"There Are Too Many Warning Signs": Why One Trader Thinks Stocks Are Set To Slide In The Coming Days

Tyler Durden's picture

From the latest Macro View edition by Bloomberg macro commentator and former Lehman trader, Mark Cudmore

Stock markets look set to continue to slide in the days ahead.

There are too many small warning signs building up at a vulnerable time for markets. Just because a 3% correction hasn’t happened for a long time doesn’t mean that one isn’t possible. Quite to the contrary, it suggests there are a lot of complacent longs that may over-react to a pullback.

It’s also important to emphasize the proviso that the three pillars of the secular bull market remain solid: growth, earnings and liquidity. There’s no obvious reason to turn structurally bearish, but that’s not the same as thinking that every dip needs to be bought instantly.

After a tremendous year of gains, the S&P 500 is particularly vulnerable to profit-taking as Thanksgiving Day and the looming debt-ceiling issue provide further complications to the implementation of a potential tax reform package.

China has been the engine of global growth, but Monday’s disappointing credit data will make investors nervous that the much greater policy focus will now be on deleveraging - and that will weigh on Asia broadly.

Japan has been a bellwether for the most recent equity gains, but last week’s volatile hiccup and subsequent price action look very bearish technically. After a parabolic gain the past two months, a pullback here would only be a healthy consolidation in the grand scheme of things.

European equities are leading the correction already, while U.K. stocks will remain under pressure from domestic politics and Brexit talks.

At this time of year, there are plenty of traders who’ll only need a nudge to take 2017’s profit and move to the sidelines. In contrast, there’s a dearth of reasons for fresh bulls to join in now.

Sometimes in markets you don’t need one headline catalyst to shift sentiment. Equity markets fall just because there are more marginal sellers than buyers.

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lester1's picture

ROKU is on fire!! Easy $$$. :)

Steve Scuba's picture

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syzygysus's picture

You don't need to click the link, Scuba Steve jams his snorkel up his backside, gargles and backflows ghost pepper sauce while livestreaming it on snorkelhub.com

 

ArmaG3don's picture

It's a clear sign in my head that it's party like it's 90s.

ArmaG3don's picture

This time MTV is youtube.

BritBob's picture

Been saying this for some time. Only a question of when?

BandGap's picture

Are you OK, Bob? Nothing about invading Spain or nuking Argentina?

She left with the pickup truck and the credit card, Bob. Get over it.

Crazy Or Not's picture

Theresa DisMay's the new dumpster diving trollop of Eurostan....
It takes some getting over from ruling 1/3 of the Globe.... feels for you Bob - "its been emotional"

wintraiz's picture

Been saying this since Dow was at like 10,000.  So, if he kep sayng it maybe we can see another 200% rally from here in the Dow.  

stecha's picture

Mark my word, 15 days after the yuan/renmimbi becomes top world currency the US will start defaulting on credit and the pension plans will self implode almost unstoppable..

Crazy Or Not's picture

Not sure about the timeline there stecha. Losses Mount (below) has a point. The Ponzi will use FED fiction to carry on dealing BarterTown tokens til the gig is totally exposed...which could be some while - during which time many things will happen .... 

Crazy Or Not's picture

Dancing Israelis are just booking their next tour ..... 
"The City behind Door number Three is....."

all-priced-in's picture

Will the yaun/renmimbi still be pegged to the dollar?

 

/s/

CJgipper's picture

BS.  They're printing even MORE than the fed.  You probably have it backwards.

losses mount's picture

In a land where 21 trillion dollars goes missing and no-one bats an eyelid, the market need not go down for years if that's the plan.

https://www.bing.com/search?q=21+trillion+missing&pc=MOZI&form=MOZLBR

It's not a market, it's criminal activity.

Crazy Or Not's picture

Solari report is one that's worth the subsription.
“undocumentable adjustments”.... Yup!!! 

LawsofPhysics's picture

Correct, and business is booming...

moral hazard is a real motherfucker like that.

Hal n back's picture

Considering that since 1983 debt growth has exceeded claimed deficits by 8 trillion, the 21 trillion is not a stretch.

Tubs's picture

Find Lithium/Cobalt/Gold miners outside of the USA, park your cash and wait for the carnage.

Current bull run on Australian Junior miners in the Lthium/Cobalt/Nickel space (some below also have huge gold tenements). Check out on ASX these guys under 100M MC, 10X multibag potential (note I hold these and this is not financial advice).

