Visualizing The Real Test For Market Bulls (In 1 Simple Chart)

As StockBoardAsset shows on the 24-year monthly ratio chart below, bulls have pushed the S&P:VIX price into uncharted territory this year.

The REAL test for sustained market euphoria is now occurring, as the ratio probes a two decade ascending diagonal (red) line responsible for past market tops.

After 8-9 years of a central bank induced bull market, and pushing +2803% gains from lows, investors are making the fatal decision to get back in, as the final stages are here explained in the ratio.


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And for some more color, here are some bonus charts...

On a reward-to-risk basis, investors have not been this 'offside' since 1994...


And remember VIX speculators have never been more short...

And, uncertainty about VIX (VVIX) has never been higher relative to the uber-complacent level of VIX...


And finally, one wonders why, as Small Caps are bid to the moon on the heels of tax-reform-hype, investors are buying protection with both hands and feet...



Is time up?


And all this is happening as the one main driver of global financial markets is dropping the most in a year...

Which does not bode well for stocks...

But then again, it's probably different this time.


Hugh_Jorgan FreeShitter Sat, 10/07/2017 - 13:06 Permalink

The problem with these analysis ignores the fact that the American capital markets were captured by .GOV, The Fed, and, post 2008. Technical analysis is all of meaningless at this point, ESPECIALLY on the macro scale.

We SHOULD have had a hard reset for the last 50 years worth of all-around bad policy long ago, yet here we are. At some point we WILL count the cost, but attempting to predict it with previous-generation tools and techniques is asinine.

In reply to by FreeShitter

scraping_by Sat, 10/07/2017 - 12:52 Permalink

Maybe the CBs are counting on Bitcoin (private fake money) to make up for less fiat (public fake money). While the chain puts on limits, there are no limits to rehypothication through derivatives.

hongdo scraping_by Sat, 10/07/2017 - 15:24 Permalink

Block chain doesn't put any limits on anything.  Fork away.  ICO away.… in hacking, fraud and spoofing and there is a lot more 3rd party trust required than I like.  I've been fooling around with Bitcoin and I don't see any anonymity except through using cash ATMs (which have horrendous fees) with a throw-away cell phone  and paper wallets.And I may be too paranoid, but as to open source code - unless you can read the source and you compile it yourself - it still requires a lot of trust.Even Trezor has a vulnerability.  And soon as I put my CC on Coinbase I got a call from Chase that it was hacked.  Chase, BTW, is pretty alert and re-issues my cards about every 6 months.I'd be happy to hear from anybody if I am wrong.  But please be technically specific. 

In reply to by scraping_by

Easyp Sat, 10/07/2017 - 12:52 Permalink

What impact does China have on this story?  Has there ever been a point where the worlds second biggest economy is run by a communist government with two stock exchanges trading largely state controlled companies?

Irvingm Sat, 10/07/2017 - 14:10 Permalink

Another attempt to call a top, 7 years later. From what I can tell the only traders making money in the hedge are the ones following the ShepWave

Let it Go Sat, 10/07/2017 - 18:03 Permalink

With the markets sporting a glow from all-time record highs that are being made week after week it might be a good time to revisit the concept of irrational exuberance. We must consider the possibility we may be nearing the end of a 37-year run that will completely upend everything most people have come to believe about the economy. Since 2008 all growth has been built on a mountain of debt.Those of us who have doubted and repeatedly predicted the collapse of this so-called recovery remain wrong because we have underestimated both the breadth and size of the global intervention of central banks and governments. Nobody in their right mind would have ever anticipated the sheer magnitude and scope of what has become a worldwide phenomenon. The article below questions when the burden of global debt will cause Atlas to shrug.