Wednesday, March 12, 2014

Some more evening news

In case the last two articles weren't enough to frighten you out of the market, there's this!

Bespoke - breadth remains strong. Yet more pure dispassionate analysis from Bespoke.

Ritholtz - how market tops get made. Gee. Good article. Let me quote a big section for the permabears who still have no fucking clue, since obviously they won't click through to read a Ritholtz article:
New 52-week highs are the earliest indication of a market that might be turning unhealthy. Look for divergences between index-price highs and new 52-week highs. When a major index such as the S&P 500 is making new highs but the number of SPX stocks making 52-week peaks begins declining, that divergence is a significant warning sign. Desmond notes that this can warn of an eventual top as much as a year ahead of time.

The next warning signal is the divergences between the advance/decline line and the broader markets. This often turns south six to eight months ahead of major tops. Desmond emphasizes that both the new 52-week highs and advanced/decline line reveal market breadth -- a term that describes how much of the market is participating in the advance. When tops occur, we see extreme selectivity -- fewer and fewer stocks are pulling the market upward. We saw a classic example in the “Nifty Fifty” during the 1960s, and again in the dot-com bubble with a handful of leading stocks driving the Nasdaq.

The third factor is selectivity by market capitalization size. Desmond has observed that, historically, the first group to roll over is the small caps. The bottom 50 percent of the market by cap size will begin to falter first, while the rest of the market appears healthy. The usual time period is eight months prior to a top for the smaller issues to fade. The mid-caps -- the next 35 percent or so of equities -- will falter four to six months before the high. The tendency for big-cap-dominated indices to peak last is a function of their structure. They are market-cap weighted and therefore can be dominated by a handful of mega-caps.

The fourth and last factor worth watching is the percentage of stocks in a bear market. As a rough estimate, any equity down 20 percent from recent highs can be considered in its own bear market. During healthy bull markets, less than 10 percent of stocks are in this condition. As the small caps and mid-caps roll over, this percentage will increase. At the market peak, we typically see one-fifth of stocks in their own bear market.

What does all this mean for the current run? According to Lowry’s, “the weight of evidence continues to suggest a healthy primary uptrend with no end in sight.” For those concerned with a market top, that is rather bullish.
It's an article for us sensible people to file away for future reference, and for permabears to read immediately so they can make themselves a little less fucking ignorant.

Bonddad - ag ETF still rallying. Pretty freakin' crazy chart there. And I bet some dumbass Whiteys are looking at that chart and saying "OMG the hyperinflation has come! buy gold!!1!" But maybe it has something to do with crop failures in Brazil, the drought in California, and now uncertainty in the Ukraine?

Right Wing Watch - America has been overthrown by a Nazi dictatorship! OMG! Yet how nice of the Nazis to let a mixed-race guy run the country. Or as a commenter at Fark wrote:
He's a strong armed fascist authoritarian thug who's an effete, feckless professor hellbent on imposing pure Marxist Socialism through Bernanke and his Wall Street pals via crony capitalism. He's a smug, out-of-touch elitist, who's just going to give out freebies and handouts to his "homies" in the poor underclass in the ghettos. The ultimate goal is enact a Godless, secular European based society through Islamic Fundamentalism, and the Hollywood gay agenda will be shoved down our throats through Sharia Law.

Wake up, people!!
To which I replied:

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