Just Three Charts

Forget valuations...

(because they can always be shrugged off by using 10Y forward estimates with some hockey-stick extrapolation)

These three charts are the real worries for anyone about to play the 'greater fool' and pile the remaining cash in their retirement savings into stocks...

Deutsche Bank's Binky Chadha notes that US equity positioning is extreme (+1.5sd above average levels). Mutual fund positioning has risen in tandem with the rebound in growth to a 6-year high, with cash balances well below the historical normal range...

Aggregate shorts in cash equities and ETFs, led by cuts in Tech shorts, have for the first time fallen below the elevated range they have been in since the financial crisis...

Margin debt in brokerage accounts has risen to extremes...

Option market indicators had till last week painted a similar picture, with skew and correlation down sharply, especially at near term maturities, and the put/call ratio low. Inflows into equities have surged recently and are on track for the largest monthly inflow on record. But equity inflows have lagged far behind those to bonds through the cycle and also through the rally over the last 15 months, suggesting plenty of room to catch up.

From a fundamental perspective, we see equities as having priced in the rebound in US and global growth, the corporate tax reform and as having gotten a little ahead.

To summarize - for the hard of reason - There's no more shorts to squeeze as ammo for the ramps, there's no cash on the sidelines, and those that are already in are the most-levered to gains in the history of stocks.

"Probably nothing..."

Comments

eclectic syncretist NidStyles Fri, 02/02/2018 - 15:20 Permalink

As a person who's obsessively studied markets during the timeframe of these charts, I can say from experience that this is a low key sell-off today, and real panic isn't here. 

The general way these things unfold is for multiple sharp swings up and down for weeks and even possibly months as a prelude to gravity kicking in. We haven't even started the sharp swings yet. Unless today is the first one, anyway.

In reply to by NidStyles

Sudden Debt eclectic syncretist Fri, 02/02/2018 - 16:12 Permalink

Yep, I don't see anything either.

Earnings will be damn good even for Q1 and it might even cause another idiotic shortsqueeze if to many try to short this market.

And companies do have cash, the only thing is that accounting has changed and that cash has been put in the books as reserves for a certain investment (I don't know the english word)

They have the money but it's reserved without a obligated goal. And that makes it taxwise a very good decision.

 

 

In reply to by eclectic syncretist

TeethVillage88s Fri, 02/02/2018 - 15:08 Permalink

Peasantization of USA.

*** When you have no role models that educate, inform, illuminate, describe our system processes, the background of systems & laws, tell of the funding, training, resources, assets, facilities of programs operated by govt and congress, tell of the problems of past legislation in detail *** Well then You Turn to Homer Simpson and Cartoons for role models and icons and talking heads or Chinese like stereo types to use for making your point ***

All Risk No Reward NidStyles Fri, 02/02/2018 - 15:44 Permalink

Nid, already done. Try to outbid the OWNERS OF THE PRIVATE MEGA-BANKS THAT CREATE MONEY BY INDEBTING PEOPLE AND THE CONTROLLERS OF THE FEDERAL RESERVE SYSTEM.

TALK ABOUT INSIDE BASEBALL AND TRADING!

How To Be a Crook
https://www.youtube.com/watch?v=2oHbwdNcHbc

Poverty - Debt Is Not a Choice
https://www.youtube.com/watch?v=t7BTTB4tiEU

Renaissance 2.0 The Rise of [Debt-Money Monopolist] Financial Empire
https://www.youtube.com/watch?v=96c2wXcNA7A

Debunking Money
https://www.youtube.com/watch?v=5iBSBVew-3Y

In reply to by NidStyles

All Risk No Reward eclectic syncretist Fri, 02/02/2018 - 15:48 Permalink

This is just a distraction to keep people's minds off the FACT Banker-financed Obama and Bankster-financed Comey created a false narrative that Hellary was under criminal investigation in order to help Bankster-promoted ($2 BEEEEELYUN, pinky at edge of mouth) Donald J. Trump secure the Presidency as their #1 controlled opposition candidate.

Everything I said is TRUE, BUT NOBODY IS TALKING ABOUT IT - NO EYES TO SEE REALITY.

Why Trump and why now? BECAUSE THE BANKSTERS WILL BLOW THE DEBT-MONEY BUBBLE UNDER TRUMP AND TRUMP WILL BE BLAMED.

SINCE HE'S "OUTSIDE" THEIR CAREFULLY CRAFTED AND CONTROLLED FAKE TWO PARTY PARADIGM, THE BANKSTERS WILL BE ABLE TO RETAIN THAT FAKE TWO-PARTY PARADIGM AS A KEY CONTROL MECHANISM OVER THE MINDS OF MUPPETS.

In reply to by eclectic syncretist

revjimbeam eclectic syncretist Fri, 02/02/2018 - 17:05 Permalink

Meh...the american people accepted their 'leaders' were spying on them with disinterested yawns. what the fuck do they care if their 'leaders' are spying on each other...its the same shit thats always gone on, just no one gives a fuck to hide it anymore. There are no consequences.diddle kids? Whatever. Steal 7billion in hatian aide? Amateurs. Use intellligence and military assets to spy on and undermine a political opponent. Just par for the course...

