The Bear Thread

good stuff @ESOX 606 ! thx for the input in here

oh and please do not ever feel reluctant to make posts here or elsewhere on stockaholics! it really does not matter if you are new or what ... i think it's pretty awesome to see you opening up and posting around the boards!

we get quite a few lurkers who sign up here but do not post ... =/

but you are quickly becoming a nice add to this board! keep 'em coming! thx

 

11 4 market update
Video from Ron Walker TheChartPatternTrader

 

A Bearish Signal From The 2017 Bespoke Report
Dec 30, 2016

Our 2017 Bespoke Report market outlook contains a comprehensive view of where things stand today and what we expect for markets in 2017. We like to think it paints a full picture, taking into account all the positives and negatives facing investors. In 178 pages of charts, analysis and commentary there is obviously no shortage of important data points, some of which are bullish and some bearish. Below we’re including one of the more bearish tables from the outlook report. In an admittedly small sample set of only four historical examples, each time in history that a Republican president has followed a Democrat, stocks have fallen in the first year of the Republican administration. Returns were anywhere from -6.6% (Eisenhower) to -13.0% (Bush II). Lest we end 2016 on an overly pessimistic note, perhaps we’ll post a more bullish chart from the outlook report before the ball drops.

 

Could There Be A Post-Inauguration Sell-Off?
Posted by lplresearch

“Buy the rumor, sell the news.” Quoted by investors for decades.

That is one of the oldest trading axioms, and it is also one we’ve been hearing a lot lately regarding the U.S. presidential election and upcoming inauguration. We’ve seen the buying; now could selling take place once the inauguration is official?

For starters, going back to the 1952 election and the January 1953 inauguration of President Eisenhower, there seems to have been some near-term strength after the inauguration, but one month later, some weakness has been perfectly normal.



Here’s the catch: a closer look above shows there has tended to be more weakness after a Republican is inaugurated. Sure enough, the results have been weaker across the board.



What about post-election years? Per Ryan Detrick, Senior Market Strategist, “Post-election years have tended to see a bounce in the near term after the inauguration, but then there’s February. Looking at all post-election years going back to 1950, February has been down 1.8% on average—making it the worst month of the year. It might be the shortest month of the year, but be on the lookout for any banana peels this year.”

Here’s what the average post-election year for the S&P 500 has looked like:



Last, here’s a chart we’ve shared before and want to share it once again, as it has been in the news and social media during the past few days. The Economic Policy Uncertainty Index in November spiked to one of its highest levels ever. This index measures levels of uncertainty by focusing on newspapers and tax code data, among other macroeconomic variables. With the incoming Trump presidency increasing uncertainty on exactly what his policies will be, it isn’t a surprise economic uncertainty has been very high.



Why this matters is during previous times of high uncertainty, the CBOE Volatility Index (VIX) has usually spiked. That makes sense, as volatitly spikes during times of uncertainty. Well, this time we’ve seen a big spike in uncertainty, yet the VIX hasn’t even budged. Instead, it is near multiyear lows.

This is one potential clue that higher volatility could be coming and should that happen, it could produce downward pressure on equities right in time for the historically weak February timeframe.

 

Here! There was a time years ago at this community where I was known as the resident perma-bear.

Anyway, I'm thinking once we get past this Inauguration we'll begin the correction or at least some meaningful pull.

The market action the past month is kind of reminiscent of this past summer chop. Albeit not nearly as brutal, but still pretty choppy.

I can't really see the market heading meaningfully higher from here w/o a healthy pullback first. Could be just -5%, but -10% would be ideal imho.

 

Do You Have Triskaidekaphobia?
Posted by lplresearch

Tomorrow is Friday the 13th; so what does it mean? Well, if you have triskaidekaphobia then you might not want to leave the house, as that is the fear of the number 13. A fear of the actual day of Friday the 13th is called paraskevidekatriaphobia or friggatriskaidekaphobia. Those are some big words, but again, what does it mean?

First let’s take a breakdown of how each day of the week did from 1928* to 2016. This officially proves that no one likes Monday, as it is by far the worst day of the week for the S&P 500. Speaking of days of the week, did you know that the S&P 500 hasn’t dropped on a Tuesday the past 10 Tuesdays? It was exactly flat this week, but it still wasn’t lower. This is the longest streak without a red Tuesday since early 2013, when we saw 10 in a row. In fact, the S&P 500 hasn’t gone 11 in a row without a red Tuesday since a streak of 13 in a row in early 1972.



Getting to it, the last Friday the 13th was in May 2016, and the S&P 500 lost 0.8%. In fact, the past three Friday the 13ths have all been lower. Per Ryan Detrick, Senior Market Strategist, “First things first, we’d like to stress in no way are we suggesting you invest around any one single day, unless of course you break a mirror and see a black cat going to work tomorrow morning. But sure enough, Friday the 13th historically is weaker than the average Friday, and the results are skewed by some large dips.” It is worth noting that Friday the 13th is up 57.0% of the time, above the average Friday though.



Last, breaking things down by months, tomorrow will be the 14th occurrence of Friday the 13th in January since 1928. This month doesn’t stick out much, as the returns on Friday the 13th in January are fairly flat. The best months for Friday the 13th are June and August, while the worst are November and to no one’s surprise October.



Please remember not to take any of this seriously; we don’t. Everyone have a great Friday the 13th and long holiday weekend if you get Monday off work. Oh, and avoid any mirrors or black cats.

 

Bullish Sentiment Fading
Jan 19, 2017

After a burst of exuberance following the election, the recent sideways action in markets is causing individual investors to rethink their bullish views. In the latest survey from AAII, bullish sentiment dropped from 43.64% down to 37.01%. Believe it or not, that 6.6 percentage point decline represents the largest weekly drop in bullish sentiment since March. As you are also probably aware, it has now been 107 weeks since bullish sentiment was 50% or above. Three more weeks below 50% and it will be tied for the longest sub-50% run in the history of the survey.



While bullish sentiment drifts back into its pre-election range, bearish sentiment has been on the rise. This week’s reading of 32.68% is the highest since the November election, and as shown in the chart below it also represents the first ‘higher high’ in bearish sentiment in quite some time.

 

Snap Out of It! Individual Investors Still Not Feeling the Love
Jan 26, 2017

Whether you want to call it skepticism, self-control, or downright stubbornness, the fact that bullish sentiment has been so restrained even as US equities continue to trade to record highs is amazing. In this week’s survey from AAII, bullish sentiment on the part of individual investors dropped from 37.01% down to 31.58%, marking the second straight week where bullish sentiment has declined by five percentage points or more. That hasn’t happened since May. This week’s survey also marked the 108th straight week where bullish sentiment was below 50%.

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Bearish sentiment didn’t see much of an increase this week, rising from 32.68% up to 33.49%. The key here, though, is that bearish sentiment now exceeds bullish sentiment for the first time since the election. The DJIA may be at 20K, but individual investors want no part of it.