The market is in a very dangerous situation.
After the mini crash of January and February the market rallied hard – but there are too many things amiss to make it last.
Just a few
- Buybacks are the only force driving the market high (guess what…they were suspended in January). If they keep ongoing like this…it will exceed the 2007 peak
- Capex spend grew 1% (dividend and buyback by 7% YoY)
- Volatility at historical lows (usually a condition for sharp reversal)
- US Treasuries are getting hard to sell (very strangely…or not. The biggest buyer, China, went away)
- Negative EPS guidance at 10 years record
- Brexit referendum June 23
- China is still in the doldrums
- There is political instability in Portugal and Spain – and a wikileak intercepted call indicates that the IMF wants re ignite a Greece problem in July (not a joke there is even a transcript!)
- The oil short covering rally is unwinding
- Migrant crisis re igniting as the European summer is re starting
and much more…so BEWARE
investorpolitico 