In reply to by eclectic syncretist

HushHushSweet Bad Goy Fri, 02/02/2018 - 15:20 Permalink

Yes, I noticed that, too. It's the same on all the business channels. Carnage on the markets, but no-one making the connection to the release of the memo. They all obviously have their talking points and are afraid to veer from them. 

So where's the money going? Only Amazon is up to any appreciable extent.

Where's all the money going?

 

In reply to by Bad Goy

TeethVillage88s TabakLover Fri, 02/02/2018 - 15:14 Permalink

What ?  We had a 2008 Global Financial Crisis... Potential Global Output fell.  Actual Output fell.  And we never recovered.  And instead of Deleveraging... we leveraged up $60 Trillion Globally and something like $6-9 Trillion in Oil and Gas.  Tee Hee.

- What Problem other than no way to deleverage and all fiats money stock expands while Debt jumps to the moon

In reply to by TabakLover

All Risk No Reward TeethVillage88s Fri, 02/02/2018 - 15:59 Permalink

Teeth, as you may know, this is how debt-money systems function.

If I lend you $20 of a brand new debt-money currency @ 5% interest, you will owe me $21 in one year's time due to double-entry bookkeeping adjustments that add $1 interest liability to your balance sheet and $1 interest asset to my balance sheet.

In one year, you owe me $21, but only have access to $20. Now, I could let you have access to the $1, but that would MAKE ME BROKE (ARE THE MEGA-BANKSTERS AND THEIR MEGA-CORPORATE FRONTS BROKE?) and it would mean I couldn't seize the collateral you put up for the loan (homes, roads, national parks, electric companies, whatever).

It doesn't matter if it is $20, $20 million, $20 billion, $20 trillion, or even more - THE MATHEMATICS WORKS EXACTLY THE SAME WAY IN EVERY SINGLE CASE!

Now, if I have ambition, I won't just lend $20 out one time and asset strip one person. I will lend another $20 out to someone else. Let's say you work for that someone else and earn enough to pay back your $21 debt before it comes due.

Now the 2nd person has $19 (you took $1), but owes $21 to me after 1 year.

The debt rose exponentially, from $1 to $2. Exponential debt, Bitchezzzzzz...

BTW, I just DESCRIBED INFLATION FOR YOU, AND I ALSO TOLD YOU THE ROOT CAUSE AS TO WHY THEY MUST INFLATE OR THE SYSTEM COLLAPSES.

NO MUPPET ECONOMIC TEXTS TELL THIS **TRUTH** THAT IS EXPOSED SIMPLY BY APPLYING 5TH GRADE MATHEMATICS TO A BASIC BALANCE SHEET MODEL.

What do we know about exponential growth? IT CAN'T, BY DEFINITION, LAST FOREVER - SO THERE IS A KNOWN END GAME.

BTW, in a debt-money system, the end game correlates TO THE MAXIMUM AMOUNT OF DEBT OUTSTANDING BACKED BY THE MAXIMUM AMOUNT OF COLLATERAL.

You see, I don't just want to steal your house through this fraudulent debt-money scheme.

I WANT TO STEAL THE WORLD, BITCHEZZZZZZZZ!

Well, I don't... BUT THEY DO!

Problem is, MUPPETS ARE MUPPETS... THEY CAN'T EVEN ADMIT TO 5TH GRADE MATH, AND THE MORE YEARS OF SCHOOLING THEY HAVE, THE MORE UNCRITICAL AND IRRATIONAL THEY TEND TO BE!

And the few who are able to actually apply 5th grade mathematics to this real world problem, well, they are entrenched in their (but I can eat in any restaurant I want, what's the problem?) short-term selfish attitude and go about their day as though nothing is wrong.

Well, chit is gonna happen, it is gonna happen under Trump, and the MUPPETS WILL PRETEND LIKE THE DEMOCRATS AND REPUBLICANS ARE LEGITIMATE AS THE MEDIA TELLS THEM IT IS THEIR FAULT FOR ELECTING AN "OUTSIDER" LIKE TRUMP.

===============

How To Be a Crook
https://www.youtube.com/watch?v=2oHbwdNcHbc

Poverty - Debt Is Not a Choice
https://www.youtube.com/watch?v=t7BTTB4tiEU

Renaissance 2.0 The Rise of [Debt-Money Monopolist] Financial Empire
https://www.youtube.com/watch?v=96c2wXcNA7A

Debunking Money
https://www.youtube.com/watch?v=5iBSBVew-3Y

In reply to by TeethVillage88s

MusicIsYou Fri, 02/02/2018 - 15:10 Permalink

Charts don't matter to two kinds of people: the super smart and the super dumb (which is the greater). Dumb money sees the Dow going up up and that's all they see, and they pour their money in. Stock markets aren't FDIC insured.

Deep Snorkeler Fri, 02/02/2018 - 15:11 Permalink

Americans feel doomed and trapped,

in a collapsing empire,

in a phony/unproductive economy,

an unwinnable Afghan war,

informed by deformed info,

locked in a LSD world of Facebook/Twitter,

Legos unbuilt, flying backwards.

Anonymous (not verified) Fri, 02/02/2018 - 15:14 Permalink

Maybe this is the beginning.

Maybe this is another short-squeeze.

Maybe interest rates don't matter.

Maybe they will ZERO OUT the rate change and debase the $USD further, faster.

Seems like the whole modern world is in a race to see who reaches rock bottom fastest.