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Wednesday, May 22, 2013

Misc. charts

I ran across a few interesting things lately.  SPX has climbed more then 12% above its 200 SMA.  Here is what happened after the last 9 times we were in this condition.


This is the 7th time since the March 2009 low.  It only happened 3 times in the last bull market and those were all in the first year.  The 2 week return has pretty highs odds of being negative (but not until it stops going up of course).  Last year we dropped 4%.  What happens after that is not so clear.  The last three times the market was lower 2 months later.  Clearly we have a wide range of outcomes over the next three month possible here including a 10% move up or down.  What I find most interesting though is how different this bull market is then the last.  The previous bull market only had 3 occurrences and 12.4% was the highest price ever got above its 200.  This is already the 7th time in this bull market and price was over it by 18% twice.  If this is the most hated bull market why are people bidding up prices excessively over and over again?  It looks more like this is one of the most loved bull markets in history. 

This next chart is about Europe.  I am constantly being told that Europe is fixed.  It seems like the problems have been talked to death, but I don't see that anything has been actually fixed.  Check out this chart.


So non-performing loans have continued to sky rocket in the periphery through out this economic recovery.  Does that look like the banks in Europe are in better shape now then in 2008?  Only Germany is actually better.  Even the rest of the "core" is somewhat worse off.  Is anything really fixed?  I wonder if there is any connection to this next chart.


Yeah, I kind of think there is.  People out of work often have trouble paying their debts.  Europe is still clearly in trouble.  Until they get their economy growing again the risk of banks getting in trouble will still be elevated.  Headline risk is hard to quantify, but in Europe's case it is clearly non-zero like the pundits would have us believe.


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