Chart of the Week

When US Financial Conditions Collapse the Stock, Market Is Sure to Follow. As you can see from the chart below that goes back 30 years, when US financial conditions go down, the stock market inevitably follows. The chart, which was produced before the end-of-the-week downturn, is among many historically accurate indicators we’ve been using that have told us a big…

Low S&P 500 Short Interest is Another Sign Stock Investors Are Overly Complacent. As you can see from the chart below, median short interest on the S&P 500 as a percentage of market cap is the lowest in years.  And that  means hedging against a downturn by shorting also is at its lowest in years….

IPOs at Record Levels Often Signal  Stock Market Tops. As the chart below shows, an estimated $60 billion in initial public offerings that are headed for the stock market this year could be an all-time record.  That is raising eyebrows for many astute market veterans because historically when IPOs flood the market what follows are big declines. …

Low Dividend Yields Are Another Stock Market Warning Signal. As stock prices rise, obviously dividend yields decrease as a percentage of the price you would pay. It is worth pointing out that over the last 100 years, half of the returns in the stock market have come from dividend yields. So, it follows that low…

Here’s Another Important Bearish Indicator: Company Insiders Sold Big Into Major Market Rebound. As the insider transactions ratio chart below shows, major selling by company insiders has moved this indicator’s market forecast from bullish to bearish. The Thompson Reuters chart shows the ratio of insider sales to buys at 44. That’s well into bearish territory….