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The Chart That No Stock Market Bull Wants To See
The omens are not good when momentum and quality become highly correlated, warns SocGen's cross-asset research group.
Quality is now essentially price momentum and vice versa, and history tells us when these two strategies collide the omens are not usually good, as it is a phenomena usually associated with equity markets turning bearish. This becomes even more evident when they plug the factors into their bear market indicator...
Simply put, we are in a bear market!
As ScoGen's Andrew Lapthorne notes,
...when you view the US equity market through the prism of investment style performance (which as we stated earlier is one of the useful features of factor indices), you can see that investors are positioning themselves EXACTLY as you would expect if faced with an economic deceleration. The 20 day correlation between our US quality style and commodity prices has averaged ca. 60% since November last year, and prior to that the correlation was effectively zero.
So as we have said many times, investors may be buying equities because they have few alternatives, but they are clearly economically bearish.
Source: Societe Generale
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Oh man, those charts make my pants feel tight.
I don't understand but agree thoroughly!
I don't have any idea what this chart means, but I think it's bullish...I'm going to increase my DOW holdings
That 401k money still pours into these peoples hands every week. They are required to put it to work. They have no choice other then to join the unemployed.
Often wrong, never in doubt. Story of my life.
I gotta buy something and I got a real good deal on these magic beans......
Probably a classification tree overfit by SocGen over too few business cycles, but, sure.
I don't mean to point out the elephant in the room, but I think we're getting the much anticipated but not expected "10% correction" in stocks right now.
That should be sufficient to get Janet & Co. peeing in their Depends and starting to make noise about "lower for longer" again.
10% unless somebody panic's and that's becoming more possible every day. The driver will be the FED and where and how much money they throw at the problem which will decide how bad and how fast....
Panic only sets in when the margin calls start flowing. Or the debt rating covenants start being breached. That's all I look for any more- anything that smells like systemic contagion. Nothing less will make a lasting dent.
I'm kind of watching the carry trade, those people are starting to sweat a little, but really bonds is the ticking bomb that a lot players are edging away from......
You should see the special Extra-Strength model they had us (at gunpoint) design for them. We are sworn to secrecy (again at gunpoint) but let's just say titanium plays a significant role. And don't you worry, when the time is right we will swab them with a specially formulated flesh-eating bacteria.
Is that second one a chart or a used maxi pad?
Well guess what Mr. Soc Gen MBA - a FUCKING BULL MARKET doesn't require 7 years of ZERO FUCKING INTEREST RATES. A bull market doesn't need the WHITE HAIRED GARDEN GNOME and her merry band of economic TWATS and CUNTS buying the FUCKING market with QE1, QE2, QE3 and soon to be QE4. What bull market said "HEY, GIVE ME SOME FUCKING TARP" so I can continue to be a bull.
You know the shit house is about to burn when even educated (cough, cough) economists believe the SENILE COOT'S bull shit about a bull market. Bitch please.
I feel like you're holding back. Please feel free to tell us what you really think.
Quit sugar-coating this with politically correct bullshit!
The "market" didn't get the message.
Something to consider
Withholding Tax Collections Have Collapsed But Unemployment Claims Are Still At Record Lows
http://wallstreetexaminer.com/2015/08/withholding-tax-collections-have-collapsed-but-unemployment-claims-are-still-at-record-lows/
The record lows in claims are inconsistent with the sharp drop in withholding tax collections. It suggests that regular weekly incentive pay, such as sales commissions at some retailers, auto dealers, and the like, has collapsed over the past month. If that is the case, then it won't be long until the layoffs begin.'
NFLX the first $60 billion negative cash flow company in history, uncharted waters ...
It is different this time.
Bear markets are so 20th century.