Record High Margin Debt With Most Traders Betting Against This Market

[The Sceptical Chymist]

...

galdur

You likely know that the S&P 500 blasted through its "Double Top" over the past four years. 

finviz apparently does not go far enough back to show that double top (at least as visibly as I have seen other longer-term S&P 500 charts), but the weekly chart DOES show the S&P 500 doubling over the past four years.  Checking their monthly chart shows a muted "second top".

I hold stocks (and am concerned...), but am well diversified into hard assets, etc.  Stocks (as well as most US real estate) have typically done well over a longer time frame.

"A perfect storm".  Nicely put.  It is coming.

If what OP says is true, then yeah it's bad and it's coming.  It was kinda the same thing back in 1929, where everyone was overleveraged.  It was also true of Long Term Capital Management in 1998, which could have bankrupted most of the financial institutions in the US. 

I don't necessarily look forward to a crash, but it sure would be nice to be able to buy some cheap stocks.  And if you're the owner of any real estate, you're smart.  I wish I had cash flow to buy some.  I do have a bit of silver but not a whole lot.

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[galdur]

Margin debt has come off the peak back there in April-May but is still very high. If it´s getting ready to correct then the stock market should quickly follow



I think cash levels at mutual funds are very low presently. Should be another danger sign. And then there´s always the epic battle between the FED´s money printing and collapsing commodities prices. It´s going to be interesting.

[galdur]

Here´s another very interesting chart. The mismatch between the risk-on stocks and risk-off fixed interest sector.
Something´s going to give for sure.

Note that the Dollar started its big run back there in the summer of 2014.

[OROBTC]

Here´s another very interesting chart. The mismatch between the risk-on stocks and risk-off fixed interest sector.
Something´s going to give for sure.

Note that the Dollar started its big run back there in the summer of 2014.

galdur has displayed the most interesting dangerous looking chart of the day.  Those big interest rate spreads breaking an apparent correlation with the S&P.

My guess is that the End Result of all of this is not go to be pretty.

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Related: I saw "The Big Short" (movie) yesterday about the Mortgage Backed Securities (MBS) and related subprime sleaze of 2006 - 2008.  Highly recommended.  But you will NOT leave with a smile...

Banksters...

[galdur]

It seems likely to retest those bottoms of last Aug. and Oct. Major support around 2000 in the S&P has been breaking down since November. Then again it could make yet another try for a new high. But I doubt it. The breadth isn´t good. The big dogs and fantasy stocks mask it. If you look at the small ones in the Russel 2000 they´re almost in bear market territory already.





These charts update here so you need to to shift the chart to the left so it fits what was posted if you read this later 

[OROBTC]

...

CHINA halted trading a little while ago (tonight, Weds, night USA).  Their Shanghai stock index down a little over 7% (after losing 7% a couple or so days ago).  Yikes!

Dow futures down some 160 last I looked.

Big problems coming?  Zero Hedge is all lit up...

[galdur]

Wow, crude oil keeps tanking, now at 33 dollars. It looks seriously oversold so I wonder if there could be a little short covering coming up (before the next leg down).

[galdur]

It seems pretty much confirmed; the crash of 2016 has started. It´ll probably take all year to bottom.

The breadth is absolutely awful. Yesterday, although the DOW was up over 200 points, 20% of the entire stock market hit a new 52-week low.

[galdur]

It seems likely to retest those bottoms of last Aug. and Oct. Major support around 2000 in the S&P has been breaking down since November. Then again it could make yet another try for a new high. But I doubt it. The breadth isn´t good. The big dogs and fantasy stocks mask it. If you look at the small ones in the Russel 2000 they´re almost in bear market territory already.





These charts update here so you need to to shift the chart to the left so it fits what was posted if you read this later 

It is at those bottoms now. Seems weak, doubt that it´ll hold. The Russell 2000 is already in bear market the big guys should follow soon.

[galdur]

Its a perfect storm.

You have market participants who have borrowed to record levels in order to own stocks, totally leveraged up, yet the majority of traders are increasing their bets that this market is going to fall-and soon.

Below is an options statistics sheet of (NYSEARCA:SPY) SPDR S&P 500 ETF Trust, from today 6-2-15.

... more

http://seekingalpha.com/instablog/29482055-gregory-mannarino/4058646-record-high-margin-debt-with-most-traders-betting-against-this-market

""""We should all be asking: What were Wall Street’s latter-day bears saying last June, when the market was at an all-time high?

The answer is that bears were few and far between. On the contrary, bullishness was at close to extreme levels.""""

