From The Great Recession Blog
by David Haggith
This past Thursday marked the one-year anniversary of the US stock market’s death when stocks saw their last high. Market bulls have spent a year looking like the walking dead. They’ve tried to push back up to that distant high that means new life several times, but each time the market falls into a pit again.
Today's ultra-low volume, ultra-low-range equity market can be summed up thusly...
Before we get started, just two quick charts to shut the mouths of all those proclaiming this is a hated rally and that sentiment is shitty... it's not!
It has now been a year since stocks hit a new all-time high.
Hard to believe, but for all the gyrations and Central Bank interventions, the S&P 500 remains well below it all time high of 2130 established May 21 2015.
Why does this matter?
Because it greatly increases the odds of stocks entering a bear market.
As Jeff Hirsch noted late last week, going back to 1929, there were thirteen times that stocks failed to hit a new all-time high for a period of 12 months.
Following the latest month abysmal trade and PMI data out of Japan overnight (April exports crashed -10.1 %, worse than the exp. -9.8 and worse than last month's -6.8% while imports plunged -23.3% also far worse than exp. -18.8 and March -14.9%; PMI 47.6, Exp. 48.3, last 48.2), it was supposed to be a straight up for the USDJPY, and its carry linked E-mini.
A little over a month ago, conventional wisdom (and overrated pundits) said that Trump has no chance of being the republican nominee. They were all wrong, but so was the market which continued to ignore the possibility of a Trump presidency until well after the fact. And, as always happens, now is when if not the market, then certainly Goldman's clients are finally trying to catch up. As Goldman strategist David Kostin (who just one week ago warned that there is now a substantial risk of a market drop ahead of the year end), writes "Politics is now a topic in every client discussion."