Tuesday, October 18, 2016

Indicators Of Stock Market Weakness
"We find ourselves turning a bit more bearish of equities in global terms and quite a good deal more bearish of equities here in the U.S., for a number of reasons. Firstly, we continue to look upon the peak in margin usage which was forged back in mid-’15 as evidence that a peak has been made, for margin usage tends to 'top out' a year or more ahead of the equity market itself. Secondly, we are more and more dismayed by the manner in which even the slightest 'miss' regarding earnings manifests itself in sharply weaker share prices, and nowhere was that more evident than in the collapse of Alcoa’s price last week when earnings missed by only a few cents/share and yet share prices were down nearly 15%. .. Thirdly… and this is perhaps a bit 'parochial' in scope, but the close on Friday was disturbingly ill, for after having opened sharply higher in the morning, the close hard upon the day’s lows. This is not how healthy markets trade; this is, however, how ill markets turn for the worse."
- Dennis Gartman
link here to the reference

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