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This Is What A Total Breakdown In Market Internals Looks Like

Tyler Durden's picture




 

Below-the-surface breakdowns strengthen BCA Research's conviction that investors should stay defensive. Technically, the S&P 500 looks weak. Breadth has thinned considerably this year. Less than 50% of S&P 500 industry groups are trading above their 40-week moving average and/or have a positive 52-week rate of change.

This is what a total breakdown in market internals looks like...

 

We interpret this week's relatively unchanged FOMC statement to mean that unless payroll data seriously disappoints, a September rate rise is a go. It would buck the historical trend if U.S. equity prices were to come out unscathed in the run-up to a rate rise. This, at a time when the potential for further global growth disappointment abounds.

Bottom Line: Given the weak technical backdrop, there is little incentive to put fresh money to work in stocks at the moment, even despite the lack of attractive investment alternatives.

Read more here...

Source: BCA Research

 

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Fri, 07/31/2015 - 11:15 | 6375501 NoDebt
NoDebt's picture

As I said before, stay the hell outta the market until further notice.  Further notice = Announcement of QE4 (and it better be at least double the size of QE3).

Fri, 07/31/2015 - 11:28 | 6375572 Headbanger
Headbanger's picture

NOT gonna happen

So stay away from bankster windows..

Fri, 07/31/2015 - 11:30 | 6375578 Al Gophilia
Al Gophilia's picture

THIS IS WHAT A TOTAL BREAKDOWN IN INTERNALS LOOKS LIKE

http://www.dailymail.co.uk/tvshowbiz/article-3180820/Kim-Kardashian-mock...

Fri, 07/31/2015 - 11:51 | 6375645 NoDebt
NoDebt's picture

Baby, break down, go ahead and give it to me...

https://www.youtube.com/watch?v=DO2-4YAV8sM

Fri, 07/31/2015 - 11:55 | 6375680 Crocodile
Crocodile's picture

QE4...QE has never stopped since it began; they are just doing through international and back-door mechanisms such as the Belgium bulge.  The proof will be when the FED balance sheet expanded YoY by another trillion plus dollars. 

Fri, 07/31/2015 - 12:16 | 6375776 KnuckleDragger-X
KnuckleDragger-X's picture

At this point, being defensive is more likely to mean filling sand bags and making sure you have clear fields of fire. The next round of QE should be called "The fairy and unicorn conservation fund"......

Fri, 07/31/2015 - 14:33 | 6376296 Model T
Model T's picture

Don't quit your day job as a Framer. You're wrong. this plan is so risky and contains so many unknowns and un-knowables as to be either a.) crazy, or b.) un-doable, or c.) both. Do not attempt to play in the market. You will be like a 6 yr. old girl on a tricycle who decides to play on the Interstate. Not a good idea.

Fri, 07/31/2015 - 11:15 | 6375505 Osmium
Osmium's picture

"We interpret this week's relatively unchanged FOMC statement to mean that unless payroll data seriously disappoints, a September rate rise is a go."

LMFAO, yeah go ahead and raise rates.

Fri, 07/31/2015 - 11:50 | 6375657 Crocodile
Crocodile's picture

Does raising the rate by .1% or even .25% actually count as a raise besides in the "technical" sense?  I think not.  I dare them to raise rates by just 1% and see the world financial system implode on itself.

Fri, 07/31/2015 - 12:18 | 6375784 KnuckleDragger-X
KnuckleDragger-X's picture

Its not about reality, it's about 'optics'.....

Fri, 07/31/2015 - 11:17 | 6375513 knukles
knukles's picture

Nattering Nabobs of Negativism
And Spiro Agnew went to jail, too!  But, that's wishful thinking, no?

Fri, 07/31/2015 - 11:20 | 6375520 JustObserving
JustObserving's picture

despite the lack of attractive investment alternatives.

Gold has become a losing investment thanks to constant attacks by the Fed

The last honest Fed chairman explains:

Paul Volcker: Gold Was the Enemy

“Gold was the enemy to me because that was a speculative vehicle while I was trying to hold the system together. [The speculators] were on the other side.”

Then and now, the gold price is viewed as the inverse price of the confidence in the system. If gold is high, it usually means something is amiss. In Volcker’s time, the high inflation and budget deficits of the 70s propelled gold from a low of $35 before 1970 to a high of $668 in 1980.

http://www.theepochtimes.com/n3/1299447-paul-volcker-gold-was-the-enemy/

Fri, 07/31/2015 - 11:47 | 6375640 Baa baa
Baa baa's picture

Gee, I wish I had a big 'ol mess of the stuff. It may not be the safest place to store wealth but it'll do to until the real one comes along. In fact, speculation in physical might be fun today.

