Reconozco q a mi tb me tiene confusamente sorprendido .....
Bear Watch
Yes, I am currently beating the bull market drum. And good thing as the FOMO rally keeps charging to new highs.
However, as shared in recent commentary, I am not losing sight that a bear market could emerge around the corner. As such, I have a daily calendar reminder pop up to keep me vigilant.
I thought it would be good to share with you the details I currently have in that note as it states what are the technical and fundamental signs to be wary of:
Technical Breaks: each successive level lower = more trouble = get more defensive
2100 interesting
2090 = 50/65 day
2050 = old spot of major technical action
2035 = 200 day
Fundamentals
Earnings Yield Spread: Serious narrowing would be the warning sign
Rates rallying higher like 2%+ for 10 year.
Recession risk on the rise leading to much lower earnings, thus lowering EY, thus narrowing spread
Stocks soaring too much lowering EY, thus narrowing spread
Brexit/Europe
7/19 ZEW Survey shows that German finance professionals concerned about business outlook
7/20 European Consumer Confidence continues to sink (but European stocks continued to push higher)
Dollar strengthening hurts exporters = watch manufacturing data
7/20 = 97 cents = highest level since March. Getting closer to $1 will raise eyebrows
Yes, that's a long list of things to worry about. But gladly the list of bullish reasons to be optimistic is much longer, which is why stocks keep rallying. That is why I say now is a time to ride the bull.
