The SPX is exhibiting exceedingly rare coincident indicators, occurring only twice in US stock market history going back to the 1920s, including:
A Dow Theory sell signal.
A Hindenburg Omen.
A log-periodic, super-exponential blowoff that began in 2012 and resolved in 2014.
A Coppock Guide/Curve "Killer Wave" (see Jim Stack of Investech).
Weekly and monthly Tom DeMark (TD) sell signals.
A larger-degree, cyclical Elliott Wave (projection) from the 2009 low.
Record margin debt as a share of GDP.
A record high for non-financial corporate debt as a share of GDP.
A record high for equity market capitalization as a share of GDP, i.e., the "Buffett Indicator".
A monthly MACD cross.
A monthly RSI cross down below 70.
The index reaching 20% or more above the long-term cyclical moving average.
Oh, yes. When were the two previous times all of these indicators coincided as is occurring today . . . ?
1929 and 2007.
But it's "different this time" with QEternity, ZIRP, NIRP, "forward giddiness", and central banks the world over willing, able, and prepared to panic at a moment's notice and expand trillions of dollars' worth of fiat digital debt-money credits for bank reserves to prop up equity indices to avoid a bear market and the risk of a debt-deflationary implosion larger than 2008-10.
Financial asset bubbles are now a de facto monetary policy tool and the equity market a kind of rentier-socialist public utility that cannot be permitted to lose more than 7-10% of its value that persists, let alone be allowed to crash 35-50%+.
It is often said that they don't ring a bell at a market top. Well, to my ears, the sound of the death-knell tolling of the bull market is deafening.
"And so it goes . . . "
Comments
caputo.philip
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Outstanding research! Great work!
YaKa
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well done.
IvanLabrie
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And where's the short entry?
claydoctor
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I short the S&P playing the vxx and vxx options (risky business). The time to get short S&P was may 18th. Nice charts and indicator descriptions here, great job!