Please check the Dashboard daily for updated market commentary.
Due to the specificity of our wave counts we have included a labeling system to break down the level or degree of the wave which represents the size of the underlying trend.
After the last day of trading each week we will go over the most salient points with weekly market comments below.
Please note, all of our updates follow New York, Eastern Time Zone of USA.
Daily Market Recap - 11.14.19 4:54 AM
The waning momentum is clearly displayed as DJIA hit record highs with another round of negative breadth where advance decline ratio was 0.9 to 1. The breadth has been negative throughout this melt up move from 2 weeks ago. The VIX index and CBOE's put to call raio is another solid tools to measure the complacency level for market participants. The record net short position on VIX futures is indicative of market participants expecting low volatility for the remainder of 2019. The put to call ratio just declined to a lowest level since early 2018 at the top of the market. DJIA finally confirmed last week's high of S&P 500, so now all indices are lining up for a huge fall while mainstream media is sketching a rosier picture for the broader indices. We expect the selloff to begin at any moment.
Weekly Market Recap 11.9.19 10:30 PM
The many US companies that loaded up on cheap and abundant debt during the past decade will face a significant hurdle when their bonds mature in the next few years. Most of the U.S. companies already are seeing declining profits and rising leverage, both of which can make it harder for weak companies to keep current on their debt servicing. If economic growth slows further and lenders become less accommodating, any failure to roll over maturing debt could spillover into other parts of the economy including the job market. There are roughly $2.5 trillion of investment-grade bonds now sit on the cusp of junk-bond territory with BBB-ratings and recently Moody’s warned that defaults in junk-bonds could easily exceed the last cycle. Not just the US market but the fact is that debt levels have exploded worldwide and yet at the same time interest rates have never been lower than they are today We think the gravitational forces will eventually bring about a healthy recession. This would cause a significant paring down of debt along with an even greater correction in equity and junk bond markets. That is, if the economy was left alone and market forces were allowed to rectify the imbalances. However, global central banks are fighting these market forces and trying to keep asset bubbles afloat by pushing interest rates even lower and returning to QE. Time will tell if QE4 will have the same efficacy as QE123 but with wave E on standby, the first domino to fall may in fact be in the high yield market and it will fully reveal if QE4 is a dud or successful at creating an even bigger bubble.