Riding The Gravy Train

Beating the market is fun and profitable. This is how we do it.

Saturday, February 16, 2013

Market Update

It continues to look as though a material top is forming, and typically the longer it takes the harder the subsequent fall.  Below is a chart that shows that the 13-day average between highs and lows is matching the lows of the past few decades.

Normally after this happens there is either a massive rally or decline in the stock market.  It's tough to imagine a massive rally at this stage.

The next chart shows margin debt at extreme highs.  Typically this precedes a big drop in equities.

Anecdotally, economic indicators appear to be decaying globally.  For one such anecdote, consider "Wal-Mart has said sales this month have been a “total disaster”, according to leaked internal emails."

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