FINANCIAL ICEBERG
Always consider hidden risks



Jean-Pierre Desloges CFA  is a professional  investment consultant/ blogger/ trader with over 25 years of experience working on the buy and sell-side.

​​I have researched and invested in traditional and alternative asset classes and worked at Pensions Funds, International Banks and Dealers.   
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Market Insight



February 4

SP500 Financials HVol: Capitulation Wave ?

But the most interesting technical factor is that the ​Historical Volatility ( HVol ) on SP500 Financial Sector
​( SRFI ) is spiking at a time that we retested the previous low reached back in February 2014 on SRFI then at the 276.34 level. A tiny form of capitulation we have seen yesterday on Financials. Bulls need to protect that 276 handle zone at all costs from now on...


​​Opinion: It’s the earnings, stupid (and they’re going down)
Sharply lower S&P 500 profits is a warning for stock investors

Are Passive Investors Taking On Far More Risk Than They Realize?

…as this form of investing becomes more and more popular, the risk of mispricings (and even bubbles) in the markets grows with it because it completely abandons the basic process of analyzing value and risk.

​​Bill Gross sees ‘shades of 2007’ in latest investment outlook

Bond king Bill Gross has one question for central banks: ‘How’s it workin’ for ya?’

It’s Groundhog Day Again For The Rising Rates Crowd

Yet another attempt at rising interest rates has spectacularly fizzled out.

​​

​​​​​​​February 3

Nasdaq 100 vs SP100 Ratio: Near Bubble Zone ?
The market still favor the technology stocks over the broad stock market indices. As history repeat itself, we must acknowledge that getting over that Resistance Trendline is getting into a Bubble Game and we must be aware of that when investing...

Irrational Exuberance in Stock Market Knows No Bounds

​January was the winter of our discontented stock market. It was the worst January since 2008, when the Great Recession officially began. It was, in fact, the worst January in the history of the New York Stock Exchange. According to Citigroup, Inc., it was also the worst January ever for credit markets.

​​Don’t Dismiss The Systemic Risk Of A Corporate Credit Bust
After the worst start to a new stock market year in history, some have begun to wonder if the unusual weakness is a sign of larger problems in the economy or financial system. Certainly, the growing strains in the credit market suggest it’s more than, “just an energy thing.”

​​Citi Asked Its Clients if We're Heading Into a Bear Market, and This Is What They SaidIs it a bear? Is it a correction? No, it's a markets mystery!

The Incredible Growing Dividend
​One of the most consistent forms of investment income actually comes from the stock market. Although stock prices themselves are quite volatile, the cash flows companies collectively pay out to investors don’t really fluctuate as much as one would think.

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​​​​February 2

SP500 Financials Weekly: No Market Participation ?
We are quite near of October 13 week 2014 low that was made at ​the 21.55 level; close of February 2 2016 was 21.63. Also near thesupport trendline that started back since February 2015.​

SP TSX60 Index (XIU ETF): Still into a Falling Wedge ?
But the most interesting technical factor is that on a Relative Basis ( XIU ETF over SPY ETF ), we are testing the resistance trendline from a Major Falling Wedge that started since May 2009. Breaking that resistance will bring a strong outperformance of the Canadian Stock Market over the Americain one...

Fundamentals point to rough year for S&P 500
Among nearly the half of the S&P 500 companies that have already reported fourth-quarter earnings, more than two-thirds reported results above Wall Street expectations, but the reward for beating estimates so far has been minimal.

3 Key Lessons for Investors from This Year’s Roller-Coaster Market
Stock market gyrations can be upsetting, especially when they send the value of your 401(k) and other accounts south in a hurry. But periods of turmoil can also be helpful if we use them to re-evaluate our investing and planning strategies.

​​In volatile markets, look for companies still growing their dividends: BMO
In periods of elevated market volatility, investors ought to look to stocks that are growing their dividend for stability and fortitude rather than ones with only a high yield.
​​

​​​​​​​February 1

DJ Transports / SP500 Index Ratio Technicals: Major Support Broken ?
But the most interesting technical factor is that it is the first time that we have that ratio (Dow Jones Transportation ​to the Mighty) broke the Monthly Major Support Trendline that started back in January 2008. 

The Gas Pedal Is Useless When The Spark Plugs Are Gone
The upshot is that valuations, economic data and central bank actions have to be interpreted within the context of prevailing market internals and the investor risk-preferences that they convey. When investors are risk-averse and internal support has dropped away, a small change in interest rates is simply not sufficient to encourage risk-seeking.

​​​​​Despite negative January Barometer, door still open to a positive year
Devised by Yale Hirsch in 1972, the January Barometer has registered eight major errors since 1950 for an 87.9% accuracy ratio. This indicator adheres to propensity that as the S&P 500 goes in January, so goes the year.

​​Junk bonds suffer a rare negative return in January--
and that’s bad news for stocks 
The U.S. high-yield, or “junk” bond market, has started the year on the back foot, which history suggests could be a very bad sign for the stock market. The negative return is especially significant, given that the month of January has recorded positive returns in 25 of the 29 years that the B. of A. high-yield index has existed...

January 26

SP500 Financials (XLF) : In a Bad Mood ?
But what bring all my attention is that the Sentiment Index on Financials (SP500 Financial Sector Bullish % Index) reached a level not seen since October 10 2011. We can say that Financials are in a Bad Mood... ​

Why the January Barometer works and other observations

Our flagship indicator, the January Barometer created by Yale Hirsch in 1972, simply states that as the S&P goes in January so goes the year...
​​
​​​​Moody’s Explains Why Junk Bonds Will Sink Stocks Further
A wider-than 800 basis-point high-yield spread reflects elevated risk aversion that will reduce capital formation and spending by non-investment-grade businesses. In addition, ultra-wide bond yield spreads favor a continuation of equity market volatility that should sap the confidence of businesses and consumers.
​​

​BlackRock Says Clients Are Shifting Away From Stocks
​BlackRock Inc., said investors are turning to more-illiquid holdings such as real estate and private credit as they seek to generate returns and combat market volatility.

Apple set to report flatlining iPhone sales
World's biggest listed company close to losing status as sales of its smartphones forecast to decline later this year ...

​​
​​​January 25

SP500 Technical Behavior: A SP(OIL)ed Market ?
​Market have become so nervous that the pure and simple Risk On Risk Off is in summary the way OIL price is evolving; a scary trend indeed...​​

Cda TSX Small Cap Index: November 2008 Critical Support Tested ?
But the most interesting technical factor is that we tested last week the Major Support on a relative basis. For Technical strenght, we need to stay above that old Major Support reached back on November 2008.

Weekly Market Summary
The risk comes from oil prices, which remain too volatile to predict and which have been highly correlated to equities for several weeks.

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