKO FASCIST COMMIE and what is wrong with America. It is said you can lead a dog to water but not make him drink. You, silly one, have proved that sage aphorism wrong. Not only have TPTB brain-washed you into drinking, they have convinced you the water is clean and not the piss it actually is. Fool! And forgive me if you are making sarcasm. But your comment reveals an intellectual surrender from the good and true to the evil and wrong. I hope this is not your real essence.
Going down?
Let it be OR ELSE. Pretty pleeeeaseeeee. I've got my popcorn in hand.
I got my ring around the collar, does that count?
Nothing that a few key strokes can't fix!
We live in the modern world, no reality wanted or needed.
It would not be fair... To the 1 percents, 1%
U.S. Mint Resumes American Eagle Silver Sales with 3 Million Ounce Inventory
http://mintnewsblog.com/2015/07/u-s-mint-resumes-american-eagle-silver-s...
Probably fake
The stock market is a casino. Wake up! Buy Gold and Real Estate.
Um yeah, about that... can you tell me when the last time the value of your gold "hoard" was worth more than it was the previous year? But but but reallll value of gold. Sure if the world goes to the crapper in a handbasket you can trade an ounce for a loaf of bread. (Or you could take it with a loaded gun for free).
Meanwhile, the rest of us who are saving for a future where the world doesn't collapse, we invest inside a system where that same $1100 buys 550 loaves of bread...
I give the author credit for correctly identifying the 'BS' market (aka 'Bull') from 2009 to cuurent as a 'Cyclical' one and not a 'Secular' one that so many retarded analysts proclaim on Financial News...