This page has been archived and commenting is disabled.
This All Has A Familiar Ring To It
The recent new highs on the $NDX accompanying the recent rally off of the August and September lows have been accompanied by bullish headlines. $SPX 2300+, $DJIA 20K, etc. And it is true the action in some stocks is truly awe inspiring.
Yet all the action has an oddly familiar ring to it and it may not be bullish. While most traders today haven’t really lived through the 2000 bubble older hats like me have institutional memory. Back then it was the “horsemen” of stocks that seemed to defy gravity and just kept pushing higher to stratospheric valuations. Yet back then the leadership was ever more narrowing and oddly enough we are now finding ourselves at a very similar spot.
And not only is the leadership narrowing, but it is happening at exactly the same price level.
In the $NDX chart below the horizontal red line is representing the exact same price as 15 years ago, right at the market’s peak of the year 2000. Note the negative divergence on the bullish percentage of stocks in the $COMPQ (click chart to zoom in). New highs with fewer stocks participating:
It is of course the $COMPQ that did not confirm news highs during this recent rally:
Not even close. Does this all point to an imminent crash similar to 2000? I can’t know, nobody can, but we can observe that the recent rally excels in non participation as opposed to participation.
On an equal weight basis both $RSP and $XVG indicate significant weakness:
Insiders are not buying:
And high yield? $JNK and $HYG are not playing along either:
Now here’s where it gets interesting. The leaders that have been driving this rally are vastly disconnected from their moving averages and very overbought. Just a basic reconnect to their weekly 5EMA and 8MAs risks a 5-10% correction in these stocks.
Weekly chart examples:
Extended much? You decide. But all these factors together have a very familiar ring to them.
But before you think this issue is one of tech only, it is not. It’s one of haves versus have nots. And this large negative divergence extends to large cap stocks across the board as seen here in the $OEX:
The big difference now compared to 2000? All the central banks are “all in”, although the ECB may add to its QE program in December.
Last time central banks came to the rescue of a sharply correcting market by cutting rates. Who will be coming now?
»
- 169 reads
- Printer-friendly version
- Send to friend
- advertisements -
Who will come to the rescue? The four horsemen of the apocalypse hopefully...
I've been following the parallels to 2000... blow-off top? There are some way overvalued big names out there that EVERRYONE is in.
Nice chart porn btw.
Janet and her minions are gonna buy it all direct, duh.
Oughta be a real hoot.
Of course it's deja vu all over again. History is a rhyme, stanza after stanza.
Repeat after me:
That is all you need to know and accept. History is a series of rhyming cycles. Looking to 2000 is useful in some regards, useless is most. History will not repeat, but rhyme.
Cycles within cycles within cycles...
From your heartbeat to day and night to the procession of the zodiac, all is cycles.
Yes, you have seen this before. And you will see it again. And again...
I am Chumbawamba.
I hear a giant sucking sound; fools rush in.
Something for nothing and my chicks (and coke) for free.
I cannot understand why anyone would have a single penny in any account with any financial institution. This is the time in economy history when those fail and take your fortune with them. Great fortunes are lost as Great Depressions and other major panics begin. It is not prudent to be invested in anything at those times.
Gold is a marketbasket of currencies, a unversal hedge. That is why it is so loved, it is the only store of value that you can sleep at night owning as economic north turns south.
https://thinkpatriot.wordpress.com/2015/11/11/dynamics-of-national-colla...
https://thinkpatriot.wordpress.com/2015/11/10/a-measure-of-propagandas-p...
Great fortunes are also made in Depressions, there is always opportunity for those who seek it.
That is so true. Being patient and waiting for the right time is the key...
And we are so good at timing are we not? AND that is your gem of wisdom? Being patient and waiting? What the frig are you waiting for? A fake chart or pseudo news analysis? ONLY thing to wait for is the day that you think for yourself. Rest is garbage. Is Cramer going to tell you? maybe Yellem and gang? i would put more faith in the gangs dealing dope to have a pulse on the economy than I would the IMF.
