Why are market insiders so worried?
Though stocks have been hitting new highs, something was bound to spook investors -- and that something was a downed Malaysian jet.
It was all going so well. Federal Reserve chair Janet Yellen was in front of Congress this week brandishing her dovish tendencies. Large-cap stocks are pushing to new highs. CNBC was attacking the skeptics on air with great vitriol. All was right in the world.
But all changed on Thursday after a Russian surface-to-air missile streaked through the East Ukrainian sky and, in a flash, ended nearly 300 lives at 30,000 feet when it brought down a Malaysian 777 airline bound for Kuala Lumpur.
Both Kiev and the pro-Russian separatists are blaming each other, but it's clear that this is going to escalate the situation -- especially in the wake of Wednesday's new U.S. economic sanctions against Russia.
But the bigger story is that this confirms the apprehension I noticed deep within the market earlier this week. Insiders didn't know what, exactly, was going to spook the market . . . only that things had gone too far.
Breadth signals were sending warning signs. Jason Goepfert at SentimenTrader notes that with large cap indices near new highs, underlying breadth momentum has been badly lagging and is at one of its worst readings in more than 60 years.
Not convinced? Here are just a few of the ways you can see the problems with breadth momentum:
The Nasdaq 100 closed at a new high with net negative breadth on Wednesday: Up issues accounted for only 42 percent of the total. Of the 21 other times this has happened, the Nasdaq 100 was higher two days later only 38 percent of the time.
The Russell 2000 was struggling to stay above its 50-day moving average -- a level it last lost in a meaningful way back during the March/April momentum/biotech pullback -- which it lost in dramatic fashion on Thursday. Now, the Russell threatens its 200-day average.
A breakdown here would be bad news because, aside from a quick test below back in April and May, the Russell 2000 has remained above this level since this Fed-fueled stock market meltup started in 2012.
You can also see the breadth concerns in the way biotechnology stocks are coming under pressure again, with the Biotech iShares (IBB) down another 2.3 percent as I write this Thursday.
The fund is now nearing its 50-day moving average again for the first time since March. In response, I've recommended my subscribers add short leveraged exposure to the sector by adding an allocation to the ProShares UltraShort Biotech (BIS) -- a position that is up more than 12 percent since added back on July 8.
And the concerns also show up in the way selling pressure is beginning to hit high-yield corporate bonds -- an area of the financial system that has pretty much gone straight up since this time last year, providing a base of support to the stock market by empowering debt-funded share buybacks. But the iShares High Yield (HYG) has closed below its 50-day moving average for the first time since last August and is extending its decline below this key level, today.
It's possible that the bond market is preparing for another "taper tantrum"-like episode -- of the type we saw last spring when Bernanke first broached the topic of rolling back QE3 -- in preparation for the end of QE3 in October.
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Disclosure: Anthony has recommended BIS to his clients.
In my small Midwestern town, there lived a guy who was deathly afraid of tornados. Every time thunder clouds appeared he was convinced a tornado was imminent. For 40 years he did this. One day a tornado did touch down nearby; we never heard the end of it. "See? I TOLD you."
Moral: Even a blind squirrel finds an acorn once in awhile.
Maybe it is the GDP numbers? Maybe the fake jobs numbers (almost all are minimum wage, part time jobs). Maybe it's the devaluation of the dollar? The high world price of oil and the high gasoline taxes. Maybe it's the bloat of big government and the plantation entitlement mentality. Maybe it is the world situation.
Or maybe it is just FEAR of Obamanomics?
Maybe they are worried that they will finally be called out for the Manipulations and Corruption. They certainly aren't worried about Money as they have been making tons of it off Crack Dollars while the rest of us Suffer the fallout. Maybe they are worried that the Working Poor and the Fading Middle-Class will start a Revolution. These Market insiders literally brag about how many Jobs can be CUT all in the name of Profit and Greed. Well you know what Greed got the British. This time around it will be far Worse. The Market falling should be the least of their worries.
You're right Mirage, I totally believe in free speech, exception too much gutter talk...
But it also depends in which context it is used...??
If I were to get deleted a few times, or too many....I would just go back and have discussions and Market give and take...Where I'm loved...yuk, yuk.
I'm pretty much a totally different guy there, and "no one allows" any Political rambling in the discussions; It's NOT WELCOMED...
Unless the article pertains to that subject or inter-connection...
Havey...The Butterfly that flapped his/her wings, was the one RESPONSIBLE...
V_L, Why the hell would anyone "delete your post"..?? Did you call someone at MSN a name or something..? Or did you double clutch and say the "exact same thing" twice in a 24 hr. period..
I guess I've never seen you do that though...Probably something to do with ABS, aka Barry..?
But it does seem that you have plenty of post' on here today or from yester....
Randy47....It's not EVERYDAY that a Jetliner filled with 300 passengers, gets shot down by some nutballs or idiots....And then the JEWS evade a Country.
The ONLY reason Market insiders are worried, is because Anthony is WORRIED...
Off to the gravel pits to check on some crushed concrete, no time for this...Ciao
Maybe it has to do with a couple of these finding on gold ;)
"Gold is on its way down. Gold is the new fur coat. No one is wearing it anymore, other than on a ring finger. Even then it's normally plated now."
For safety reasons ,radiation shields were placed around the reactor. They were sheets of lead on steel frames, that were rolled in, to shield the repair team until the radiation leak could be repaired. The engineer, a designated member of the emergency repair team, noticed after they completed the repair to the leaky reactor, the shields had changed their nature, and several of the shields were unusually discolored. They had been transformed into AU ... Gold!
Pb ... aka Lead, is only three molecule in difference from gold. It turned out later the engineer had researched that if you could knock three specific molecule off of lead, the end product is gold!
Denser and heavier than lead, the only thing that can do that is Radiation.
He had to swear under the official secrets act of Britain, to keep this event secret, and only related the story to his nephew (also a physics engineer), on his death bed, as he died from cancer and brain tumors, in the late 1970's years ago.
The British and U.S. governments removed their currencies from the Gold standard almost immediately (early 1970's), and resorted to a secret Nuclear standard, and tried to prevent others from manufacturing gold.
Make of this what you will! We have had synthetic Diamonds for 30 years, The Russians are drilling Oil from wells that are 25 to 35 thousand feet below sea level. The only oil shortage is said to be in North America, and experts say its only because a shortage of production facilities.
Iran and North Korea have discovered the gold process recently. China is secretly supporting North Korea, in return for a percentage of the produced gold. And Iran is selling theirs on the black market, around the world.
Some say this "new" gold is what's causing the increase in cancer rates among the wealthy, who wear it daily, and others who used it to fill cavities in their teeth.. Fort Knox is filled with this contaminated gold, and a main reason it is shut off from visitors. Buy your gold, but accept the risk."
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As geopolitical tensions threaten to spin out of control, investors are wondering how best to position their portfolios for the global turmoil.
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