February 20, 2017

Market continues its push higher until......

The rise in equities has been unrelenting. The bears have been bloodied. Volatility has collapsed.

Bond prices are dropping posthaste as yields may begin to provide competition to equities. Certain valuation metrics are in the 98% decile.

Complacency may be at an extreme, as there is NO fear of a market drawdown.

Stocks and sectors (especially of a financial kind) are in dangerous territory, driven by ETFs, indexing and quant strategies that are divorced from fundamentals.

......The president's policies are very far from being adopted. The global economy's trajectory is fragile and vulnerable, sovereign/public/corporate debt is high and the Fed is no longer market-friendly.

A market blow may be at hand.

As for signposts: Watch for a continuation of deteriorating breadth ..... and a decline on higher volume.