It was a mostly-boring week for economic data.
Right now, I’m looking for signs of an impending SPX correction, given the whole setup of “rising rates” right alongside higher oil prices – a re-run of 1973. I’m starting to see the equity-market correction signals mount.
From last week:
- bad consumer sentiment (67)
- falling retail sales [-2.03% m/m]
- CPI +0.47% [7.12% y/y]
This week:
- MORTGAGE30US +11 bp [to 3.56%], up from 3.05% at Christmas.
Here is something from last month: the amount of equity-market margin debt declined by -8.6 billion to $910 billion dollars. When margin debt drops, that’s often (but not always) a precursor to an equity market correction. The leveraged players are selling their long positions, and liquidating their margin debt. Possibly at the top. The drop in margin debt from December isn’t that large. But this series is always revealed a month too late. How much has it dropped in January? We have no idea. The Wall Street Banksters know this information in real time. But we don’t. Are the decks stacked? At the turning points – definitely.
And that brings up SPX, which fell -5.68% (!) on the week, closing below the 200 MA for the first time since mid-2020. Sector map: bearish, with discretionary leading (-8.92%) along with tech (-7.41%) and financials (-6.88%). That’s a textbook bearish sector map. SPX is now in a clear downtrend. Friday’s close was a 2-month low. While “nothing goes to heck in a straight line” (h/t Wolf Richter), SPX fell 4 days out of 5 this week, and the 1 rally day (Monday) looked pretty pathetic. The close on Friday was right at the lows. That’s not a good sign.
Note: the first hour of trading
by davefairtex 
