We’ve mentioned this stat a few times over the last couple of weeks, so much so it’s become expected. Now the SPX run, compared to its 5 day moving average, has made history. From Jon Krinsky: “The current streak of days the S&P 500 has spent above its 5-day moving average, as of yesterday’s close, has reached 28 straight days! This is the longest such streak in the history of the US stock market, surpassing the prior record of 27 days from 1928 – another moment during which there was universal agreement that you had to be in.”
Josh Brown, from thereformedbroker.com blog: ” The market has been a wall for the dip-buyers. Impenetrable. They cannot get in unless they’re willing to pay the all-time high. It’s a high barrier of entry psychologically, especially if they’d been counseling caution all this time to their clients. The about-face could be career-wrecking, especially if it happens at a major top.”
“If the ‘market’ doesn’t close at a new all-time high after 7 out of 7 eco misses, the non-central planning terrorists win.” –Zero Hedge Twitter feed
Goldman Sachs takes down their estimate for 4Q 2014 Real GDP growth by 20 basis points to +2.5%.
From Zerohedge.com: Chicago PMI tumbled back to mediocrity in November, missing extrapolatedly exuberant expecatations by the most since July. As 60.8 (against 63.0 expectations) this is barely above the levels of Q1′s polar vortex as New Orders, Employment, and Production all fell (with only 2 components rising). This is the 4th largest MoM drop since Lehman but MNI remains confident that “the trend remains positive…”
Unexpected weakness in claims has provided a spark for bonds. The TLT(20+ Year T-Bond Fund)is up for the fifth straight session. Factor out the extremely volatile action on October 15th(which resulted in a moderate gain)and the long term end of fixed income could be putting in new 52 week highs today. Rather astonishing considering the near vertical rise in equities over the last five weeks. More here from Doug Short:
“Today’s seasonally adjusted number at 313K was substantially above the Investing.com forecast of 287K. The four-week moving average at 294K is now 15K above its 14-year interim low set three weeks ago. The 21K new claims is the largest weekly increase since August.”
There is a massive divergence currently going on between stocks and corporate bonds. This separation began in late October and has become more extensive of late. We believe this is another, in a very long line, of indications that equities are due for a steep pullback. Stocks may have used up all the bullish power this season usually carries.
Hat tip Steve Cortes.