So far, no signals of a bull market top
5 signs generally indicate when stocks are peaking. None are apparent now, says an Oppenheimer analyst.
Ari Wald, a technical analyst with Oppenheimer, is out with a note Monday that outlines five signals that indicate a bull market top.
"As it stands," Wald writes, "we think the absence of these signals argue against an imminent end to the cycle."
The signals, per Wald, are:
- Moderation in the S&P 500's uptrend.
- Signs of distribution and narrowing participation.
- Prolonged period of elevated volatility.
- Sustained breakdown in the 10-year U.S. Treasury yield.
- Spike in the price of WTI crude oil futures.
This chart from Wald shows the relationship between the S&P 500 and the VIX, with bull market peaks typically not coming from low VIX readings.
We've written a lot about volatility through the spring and early summer, and written mostly about the absence of volatility.
Last week, following the news of the Malaysia Airlines plane crash in Ukraine, the VIX, or volatility index, spiked higher by more than 30 percent.
The next day, the VIX gave up most of these gains. It seems that unless this trend changes, the current bull market should remain intact.
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Words spoken just before all Market Tops in the Past. There are plenty of Signals if you don't have your Head Stuck in the Sand. However, this time around, the Global FEDS keep plugging the gaping Holes with more Crack Dollars. Over $10Trillion and counting from just three Central Banks alone. Just how long do some folks think this can last? Economies go in and out Booms and Busts, what do the Global Feds have left for the next Major Downturn.
Look Again... QEIII is nearing an end (down to 35B/month from 85B/month). Without top line growth (adjusted for money printing), and REAL demand, it unlikely the market can sustain these levels. Already you see negative growth in the first quarter, and large companies laying off thousands at a time (MSFT, 18,000, etc). I suspect we will stagnate and see sub 1.2% growth in the 2nd quarter, and likely sub 2% for the entire year.
Wait till the rest of the Obamacare taxes kick in, and the Obama tax hikes continue to slow the economy.
I like to be optimistic, but under Obama it is best to sit on the sidelines. Only two more years of this.
The VIX is a rather notable indicator, probably the SKEW also...?
I just know very little about the latter..
And have tracked or charted the VIX for about 10-12 years, along with others.
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Fed keeps important 'considerable time' language in reference to short-term interest rates, but dissents and dots leave doubts.
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