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US Stock Market Breadth Is Collapsing Again
With 1998/99 analogs abounding, we thought it worth looking at a more ominous similarity. The breadth of the US equity market is "narrowing" dramatically; and bad breadth was a big flashing red feature of 1999.
US equity market breadth is the narrowest in over 2 years...
As equal-weight is underperforning cap.weight by 2.4% over the past 12 months - the biggest decoupling since 2008.
This is not the chart of a broad-based beginning to another leg of the bull market.
Charts: Bloomberg
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momentum is declining and participation imploding outside of ETF's and Fundies.
They'll ramp up the high speed trading machines (fueled with free Gov. PPT funds) somehow to make up for 'lack of breadth.'
My guess is that they are and have been buying directly for some time now. Masked through the primary dealers.
Not enough fluoride in the world can treat this bad breadth. Stinks like death.
What a controlled stock market....
Chinese tried this and it didn't work.
And the Chinese though they could rig it better because their economy is highly controlled.
Stock buy-backs will be a bitch on the way down. Oh the pain.
So far they've been very successful at gunning the strategic stocks and sectors to keep the markets propped... take a look under the surface at the big number of stocks and sectors that are under their 200 DMA's - this is an incredibly thin market
The stock market is simply another Potemkin facade...consider the story of China's shopping centers as a great example of the retardation that is passing for "growth"..
This China Shopping Mall story deserved a broader context and deeper dive...consider:
http://econimica.blogspot.com/2015/10/explosion-of-china-shopping-centers-for.html
The Middle Kingdom's electricity consumption YoY is negative. The eCONomy is in a recession, i.e., hard landing, but it will NEVER be reported or acknowledged.
Amazingly true - China is heading directly into a CRE subprime-like meltdown and not even this raises an eyebrow...China's oil consumption is likely peaking (permanently) this year or next...the response is a collective "yawn"!?!
No human or FOMC can violate the 1st Law of Thermodynamics with impunity.
Bad breath all the way to DOW 20k !!!!!!!
Hey ... Bad breath is better than no breath at all.
DIPPY LIVES!!!
This is not the chart of a broad-based beginning to another leg of the bull market.
Why not?
Somewhat unrelated.... But a great summation of a looming problem for China... Food.
http://goo.gl/snvPLG
2nd?
I thought just made it easier to manipulate.
The biggest key to making money in the market is not losing it. Anybody who didn't hedge back when we were dithering for 5+ months around the all time high, whilst Yellen et. al. were promising the first rate hike in 8 years, has rocks for brains. Whatever they lost in the dump, it's their own fault. As of now, I don't care if we broke shorts and have valid technical targets at new all-time highs, this Draghi ramp is not healthy. What if Yellen is feeling her data-point Wheaties and hints on Wednesday about raising in December after all? We could see a replay of October '87, that's what. This reliance on the ass wind of monetary central planners is going to end badly. If the market keeps ramping, at best it will be an inflation hedge play. But physical PMs will perform much better for people who got in at these lows. /trading advice
This is how it happened in 2001. There was a peeling away of the onion. Slowly at first, the harder to defend equities were cast aside and allowed to fail. Then at the end they let the core fall too ... but even though the core fell, it survived while those outside layers of overpriced fraud just died, never to be heard from again.
We have been seeing this happening. The best run, most solid balance sheet companies that will be able to weather any storm did not participate in the ascent, but they also have not been participating in the fall, to the same degree as the weak high fliers.
Those companies that are really charitable organizations and ONLY survive on the good graces of well to do advertisers ... will be purged. If not today, then maybe tomorrow.
The real question is: "How much will be left from which to start the next cycle" ... or will the old, solid names have to support everything?
In a few months the Fed will inject another higher dose of QE.
Ever higher doses of QE until the patient dies.
Dr. Ben Carson and eighteen thousand in the DOW coming right up. And no one gives a hoot if anyone believes it's real or not.
Didn't anyone see the full moon tonight? Go outside and look east at sunset, young man.
Doesn't anyone doubt the Chinese are going to nuke the U.S. over those sandcastle islands? How could we think otherwise? I hope they pour a big one right into Washington D.C., vaporizing the MADE-IN-CHINA MLK monument. No one in the Obama Adminstration thought anything about losing face over that amazingly stunning embarassment.
Let's stop fooling ourselves. No amount of gold is going to prevent the Chinese from being egged on. They have face to save.
We all know how that works. Too predictable, way too predictable. And, hey!!! If Vladimir can get away with it, well Hell! The Chinese are sure to show the world they're twice as butch as any Russian like our man in Moscow, Vladimir Putin. LoL
WWiIi is going to be a quick one. Just don't get in the way, because it's gonna be a scorcher.
It's Japanese who have face to save. Chinese must make money and turn air yellow.