Major Sell Off Coming?

Massive M top in Nifty completing and targeting 6000

Check out this chart on the Nifty from StockCharts.com. A massive M top has completed on the Nifty that targets 6000 long term. This incidentally coincides with a trailing P/E of over 24 which is suggestive of over valuation. Note the recent exhaustion candle much like in March 2015 from which the market fell 25%.

Chart of the Week - Cresmont P/E

The Chart of the week is courtesy Gary Gordon via seeking alpha  and shows the Cresmont P/E ratio of the S & P 500. The ratio is currently at well over 2 standard deviations over the mean much like in 1930, 2000, and 2008 when the market experienced substantial sell offs. Will it be any different this time around?

Interesting Market News and Views from Global Financial Markets-10

1) The S&P 500's Projected Index In 2016; Both P/E, Earnings And Economics

From seekingalpha.com - Today, 1:01 PM

The 2016 Index for the S&P 500 will be 1,958.83, a loss of -5.8%.2015 P/E was 19.5X in our current survey (12/1/15) and last survey it was 17.3X, an increase of 12.7%.S&P 500 has gone from 91 (19%) co"

2) 4 Harbingers Of Stock Market Doom That Foreshadowed The 2008 Crash Are Flashing Red Again

From theeconomiccollapseblog.com - Today, 2:21 PM

So many of the exact same patterns that we witnessed just before the stock market crash of 2008 are playing out once again right before our eyes.  Most of the time, a stock market crash doesn't just come out of nowhere."  

3) Should You Fear the ETF?

From www.wsj.com - Today, 12:21 PM

ETFs, after a spectacular run of popularity, are suddenly scaring regulators and some investors. We spell out the dangers—real and perceived."

4) 'It's not 1929 again': statistical evidence we are NOT heading for a bear market

From www.telegraph.co.uk - December 6, 9:54 PM

Is another bear market on its way? History’s lesson suggests there are four key ingredients and none are currently flashing red"

5) Globalization doesn't mean all stock markets are the same

From www.telegraph.co.uk - Today, 2:18 PM

Comment: It's not just about where you invest – but about the character of other investors in that market, writes Richard Evans"

6) The Stock Market Is Missing the Warning From Junk

From www.wsj.com - Today, 12:17 PM

Junk bonds are headed for their first annual loss since the credit crisis, reflecting concerns that a six-year U.S. economic expansion and stock-market boom are on borrowed time."

US Stock Market S and P 500 Index, Fundamental and Technical Snapshot

The S and P 500 has fallen over 2% this year. It is time to get some fundamental and technical perspective on the market. First the fundamentals from Multpl.com. Looking at the Shiller P/E ratio we see that the market is into overvalued territory sporting a #P/E of over 23.

Next looking at the #dividend yield on the S and P 500 below, it is closing in on all time lows also suggestive of an overvalued market.


For a technical picture I turn to Permabear Doomster for some long term perspective. The market appears over stretched long term with no meaning full correction since 2011. It has broken down below 1840 after making a series of lower highs between 1940 and 2135. Market internals have broken down and bearish divergences in market indicators implies downside in the upcoming months. Currently a rally has occurred from the lows near 1800 which may not hold in the future:




Support - 2080
Resistance - 2135


 All in all the risk reward trade for the long term appears to be on the down side.

S and P 500, fundamental and technical snapshot http://t.co/UDrHrs3ZFF pic.twitter.com/z5zjOWLwGp

— samuelR (@RajveerRawlin) September 4, 2015