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"Coiled Spring" Stock Market Likely To Disappoint In 2016
2015's stock market range (from high to low) is among the narrowest since World War II. This 'compression' has led the horde of asset-gatherers and commission-takers to suggest that stocks are a "coiled spring" ready to burst higher from this newly-formed permanent plateau. However, as S&P Capital IQ's Sam Stoval notes, that is the exact opposite of what to expect based on history. In fact a narrow range year is typically followed by a low return year, not a high return year.
Anyone expecting a jump in the Standard & Poor’s 500 Index after its relatively narrow range this year may be disappointed, according to Sam Stovall, S&P Capital IQ’s chief U.S. equity strategist. As Bloomberg reports,
The chart below shows how Stovall drew his conclusion, by tracking percentage gaps between the S&P 500’s closing highs and lows each year since 1945, as compiled by S&P Dow Jones Indices. He divided the differentials into five ranges, from smallest to largest, and calculated the index’s average percentage move in the next year for each range.
This year’s gap is 14.3 percent, which would fit in the narrowest band of Stovall’s “high/low predictor.” Years with similar stability were followed not only by the smallest average gain the next year, as the chart illustrates, but also by the smallest proportion of advances: 57 percent. Comparable figures for other ranges were as high as 79 percent.
“If you thought that a narrow annual trading range would be akin to compressing a spring that led to a jump in the following year, you can forget it,” the New York-based strategist wrote.
“In other words, 2016 will likely endure increased volatility, but without much in the way of price appreciation to show for it."
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"Fucking Brilliant!"
BTFD
I'm all in
Coiled spring? More like a 50+ man with out viagra.
Who needs viagra ?
Anyway , good cocaine works much better.
So someone told me.
Don't need either.
As we huddle shivering in our fallout shelters, the voice of merica radio program will proudly inform us that the DOW broke 50k.
That will take an airburst over Manhattan island.
A true melt up rally.
Lets hope krugmans windows get blown out on that one
So this being opposite day, take a long correct?
Whatever happens you can be secure in understanding that it has nothing to do with a free and fair market.
This fucking "market" will continue to behave this way after all life forms on earth are extinct.
I doubt the markets will last another 1007 plus years; do you?
The markets are no longer predictable based on the past because they are controlled and the corruption is not even hidden anymore because they do not need to when the players are few and the people are distracted and the government is no longer functioning as intended.
Therefore, if the TPTB wanted the S&P to gain 10% this year, then it will. If 10% decline, then it would. How hard is it to predict that by the end of the trading day on Thursday, all the major market indices will show slightly positive to even for the year. Maybe even .5-1% higher just for the psyche sake?
What about all the money on the sidelines? You know, the 1's and 0's that yellen has yet to create?
The Janet is planning a mild increase in asset prices, with mild volatility to satisfy all these "value seeker" whiners, while the Fed raises rates excruciatingly slowly.
She hopes and prays the economy will recover over the next year or two while she does this.
That is all.
The Janet don't speak "coiled spring".
However America's stock market does in 2016, it's unlikely to compare with the complete devastation of the Russian ruble (rubble) market.
Recall that the ruble traded at 57.8 per dollar on Jan. 1 of this year. It's 73.5 at the moment, or down more than 27% against the dollar in just one year.
Yikes - Vlad's popularity is going to go through the roof on this one! The state-controlled RT.com needs to do another survey showing conclusively that the ordinary citizens' complete impoverishment has bolstered Vlad's ratings once again.
You speak as if the corporate media whores here in the US aren't in bed with the criminals in DC... You are also operating on the faulty assumption that Russians somehow will sell themselves cheap for short term gain.