Updates

1. Investors Intelligence bulls now highest since Oct 2007:

3jan1Source: Investors Intelligence

2. Short term trend exhaustion on SP500:

3jan2Source: Rory Handyside

3. Parabolic and compression on SP500 shown here:

3jan3Source: AfraidToTrade

4. Breadth divergence on SP500 as measured by % stocks above 200MA:

3jan7Source: Index Indicators

5. Crestmont P/E now 3rd highest in history after 2000 and 1929, and in 97th percentile:

3jan4Source: Dshort

6. Solar cycle 24 updates from NASA and SIDC – potentially a higher smoothed max, but either way a second peak, which fits with current speculation excesses:

3jan5 3jan6Sources: NASA and SIDC

7. Misc:

Lunar negative fortnight begins this weekend

Some geomagnetic disturbance in progress

US Q4 earnings season effectively begins with Alcoa 9th January

Portfolio rebalancings so can’t read too much into action at the start of January whilst this is taking place

China liquidity eased, but rates remain at elevated levels

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20 thoughts on “Updates

  1. You present a compelling case, John.

    Are you still guiding for a rotation of capital toward commodities?

    If the US equity market does indeed top, there should be a lot of fast money looking for a home. I’m beginning to think USTs offer some intermediate value at these yields.

    As mentioned a few posts back, I’m a fan of mining stocks here as well. They are starting to come alive again.

    Best to you.

    Rick L

    1. Thanks Rick. I’m confident about PMs (with that caveat about how they could get sold off first in a crash), less sure about the wider commodities complex, due to the growth/deflation challenges. There’s a clear path for how they could rally: equities top out, dollar breaks down, commodities taken up as late cyclicals and anti-dollar, and speculated up into a mid-year solar peak, should the smoothed max exceed 2012. But there’s also a deflationary route: rising dollar, waning commodities demand, deflation cemented as they drop further, equities sell off and take everything with them. Technically they have not broken one way or the other out of the long term consolidation triangle. Hence I continue to hold, and watch and wait.

  2. Hi John,

    We have reached the mid point of SC24 which is the point where the sun’s polarity flips. I read that we have a double headed top either side of this date to mark the solar max. So 2011-2013-2015 fits with what you have been saying John and also with my cycle having a gold top in 2015 (which is looking far from likely at the moment).

    http://www.independent.co.uk/news/science/video-sun-has-flipped-upside-down-as-new-magnetic-cycle-begins-9029378.html

    All the best for 2014.

    Kerry

  3. Thanks Kerry/Antonio for pointing it out. Magnetic pole shift coincides with increased solar activity. North pole switched May 2012, smoothed solar max to date Feb 2012. South pole Dec 2013, and we see the associated spike in sunpots recently, as per the two charts in the above post. So a busy sun at both flips, and cements the likelihood of the smoothed max turning out to be around one of them.

      1. We are in the ‘window’ for speculation to peak out. But we have to allow some months. It doesn’t change the possibilties: either equities were the speculative target and are about to top out, with commodities not featuring, or commodities become a speculative target again and go crazy for 6 months.

    1. This guy Zimmerman has been making the same apocalyptic prediction for each of the last several years. Maybe he will finally be right.

  4. monster sunspot, solar flux shoots… and we are at tidal max, with major conjunction of Mercury, Sun, Venus, Earth and Jupiter
    http://www.hamqsl.com/solarsystem.php

    Sunspot moving towards tidal high next days and Earth directed… potential X-flares and major geomagnetic storm. This can be very very interesting… potentially 🙂

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