Thursday , October 19 2017
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Things you don’t see at market bottoms, Retailphoria edition

Summary:
It is said that while bottoms are events, but tops are processes. Translated, markets bottom out when panic sets in, and therefore they can be more easily identifiable. By contrast, market tops form when a series of conditions come together, but not necessarily all at the same time. I have stated that while I don’t believe that the stock market has made its final cyclical top, we are in the late stages of a bull market (see Risks are rising, but THE TOP is still ahead and Nearing the terminal phase of this equity bull). Nevertheless, psychology is getting a little frothy, which represent the pre-condition for a major top. As a result, this is another post in an occasional series of lists of “things you don’t see at market bottoms”. This week, I focus on more signs of retail

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It is said that while bottoms are events, but tops are processes. Translated, markets bottom out when panic sets in, and therefore they can be more easily identifiable. By contrast, market tops form when a series of conditions come together, but not necessarily all at the same time.

I have stated that while I don’t believe that the stock market has made its final cyclical top, we are in the late stages of a bull market (see Risks are rising, but THE TOP is still ahead and Nearing the terminal phase of this equity bull). Nevertheless, psychology is getting a little frothy, which represent the pre-condition for a major top.

As a result, this is another post in an occasional series of lists of “things you don’t see at market bottoms”. This week, I focus on more signs of retail giddiness.

  • The TD-Ameritrade Investor Movement Index hits an all-time high
  • E-Trade parties like it`s 1999
  • If the market is chasing yield, corporations can get away with murder

TD-Ameritrade IMX at ATH

The TD-Ameritrade Investor Movement Index measures the sentiment of the firm’s customers. The latest update shows IMX at an all-time high since its inception in 2011.
 

Things you don’t see at market bottoms, Retailphoria edition

E-Trade parties like it`s 1999

I present this E-Trade ad without further comment, other than it is reminiscent of a certain other era of investing.
 

Things you don’t see at market bottoms, Retailphoria edition

Cov-lite goes wild

Tracy Alloway highlighted this chart of plunging covenant quality of new US corporate bonds. If the market is chasing yield, issuers can virtually get away with murder…
 

Things you don’t see at market bottoms, Retailphoria edition
About Cam Hui
Cam Hui
Cam Hui has been professionally involved in the financial markets since 1985 in a variety of roles, both as an equity portfolio manager and as a sell-side analyst. He graduated with a degree in Computer Science from the University of British Columbia in 1980 and obtained his CFA Charter in 1989. He is left & right brained modeler of quantitative investment systems. Blogs at Humble Student of the Markets.

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