ARL

CLA

PGM

SYA

everything1's picture

How do we invest in outside country exchanges?, just find one and send $?

mily's picture

Yes it could slide, but only after 10AM Wed morning after the VIX option price settlement index VRO price is set at ~<10.50, 

Yours truly,

VIX Futures Spec Net Short team 

wintraiz's picture

This ONE TRADER has been saying a lot of incorreect things for a long time.  We all here hope he gets something right eventually. 

wintraiz's picture

The fact is day after day the analysts at Shepwave keep calling the correct market trades. they dont keep speculating that one day this big crash is going to happen. The markets have quadrupled in the time that this doomsday scenario has been on its way according to one trader and ZH. 

Hal n back's picture

And we have value investors who cannot find value to invest in, and growth investors whose growth companies do not have growth.

Its the greater fool theory in action, which works till it does not.

Anti-kleptocrat's picture

... it's just the holiday draw-down ... these clowns want everyone to think they actually know something ... wrong, wrong, wrong ... 

Lost in translation's picture

When traders talk, people listen.

J J Pettigrew's picture

We always get these predictions...

But THEY will get stocks to close on the HIGH OF THE YEAR (all time highs) at the end of the year......

We have all seen this....the Santa Clause rally......yipppppeeeee!!!

vofreason's picture

I hate to say it's true but I believe it is also.  I have hope for January being the washout the way it was a few years ago but I think you're right that it'll continue through year end at least.........at this point I'd give you a finger (well,... a pinky) to be wrong, it's maddening.  

Cash Is King's picture

The powers that be won’t let this mkt correct, crash or anything in between until it suits a purpose ie depose Pres. TWTR!

shizzledizzle's picture

Yea, and the NY FED desk sees every warning and acts accordingly with their black hole balance sheet. 

LawsofPhysics's picture

"one trader"...

"market"...

LMFAO!!!

 

Dragon HAwk's picture

Whatever Should happen Won't, too many people are betting against it.

  the Odds Create Reality.

Rex Andrus's picture

2:1 short wins. This is a no brainer. ACA wiped out people's disposable income, double digit unemployment for the rest. The holidays are going to be skint for the 99%. Everybody hates AmazionCiaFbiMsm. The false flags will continue until obedience improves. Markets will disappoint but there will be a rally in the basket of FUD, when the sun enters the 7th house and Jupiter aligns with Mars.

CJgipper's picture

Which is why the fed will print.  and can never stop.

Ajax-1's picture

 

"There Are Too Many Warning Signs": Why One Trader Thinks Stocks Are Set To Slide In The Coming Days"

Huh, Since when do fundamentals actually matter?

order66's picture

The Buyback and Sell Volatility trade unwind is going to crash everything.

https://static1.squarespace.com/static/5581f17ee4b01f59c2b1513a/t/59e8a9...

Honest Sam's picture

I'm going to go out on a very long limb here to make a prediction:

I don't know with any degree of certainty What the fuck is going to happen in the stock market, gold, cobalt, Cocoa, BTC, bonds, interest rates, or the weather by year end. Hopefully, I'll at least be able to use my travel miles to get down to Mexico for some Vitamin D on my skin.

Beat that. 

innertrader's picture

Grand Caymon? lol

 

SETH RICH?

TRIUMPH with TRUMP!!!

innertrader's picture

OVER THE LAST 10 YEARS how many bullish vs bearish comments have been posted on ZH?  Come on... someone provide that stat?

 

SETH RICH?

TRIUMPH with TRUMP!!!

backwaterdogs's picture

Bearish = 6,432,129

Bullish = 3

In meantime stock market is up 4x.  Thanks zh.

everything1's picture

Sure they might slide a bit and maybe the holiday season will give some more insight to how tapped out the consumer driven economy is .. or isn't. 

But, the economy does not slow down so quickly, and the economy is a world economy and it's on fire.  Until the easy money train slows down it's going to be full speed ahead.

Still, when one easy money train pulls back the reigns hard, it's pretty likely the others will to, it's going to bust but not until we get substantial rate hikes and slow down money creation. 

Obsidian Samctum's picture

There needs to be punishment for wrong market crash predictions so that the next motherfucker to play chicken little will think about it very carefully before running his mouth.

Punishment should be death or have his assets liquidated.