Fri, 07/31/2015 - 11:20 | 6375532 Al Gophilia
Al Gophilia's picture

Not another finance story, please Tyler. WTF happened to Donald or can't you do a follow up on that earlier cat killer story?

Fri, 07/31/2015 - 11:25 | 6375559 pods
pods's picture

The good philosophical debate articles come out just after 10 pm EST.  

pods

Fri, 07/31/2015 - 11:26 | 6375563 NoDebt
NoDebt's picture

Finance stories are sort of what they do here.

 

Fri, 07/31/2015 - 11:31 | 6375582 Al Gophilia
Al Gophilia's picture

You're shitting me, right?

Fri, 07/31/2015 - 11:37 | 6375601 NoDebt
NoDebt's picture

Yes.

 

Fri, 07/31/2015 - 11:44 | 6375629 Baa baa
Baa baa's picture

Are you referring to Hillary's breakfast of rail yard chicken?

Fri, 07/31/2015 - 11:23 | 6375551 withglee
withglee's picture

This is all about timing when the bankers' harvest will actually begin. We need to remove the farming operation itself. Then this kind of timing nonsense wouldn't be necessary.

Fri, 07/31/2015 - 11:27 | 6375569 orangegeek
orangegeek's picture

47% of the NDX is weighted by 10 stocks.

 

37% of same with 5 stocks.

 

yellen bids 5-10 stocks per day for this index.  other indexes are played same.

 

fuck off and die yellen.

Fri, 07/31/2015 - 11:27 | 6375570 asteroids
asteroids's picture

Canada is in a resession. A lot of our stawks have pulled back more than 20% from their highs. Amerikan sinners repent, the end is near!

Fri, 07/31/2015 - 11:29 | 6375575 Fukushima Fricassee
Fukushima Fricassee's picture

Tic Tic Tic Boom

Fri, 07/31/2015 - 11:29 | 6375577 Yen Cross
Yen Cross's picture

  Here's an excellent report from Factset. it's definitely worth the read.

 It covers every sector and statistic, along with forward earnings guidance.

 It's in PDF. format.

Fri, 07/31/2015 - 11:48 | 6375648 cashtoash
cashtoash's picture

when AAPL and GOOG alone account for half of NASDAQ, you don't need too many stocks to go up for the index to go up.  So why is thi a surpise.  QQQ can a lot more to go as long as they big guns are up

Fri, 07/31/2015 - 13:05 | 6375977 Squid Viscous
Squid Viscous's picture

don't forget Scamazon, 250 billion cap and goes up every day

Fri, 07/31/2015 - 14:27 | 6376273 Model T
Model T's picture

It won't do any good; but it's my duty to inform you that ETF's were created and marketed to you; the ignorant retail sucker. It's amazing that you fail to understand the chart of the S&P500 prices. Every rally fails. what part of this is it that you don't understand ? It means nothing that "you don't need too many stocks to go up"---you're trying to convince yourself of your pre-conceived opinion. The rallies are being used as opportunities for the smart money to sell into and eliminate their positions; this is standard practice; it was the same in 1911; nothing is changed.

Fri, 07/31/2015 - 11:51 | 6375662 venturen
venturen's picture

Nothing $10 trillion printed FED dollars can't solve...I mean Japan still exists and they are a lot more broke than we are.

Fri, 07/31/2015 - 11:58 | 6375693 Crocodile
Crocodile's picture

What the FED needs to do is create two FED fund rates; one for the viewing public and the real one for what it is..ZIRP.  That way they can do what they do best; enslave nations with massive debt to kill their sovereignty & keep failing businesses afloat...BTW - Jesus puts it all to an end.

Fri, 07/31/2015 - 12:08 | 6375741 Hongcha
Hongcha's picture

Wouldn't be short.  They will bust to new highs.  It is not a rounding, it is a basing for the next lift off.

Fri, 07/31/2015 - 14:21 | 6376260 Model T
Model T's picture

You're completely and hopelessly wrong. I've shorted the "miracle rallies"; and the "new highs" 7 times in a row now and made money every time. At least look at a chart of the market before you try  to pretend you know what you're talking about. The market is in the final stage; the rallies are being used by the smart money and the big-big players to sell into and get out of their positions. This is why it's essentially falt on top and all the rallies fail.

Fri, 07/31/2015 - 14:37 | 6376312 Model T
Model T's picture

It's a good article; this is what the poor fools who still have their retirement in the Stock Market need to be studying.

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