I saw people I know lose 1/2 of savings in 2000-2001. They were truly offended. They took it personally that the fact of their gambling greed pile-on was evaporated.... Paper and greed. And huge propoganda prior to losses. Anyone want to study propoganda stocks and indices? Go back and look at BreX and all of the ace recommendationns and all the run-ups and all the big investment analysts and all the media commentators...study BreX. AND YES this was not a nasdaq stock but get he game plan. BreX was a honey darling analyst darling pump for years. Much like?
Greed, actually is not a very good tool for making decisions, Bullshite is even worse. SO you say be patient. Well I say learn to think for yourself.
I remember that. They were all so offended that they swore off stocks and jumped into RE. Then Greenspan obliged them by blowing and blowing up that bubble too. They never learned the lesson the first time and were doomed to repeat it
It's not patience so much as going by the numbers. A lot of people bought a house at $200k expecting it to go to $300k. Meanwhile, a friend of mine who actually made money in house flipping knew the aforementioned house was worth $100k, picked it up for $25k at a tax auction, did $10k in repairs, and sold it for the "discount" price of $80k.
One person bought the hype, the other used objective analysis and waited for an opportunity. IMO this is what "be patient" means.
That is exactly it, look for value where others are not.
Also, listen, and seek out people who survived the the last depression.
What they have to say is worth spending an afternoon or two or more with them.
If not, read first hand accounts, learn to barter, learn how to do one's own repairs, and think outside of the box.
Off topic: The view of energy of many ZHers:
http://www.theonion.com/article/nation-figured-everything-would-run-some...
Most obvious bull trap ever.
So, do you think that exit door might get a little crowded? It did in 2k.
Most traders today? Since when do they let the kids trade? Since when do the 'kids' have any money to trade with? Nice try, but blaming it on the "kids" isn't really accurate.
Meanwhile...
The Silent Scream Of Collapsing Stocks Continues - Dave Kranzler
http://thenewsdoctors.com/?p=539793
Here are some signs of a coming recession.
1. Business loans for M&A not CAPEX.
http://www.zerohedge.com/news/2015-10-15/there-goes-final-pillar-us-recovery-loan-growth-paradox-explained
2. Factory orders continue to drop
http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row
3. Default risk spikes
http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high
4. M&A set record
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
5. Fed sees 2 bubbles
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
o Commercial Property higher than pre-2007 level.
http://nreionline.com/finance-investment/cre-prices-are-now-officially-above-pre-recession-peak
o Global Corporate Debt Market hits $5 trillion.
http://fn.dealogic.com/fn/DCMRank.htm
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
Tomorrow is Friday the 13th.
Gulp
Not only that, but it's the first Friday the 13'th after the shemitah. I'm sleeping in the bunker tonight.
Actually, today is Friday 13th.
Yep. If we have any kind of a nervous down-tick tomorrow, being Friday and all, Monday morning all hell could break loose.
As far as superstitions go, once a person has a good grasp on how the human mind operates, coincidences such as the one you mentioned, the day of the week being Friday and the date being the 13th, lose much of their sting. Just look at the 'Shemitah' debacle, for example.
IDK, I don't see the mother of all crashes happening for a bit. I think that once corps stop buying stocks back to raise revenues and the US govt finally admits its bankrupt, as well as other nations corrections over 15% are unlikely IMHO. The market, while it claims to price in the future, can be lagging when it comes to imminent threats.
Any attempts at the precise timing of a market dump is futile. We are all guessing. Some get lucky, some don't - few are actually 'in the know', and even those people sometimes screw it up.
Unless you're tweaking Yellen's NIRPles, whispering sweet nothings in her ear and waiting for pillow talk to guide your decisions, you don't know shit. None of us do.
Plan that it will happen and try less to guess exactly when. You are not in control.