Two numbers even the biggest stock market bulls should be concerned about now
From Kimble Charting Solutions:
Earlier this month I shared that cash levels/negative net worth in brokerage accounts were nearing the lowest levels in history. (see post here) The last three times levels were this low the market fell in price.
My mentor Sir John Templeton said the four most dangerous words in investing are…”It’s different this time!”
The chart below reflects something “IS DIFFERENT THIS TIME!”
CLICK ON CHART TO ENLARGE
The inset in the above chart reflects that Negative Net worth and margin debt are reaching levels not seen many times in history. The last couple of times this combo took place the stock market retreated a little bit in 2000 and 2008.
Is anything different this time around? One thing that is different this time around is…if take two extreme emotional market price points, (1987 high and the 2002 lows) and draw a support/resistance line into the future, it happens to come into play where the S&P 500 is RIGHT NOW!
Is the “Averaged PE ratio” any different this time?
CLICK ON CHART TO ENLARGE
The above chart from Doug Short/Bruce Carman looks at that averaged PE ratio since 1877. As you can see, if this was the only tool you could use… does the market look like a screaming bargain right now?
One trading chart even long-term investors should keep an eye on
From All Star Charts:One of my most important charts has to be the relative performance chart for consumer staples. I don’t care if you’re a technician or not, this is a big one.
The psychology behind the price action is very simple: Money has to be put to work, one way or another.
Whether that money goes into tech, financials, discretionaries, or chooses to be more defensive into staples is another thing.
If the economy is slowing and things are “bad”, we’re still going to drink soda, smoke cigarettes, brush our teeth and wash our dishes right? That’s not going to change.
So when institutions need to allocate money and prefer to be “defensive”, for whatever reason, the flow into staples picks up relative to other areas of the market (Coca-Cola, Philip Morris, Colgate-Palmolive, etc.).
Here is a daily line chart of S&P Consumer Staples Fund versus the S&P 500 to show the relative performance I’m talking about. I think it’s pretty clear that since the 2008 market crash, when institutions were dumping money into staples on a relative basis, price has been coiling to the point where it’s decision time very soon…
Final Q4 GDP Misses As Personal Consumption Slides Once More – Full Breakdown
Moments ago, as we prepare to put Q1 2013 to a close with a bout of window dressing that will send the S&P to all time highs, we got the final Q4 2012 GDP revision: a number largely meaningless, although it does put closure to the economy in 2012. And as with all economic numbers in the past year, it was not pretty, coming in at 0.37%, below estimates of a 0.5% print, although modestly better than the second Q4 revision when it was 0.14%. The full breakdown by various components is shown below, with the most notable, Personal Consumption Expenditures, showing a gradual and consistent decline over the past three months as it was revised relentlessly lower, dropping from 1.52% in the first revision, to 1.47% in the second, to 1.28% in the final. Offsetting this was a jump in Fixed Investment which rose to 1.69%, the highest since Q3 2011. Supposedly this implies that capital spending is soaring, when in reality companies continue to curb CapEx plans, instead focusing on short term shareholder gains such as buybacks and dividends, which is to be expected in the absence of any actual end-demand.
BIG MISS: Chicago PMI Falls To 52.4, Production Lowest Since September 2009
The March Chicago PMI survey is out.The headline index fell to 52.4 from 56.8 last month.
Economists were expecting a much slighter moderation to 56.5.
The production sub-component plummeted to 51.8 from 60.2, marking its lowest reading since September 2009.
The new orders sub-component also fell sharply – to 53.0 from 60.2 – the largest monthly drop since May 2011.
MORGAN STANLEY: The Euro Risks Sliding To $ 1
Things Are Speeding Up: Portugal Budget Deficit Widened, Will Need A Second Bail Out! BE CAREFUL OF EURO; BE SHORT RATHER THAN LONG, EL-ERIAN SAYS PIMCO
More EU Bad Economic Data: German Unemployment Worse Than Expected! Portugal’s Budget Deficit Widened; 5.15% SPAIN 10YR! Italian GDP Forecast Revised Lower And Political Deadlock Worsening!
CANADA Sees An Potential Systemic Crisis In 2013; JIM GRANT: Cyprus Fired A Warning Shot Across The Globe; MARC FABER: Not Even Gold Will Be Able To Save You From What Is Coming
TrimTabs’ Biderman: ‘April Could Get Pretty Wild’ for Stocks
…According to Biderman, the immediate stock market direction will be down — he believes many portfolio manager will be taking profits this week from a profitable first quarter that ends March 31.
But then stocks will go up again for the first week of April as the aforementioned new quarter and new month buyers emerge, only to be followed by fresh downward momentum again that should continue into the federal tax deadline, he predicted.
“My best guess is that billions of dollars of stock will be sold between now and April 15 to pay taxes,” Biderman said “And when the market has been as strong as this one, up 20 percent since the start of 2012, lots of taxpayers are waiting until the last moment to sell.”
Biderman’s market-timing scenario follows a familiar script – stocks should go back up after April 15, as “billions of tax-oriented investments are deployed by the end of the month.”
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