By Tom McClellan
The Magic of 150 Months
June 12, 2015
In a recent article featured in our twice monthly McClellan Market Report newsletter, we featured the chart shown this week. It was inspired by some work done recently by famed technical analyst Peter Eliades, who has been a newsletter writer for many years and is the proprietor of www.stockmarketcycles.com.
Continue reading 150 Months…
See, the headline says so…
Click the graphic for Mark Hulbert’s reasoning.
“The odds of a big drop in U.S. equities are high and increasing.”
Okay, but if this bull market has been one thing, it has been a rule breaker. Hulbert cites waning participation as a bearish factor. In the past we have noted record margin debt, record low cash, now stretched valuations (even by conventional analytical standards) and a cavalcade of other data that would imply a coming correction or bear market.
Every time it looks a little dicey, MarketWatch and friends trip over themselves to put up headlines like the above and this series of little mini-resets sustains the bull. It’s a FrankenMarket for sure, and on this cycle the juice is coming from the MSM as every little blip is micro managed (although the sentiment trend on the big picture is that ‘dumb money’ data aggregates are climbing steadily higher) and market sentiment gets dinged just enough to keep the bear case at bay.
But the trend marches toward over bullish on the big picture and that will eventually end the bull or usher in a real – as opposed to blip style – correction.
By Alhambra Investment Partners
In its 84th Annual Report released last June, the Bank for International Settlements departed from usual central bankish conventions and decried the growing departure from market discipline and even reality. The BIS even used the loaded term “euphoric” to describe what it saw as risk market prices no longer affected by fundamental economic conditions. As the Financial Times noted then,
The BIS, the bank for central banks, has been a longstanding skeptic about the benefits of ultra-stimulative monetary and fiscal policies and its latest intervention reflects mounting concern that the rebound in capital markets and real estate is built on fragile foundations.
Continue reading Not My Euphoria
By Chris Ciovacco
Transportation Average – A Big Concern For Stock Bulls?
Weakness In Transports In 2015
If you follow the markets, you have probably heard about the “non-confirmation” warning being flashed by the fact the Dow Transportation Average has failed to post a new high simultaneously with the Dow Jones Industrial Average.
Dow Theory Is Useful
We have written about Dow Theory many times in the past; a July 2014 article explains the economic rationale behind the theory. We believe Dow Theory is useful, but it is one of many sources of information.
Continue reading Transports – Big Concern?
By Tom McCellan
Eurodollar COT’s Leading Indication
May 08, 2015
The second half of 2015 could be a problematic time for the US stock market, if this week’s chart is correct. I introduced this relationship to Chart In Focus readers back in 2011, and it has been a regular feature in our twice monthly McClellan Market Report and our Daily Edition since 2010.
The basic idea is that I take data from the weekly Commitment of Traders (COT) Report on the commercial traders’ net position in eurodollar futures, and then use that as a leading indication for the SP500. In this case, the term “eurodollar” (ED) refers not to a currency relationship, but rather to dollar-denominated time deposits in European banks. So it is an interest rate futures product.
Continue reading Eurodollar CoT Indication