 

Opinion: A bear market in stocks will be over before you know it

Published: Jan 15, 2016 5:12 a.m. ET

http://www.marketwatch.com/story/a-bear-market-in-stocks-will-be-over-before-you-know-it-2016-01-15?siteid=rss&rss=1

[galdur]

This Hulbert guy is an idiot. When bullishness is at an all time high this is a sure sign that a major correction is near. You don´t begin talking about bear markets after they´ve started you talk about them when you start anticipating them. It´s called being ahead of the curve.

[OROBTC]

...

The Dow is down 435 or so as I write.

But what I follow even more are indicators of where my personal finance lies.  The Baltic Dry Index (a measure of marine freight rates for bulk materials like corn and cement) is down to a record low:



http://stockcharts.com/h-sc/ui?s=%24bdi

Other disturbing new lows:

GMT (GATX, a large company that leases railcars): $34.93, down 46% off its 2015 highs

TGH (Textainer Group Holdings, leases shipping containers): $9.51, down over 70% from 2015 high

Crude oil (WTIC) was under $30 / barrel earlier today....

[galdur]

Atlanta Fed Waits Until The Close To Reveal 0.6% Q4 GDP Estimate

Submitted by Tyler Durden on 01/15/2016 16:15 -0500

With less than half an hour until the close, we asked the Atlanta Fed - the most accurate predictor of GDP - which was scheduled to post an update of its Q4 GDP NowCast following today's ugly economic data, if it was was planning on releasing its latest Q4 GDP estimate before or after the close, something it usually does just before noon. ....

http://www.zerohedge.com/news/2016-01-15/atlanta-fed-waits-until-close-reveal-06-q4-gdp-estimate

[galdur]

The robo-machines are now having a grand old time hazing the August lows at 1870 on the S&P, and may succeed in ginning up another dead-cat bounce or two. But this market is going down for the count owing to a perfect storm.

To wit, the global and US economies are heading into an extended deflationary recession; S&P earnings peaked at $106 per share more than a year ago and are already at $90, heading much lower; and the central banks of the world are out of dry powder after a 20-year binge of balance sheet expansion.....more

http://davidstockmanscontracorner.com/soon-comes-the-deluge/

[jyakulis]

This volatility is alarming. 1000 point swings in a day. Haven't seen that since 2008.

[galdur]

Well, the stock sell-off is certainly beneficial to the central bankers with the bloated balance sheets. It drives money into bonds, up goes their price and down the yield. And it helps keep up the dollar. So, maybe this is being managed to some extent. In any event; a considerable correction in stocks was long overdue.

Isn´t it strange how you keep hearing for years and years that the biggest bubbles of them all are the safe-havens against other bubbles.  

[OROBTC]

...

galdur

That's quite a Mighty March Upward for the 30-Year Bond!  All the way from 2000 until now.  Yes, in a recession (and/or deflation), the Bond will do very well compared to almost everything else.

But, neither do trees grow tot he sky.  30 years is a long time for economic conditions to change.

Dow down 387 as I write, and that is off its lows of the day.

Stayed diversified and cautious everyone...

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EDIT: Crude oil is now down to a rather alarming $26.93, yow!

[galdur]

...

galdur

That's quite a Mighty March Upward for the 30-Year Bond!  All the way from 2000 until now.  Yes, in a recession (and/or deflation), the Bond will do very well compared to almost everything else.

But, neither do trees grow tot he sky.  30 years is a long time for economic conditions to change.

Dow down 387 as I write, and that is off its lows of the day.

Stayed diversified and cautious everyone...

*   *   *

EDIT: Crude oil is now down to a rather alarming $26.93, yow!

It´s a rout. At the moment about a third of stocks are hitting a 52-week low. But of course the indices are not equal weighted so the big dogs conceal the broad weakness. It´s better for morale, I guess.

[galdur]

Jeffrey Gundlach, co-founder and chief executive of DoubleLine Capital, said on Wednesday that the major declines in equity and credit markets could suggest that “margin calls are going on.”

Santelli : “We Have Quantitative Easing where Printed Paper Money is buying financial assets that can’t support themselves on their own fundamentals, Why is it logical to back to that world, where leverage is the only growth. Buying securities with printed money is not the solution”

Amid the global market turmoil, the Federal Reserve is more likely to ease than tighten interest rates again, Ray Dalio, founder of the world’s largest hedge fund, said Wednesday.

“The risks are asymmetric on the downside, because asset prices are comparatively high at the same time there’s not an ability to ease,” he added. “That asymmetric risk exists all around the world. So every country in the world needs an easier monetary policy.”

“It’s going to be much more difficult this next time,” he said, because the U.S. needs movement on fiscal policy from lawmakers in addition to just monetary policy from the central bank.

[Pab]

Stocks all over the world will go down,it was long pump now it  is dump time
First 20% than we will see