ORIONS Money Stocks

[livinginstyle]

IMO, this market is in a topping mode. Traders be wary.

The following is from Small Caps Market Place.

The long-term bullish technical picture remains intact, however short-term we could be topping. Major stock markets are coming off hyperextended pictures where the Dow transports are leading the show. Deeper market internals suggest that some indecision is building.

Credit spreads are beginning to widen with Treasury bond yields at historic lows. The advance/ decline line is now sporting a divergence with small-cap stocks waning. (See chart below. **) Q2 earnings estimates are being cut back by the major investment banks; Goldman Sachs (GS) has trimmed Q2 growth to 3% from 3.1% and J.P. Morgan (JPM) has cut back their estimate to 2.6% while Barclays has reduced their estimate to 2.8%.

Earnings of 83 companies reporting to date in the S&P 500 (SPX) are up 9% versus 2013 - so far so good. Bullish sentiment *** (see overview below) has also ebbed and that’s a positive for the market.

Global valuations* remain at the very high end of modeling historically.

Numerous studies also point to the fact that there’s a lot “rotten in Denmark” contributing to the proverbial “wall of worry.”

The above-mentioned whitening credit spreads, if they continue, will definitely take a toll on the market and this could be the “first” hole in the dike that could cause a correction. (Or worse.) A recent study by the Russell Sage Foundation demonstrates just how bad it really is for the middle class; the inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36% decline…

As I have been reporting the number of stretched internals is not only building but becoming alarming. Along with many veteran pundits I do not see “this” ending well. In fact; the bubble has the look/feel of a disaster in the making.

http://www.smallcapnetwork.com/ON-THE-MARKET-Could-be-Topping/s/via/8996/article/view/p/mid/1/id/138/