One good way to tell the trend of the US markets is the $CPCE index or the Call Put Ratio. The daily CPCE may be quite volatile but the simple average can be used to chart the trend quite accurately.. if CPCE's 20-day is trending down, most likely the US markets will trend up and vice versa. As shown in the attached chart, the US market has showed no sign of settling down to correct; but the 20-day has slowed down and almost going sideway although its 10-day showed sign of trend picking up.. many US analysts expected that the uptrend will continue till mid January 2014..
VIX is another indicator that can tell the direction and whether it is a strong buy or sell..If VIX's 20 and 50-day started to turn up, the is the time to sell; otherwise, buy.. if VIX's 20 and 50-day stay below the 200-day or reflect from it, it is a strong buy..the reverse is true.. Presently, VIX 20/50 is osc around 200-day, it is neither a good buy or sell.. the 20-day is as if telling us that there are more upside to come..but not exciting yet unless it continues to drop and crosses the 50-day as it reflected from the 200-day
Fed has been buying up Asset Back Securities (ABS) like nobody's business and this has boosted not the housing but auto sales in US this time. The Auto sales is now at 7 year historical high since 2007.. and you guess it right.. subprime loans is active again, taking up about 7% of the ABS loans and the leasing companies have been bleeding so far because of delinquencies which are in the increase lately.
If one were to check the following chart, one should immediately notice that a recession soon follow whenever there is a boom in the auto sale.. the last happened in 2007 although 2012 was a nearly as high. The exception was 1986 where recession happened only few year down the line but a Black Monday happened in 1987. It is good therefore to take note that auto sale and also industrial activities will also be leading indicators that will foretell if there is recession in the making
Are we close to a double dip recession? This chart that compares the PMI for both period between 74-83 and 02 to present appears to suggest that it is the case. In 74-83, there was a double recession, one in 1975 and the other in 1980. In the 02 to present period, we have one in 2008/09. If one studies the behavior of PMI closely, it is easy to spot that a recession will follow soon when the PMI failed to take off like what happened in 1983. Therefore, the threat of a second recession is still there if the coming PMI readings cannot breach the last high.
Billionaires have been dumping stocks in the US quick and fast..
“Companies will be spending more money on borrowing costs than business expansion costs. That means lower profit margins, lower dividends, and less hiring. Plus, more layoffs.” claimed Mr. Wiedemer, the author of "Aftershock", the best selling book in New York times. He predicted that there will be a massive market correction, as much as 90%. In 2006, Wiedemer and a team of economists accurately predicted the collapse of the U.S. housing market, equity markets, and consumer spending that almost sank the United States. They published their research in the book America’s Bubble Economy.
If one cares to analyse the Singapore stocks and compare their financial performances to yester-years, one should notice that many stocks are now heavily depending on borrowed money to survive as their Net EBITDA debt ratio have climbed way higher than the acceptable ratio of 4.5, beyond which suggests that they would become "money slaves" who would have difficulties paying back their loans. So do make a check on the companies financial position before pouring in more investment.
For those who hope to see Walls Street plunge the second day, don't hope too much. Walls Street is unlikely to do any summerset soon judging from the 52 High and Low in the NY Stock Exchange. A good indicator to watch is the $NYHGH and $NYLOW from the stockchart.com
$NYHGH and $NYLOW have been used to monitor Hindenburg Omen (HO). Although HO is never 100% reliable, its components can be used to judge if the market is sick, how far it is sick and whether there is any chance of a plunge or recovery..
One of the HO's requirements is for daily number of NYSE new 52 week highs and the daily number of new 52 week lows to be greater than or equal to 2.8 % (this is typically about 84 stocks) of the sum of NYSE issues that advance or decline that day (typically, around 3000). If both have exceeded the 2.8 %, it is a telltale sign that something going to happen soon.
Presently, the $NYHIGH is losing steam but $NYLOW appears not too interested to race.. the last race it took was around Aug to Oct 2011, then the momentum was immediately squashed by Bernanke's QE3.. not sure what will happen this time round..lets watch..
The US 10 year yield continued to climb as expected when it stayed within the rising channel. The yield took a dangerous step to go below the last high but quickly returned back above the resistance/support. The latest US treasury auction yesterday helped to prop up the price as investors were of the view that good ADP report wouldl cause more FED taperig. Some said the yield will continue to climb to 4%, lets watch what will happen.
Stocks hailed the Fed's decision of next "monetary loosening" and continued to climb but quietly, the bond holders are not quite convinced and started their sell off with 10-yr yield threatening to brush the previous record of 3% last night... it is just performed a stunning climb of about 2% to 2.981 yesterday after having fell to 2.885 following Bernanke's tapering announcement.
The chart is showing that the 10-year yield will continue to climb as long as it stays inside the rising channel. It would definitely bleach the 3% high to complete the 3rd wave which started since May 2013 after Bernanke first announced the news of tapering..
The US investors appeared to be very confused about FED's minutes as can be seen from the one minute up 20 points and the other minute down 20 points when they tried to digest FED's minutes just after 2:00pm ET yesterday. The investors did not quite agree to where the stock should move even right to the end of the trading session. On the one hand, the ADP good report indicating that the US economy was in the mend, on the other, not quite sure how FED's further tapering down the road will be accepted by the market..just cannot decide where to go... LOL
Will US Markets Crash Now That Goldman Has Killed the Music?
Goldman's Chief Strategist just came out and said, "We believe S&P 500 trades close to fair value and the forward path will depend on profit growth rather than P/E expansion. ................ We explore valuation using various approaches. We conclude that further P/E expansion will be difficult to achieve. "
According to ZeroHedge's chart, the forward PE of S&P is close to peak and the author of ZeroHedge's article appears to suggest that the tide is close and the market is hoping for a crash now that Goldman has spoken. However, most charts are suggesting that a crash is still not at sight and the US market is going sideways..
Post by stockpicker on Jan 12, 2014 17:01:52 GMT 7
This Phoenix Research has been a bear all the time, It has tried to prove that US Government was trying to cook the book showing good unemployment figures all along and the QE only boost the Equity and other market and does nothing to create employment. He said that the employment rate was actually declining if one were to use other employment statistic rather than the BLS designated chart and figures. Here is one of the article they wrote