This Week In Zerohedge Charts – The Start Of Something Bigger?

By Christiaan van Huyssteen (@cvh23)

Some interesting (scary?) charts that has appeared in Zerohedge over the past 2 or so weeks:

 (All the charts are from Zerohedge, who in turn got it from other places. Click on the heading to view the source. My comments follow at the end.)

Stock Indicator Suggests Big Move (Lower?) Coming

One indicator we do like to keep an eye on is the ADX, or Average Directional Index. It is essentially an indicator of the strength (or lack of strength) of the prevailing trend over a specified period, regardless of the trend’s direction. A high number indicates a strongly trending market and a low number reflects a lack of trend. The traditional default look-back period is 14 days so we tend to stick with that. Interestingly,recent readings of the 14-day ADX applied to the S&P 500 have been among the lowest of the last 65 years, indicating an extremely “trendless” market.

On several days over the past 2 weeks, the ADX reached a reading of 9. Since 1950, there have been just 42 total days – or ¼ of 1% – that saw the ADX that low. Expanding the net to readings of 10 or lower yields 145 days, still less than 0.9% of all days since 1950.

adx low strength

The Last Time This Happened, Chinese Stocks Crashed

Chinese stocks are the most expensive relative to bonds in almost six years.For the first time since June 2009, Bloomberg notes, the earnings yield on the Shanghai Composite Index has dropped below the yield on top-rated corporate debt… and just like in now, stocks rallied 100% in the preceding year beforeplunging over 20% in the next month, and further still in the ensuing months.Already we are seeing Chinese stocks faltering – with a disappointying post-rate-cut move – which leads on analysts to note, “the market will enter a correction phase, and it will be very volatile,” and comments by officials have raised concerns that PBOC will “quickly erode its credibility.”

Chinese bonds vs equities

The US Is In Recession According To These 7 Charts

The evidence continues to mount…

“Most since Lehman” has become the new meme for macro-economic data in the US as day after day brings another lacklustre superlative to be dismissed with some excuse by the cognoscenti of sell-side economists…

US macro surprise

 Of course, that is aside from anything related to aggregate jobs that is spewed by the government’s official ministries of truth… (do not look at this chart)

Job Cuts

So here are seven charts that scream “recession” is here…

Retail Sales are weak – extremely weak. Retail Sales have not dropped this much YoY outside of a recession…

Retail Sales

And if Retail Sales are weak, then Wholesalers are seeing sales plunge at a pace not seen outside of recession…

Wholesale Sales

Which means Factory Orders are collapsing at a pace only seen in recession…

Factory Orders

And Durable Goods New Orders are negative YoY once again – strongly indicative of a recessionary environment…

Durable Goods

Which is not going to improve anytime soon since inventories have not been this high relative to sales outside of a recession.

Wholesale Inventory Sales

And just in case you figured that if domestic prosperity won’t goose the economy, Chinese and Japanese stimulus means the rest of the world will save us… nope!! Export growth is now negative… as seen in the last 2 recessions.

Export growth

And deflationary pressures (Import Prices ex-fuel) are washing upon America’s shores at a pace not seen outside of a recession

Import prices

But apart from that, given that US equities are at record highs, everything must be great in the US economy…

Employed population

Peak Picasso – Did The Art Market Just Flash A “Sell” Signal For Stocks

Like any trend in an unhinged market, it’s next to impossible to predict when the confidence will peak. Based on previous peaks, it could (should) be any time,warns Jason Goepfert, president of Sundial Capital Research.

sp 500 vs picasso art

The Last Two Times This Happened, Stocks Crashed

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