Chart Of The Day: Bear Market Rallies

Today's chart of the day comes from "Chart of the Day." This clearly shows just how impressive the current rally has been. It is the longest duration bear market rally since 1929 and is close in magnitude to the huge 1929-1930 rally. History doesn't necessarily have to repeat itself, but this should give the bulls some pause. A strong knee-jerk rally following large bear markets is very much the norm, as is a further significant decline. With few ingredients in place for a new secular bull market, things are unlikely to be "different this time."

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Chart Of The Day: Massive Head Fakes

The current rally may feel good, but let's keep in mind the following chart from David Rosenberg at Gluskin Sheff:

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Chart Of The Day: Baltic Dry Index

While the market is busy rallying on backward-looking news, few seem to have noticed that the Baltic Dry Index (BDI) appears to again be rolling over. The BDI measures shipping prices of various dry bulk cargoes and is a solid indicator of what is actually and currently happening in the global economy.

The index had benefited recently from a rebound in commodity purchases (particularly iron ore) by China. However, it is likely that Chinese fiscal stimulus may have led to a stockpiling of ore which will need to be worked down. The recent weakness in the BDI may be corroborating this view. This is one to watch.

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Table Of The Day: CEO Pessimism

Despite analyst and market enthusiasm for better-than-expected earnings results, CEOs have become less confident more recently. Perhaps, they realize that cost cutting is getting more difficult while revenue continues to fall -- an ugly recipe. Their outlook also does not bode well for employment. The market had better hope that the CEOs (Chief Executive Optimists) are wrong.

Table from Chief Executive article:

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Chart Of The Day: Non-Business Bankruptcies

Hat tip to Calculated Risk.




Full CR article

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The Market Rubbernecker is affiliated with Aspera Financial, LLC, a registered investment advisor. Please read the disclaimer on the home page of the Market Rubbernecker site.