Study: Hindenburg Omens and other breadth divergences - a warning sign for 2019

Discussion in 'Index Futures' started by Troy Bombardia, Sep 17, 2018.

  1. The stock market has made a long term breadth divergence (same as in early-1987 and 1999)

    Suggests that the stock market will make a major top in 2019

    https://bullmarkets.co/breadth-warning/
     
  2. tomorton

    tomorton

    Assuming this is correct, what to do depends on your investment/trade time horizon.

    If I was in stocks for dividend income, not capital growth, with the intent of willing my shares to my beneficiaries on my death, I would do nothing.

    If anyone's in it for less than this they need an exit strategy.
     
  3. tommcginnis

    tommcginnis

    I think much more cogent is this:
    ☼ the S&P currently sits near a *very* high pe of 25
    http://www.multpl.com/
    ☼ when considered with a smoothed look-back of the last 10 years of earnings
    (increasingly relevant again, as the Great Recession continues to recede into the rear view mirror...), then the S&P sits at an extraordinarily high 33
    http://www.multpl.com/shiller-pe/
    ☼ Earnings have grow *tremendously* well over the last 2-3 years in the S&P, and now sit at $117
    http://www.multpl.com/s-p-500-earnings/

    ☼ The S&P currently sits at 2900.If we merely put a still-above-average multiple of 20 on the S&P, y'know where that puts it? 2340 -- A bear-defined drop of ~20% -- JUST TO GET 'ABOVE NORMAL' for a p-e, instead of 'wayyyyyy above normal' where we are now.

    "So the question you want to ask now is, "Are you feeling 'lucky'? Well? Are you feeling lucky, punk?"
    http://www.multpl.com/s-p-500-real-earnings-growth
    http://www.multpl.com/s-p-500-earnings-yield
    :wtf: