RPT MTA 2016 05 Peek

Monthly Market Analytics & Technical Analysis
MAY 2016 Edition
FULL REPORT
MATA- MAY 2016
5/16/2016
1 MAY 2016 Edition

Copyright 2016 Gordon T. Long All Rights Reserved
Restricted & Confidential

general@GordonTLong.com
Monthly Market Analytics & Technical Analysis

MAY 2016
HIGHLIGHTS - WHAT YOU NEED TO KNOW ................................................................................................................................. 16
SUMMARY ANALYSIS ............................................................................................................................................................................................ 16
Era of Delusional Distortions & the Super Cycle Pivot b .................................................................................................................................... 31
Defining Chart #1 - "Delusional Distortion" Expectations & the Log-Periodic Cycle ......................................................................................... 33
Defining Chart #2 - Finding the Longer Term Super Cycle Pivot b ................................................................................................................ 34
Defining Chart #3 - The Big M and Super Cycle b ....................................................................................................................................... 35
Defining Chart #4 Intermediate Term Topping Process ................................................................................................................................. 37
Boundary Conditions ......................................................................................................................................................................................... 38
Channels & Regressions ................................................................................................................................................................................... 39
OUR APPROACH - MACRO ANALYTICS ...................................................................................................................................... 48

MAY 2016: Global Macro Drivers ............................................................................................................................................................................ 50
NEW-WEALTH .................................................................................................................................................................................................. 52
UPDATED-HARD ASSETS - Gold ................................................................................................................................................................ 52
UPDATED-HARD ASSETS Silver .............................................................................................................................................................. 54
HARD ASSETS Historical Gold:Silver Ratio .............................................................................................................................................. 56
NEW-UPDATED-HARD ASSETS - Gold;Silver Ratio ................................................................................................................................... 57
UPDATED-HARD ASSETS - Commodities .................................................................................................................................................. 58
NEW-EXCHANGE ............................................................................................................................................................................................. 59
UPDATED-CURRENCIES - USD .................................................................................................................................................................. 59
UPDATED-CURRENCIES - EURO ............................................................................................................................................................... 60
UPDATED-CURRENCIES - YEN .................................................................................................................................................................. 61
UPDATED-CARRY TRADE - The : Cross ............................................................................................................................................... 62
UPDATED-CARRY TRADE - The $: Cross ............................................................................................................................................... 64
NEW-YIELD, CREDIT & SPREAD .................................................................................................................................................................... 65
NEW-EQUITIES - Global ................................................................................................................................................................................... 67
CHARTS & RESEARCH OF NOTE .................................................................................................................................................................. 68
CREDIT .......................................................................................................................................................................................................... 68
NEW-CREDIT EU Credit Ratings Could Be Cut If UK Leaves, Fitch Warns ......................................................................................... 69
NEW-CREDIT Moodys lowers credit ratings for Saudi Arabia and other Gulf oil producers ................................................................. 70
CREDIT Current Gauge of US Credit Markets ....................................................................................................................................... 72
CREDIT Credit versus S&P versus Fed Actions .................................................................................................................................... 73
CREDIT US CLOs Down Significantly .................................................................................................................................................... 73
CREDIT US CLOs Issuances Falling Off ................................................................................................................................................ 74
CREDIT Gross Leverage for Typical IG/HY in Debt-to-EBITDA ............................................................................................................ 74
CREDIT Leveraged Loans and HY Corporate Bond Yields Point to Lower Equities ............................................................................. 75
YIELD ............................................................................................................................................................................................................. 76
NEW-YIELD The Bond Market is Screaming Economic Slowdown Equity Markets Hear Fed Stimulus! ..................................... 76
YIELD historic correlation between stock and bond prices is now very distorted .................................................................................. 77
YIELD US Corporate Bond Market - $1T in HY & $4.5T in IG ............................................................................................................... 77
YIELD Negative Interest Rates on 40% Of Outstanding European Government Bonds ....................................................................... 78
YIELD Global Bond Yields ...................................................................................................................................................................... 78
YIELD Less Than ZIRP Global Comparisons ......................................................................................................................................... 79
YIELD Flattening UST Yield Curve Moving Towards Inversion .......................................................................................................... 79
COMMODITIES ............................................................................................................................................................................................. 80
NEW-COMMODITIES YTD Commodity Result Comparisons ............................................................................................................... 80
COMMODITIES YTD Commodity Result Comparisons ......................................................................................................................... 80
COMMODITIES WTI- Log Scale of Price and Percentage Change....................................................................................................... 81
COMMODITIES Real Oil and Average Oil Price Since 1861 ................................................................................................................. 81
COMMODITIES Copper Falls To Fresh 6 Years Low After $GS Says Metal "Poised To Move Even Lower" ...................................... 82
INFLATION .................................................................................................................................................................................................... 83
INFLATION Probability of March Fed Rate Hike = Zero = Weak Inflation ............................................................................................. 83
INFLATION March Rate Hike Odds Falling Rapidly ............................................................................................................................... 84
INFLATION Expected Inflation- One Year and Three Years Ahead ...................................................................................................... 84
PRECIOUS METALS ..................................................................................................................................................................................... 85
NEW-PRECIOUS METALS HARD ASSETS - Smart Money" Has Never Been More Bearish On Silver ............................................. 85
PRECIOUS METALS HARD ASSETS - Classic Ending Diagonal in Gold ............................................................................................ 86
PRECIOUS METALS HARD ASSETS - Gold;Silver Ratio Long Term ............................................................................................... 88
PRECIOUS METALS HARD ASSETS - Gold;Silver Ratio Intermediate Term Term-1 ...................................................................... 88
PRECIOUS METALS HARD ASSETS - Gold;Silver Ratio Intermediate Term Term-2 ...................................................................... 89
PRECIOUS METALS Gold Breaking Out Deutsche Bank Driven? ..................................................................................................... 89
PRECIOUS METALS Gold Breaks Out At Exactly Year Beginning? ..................................................................................................... 89
PRECIOUS METALS Barrels of Oil per Ounce of Gold ......................................................................................................................... 90
RISK: Risk-On versus Risk-Off ................................................................................................................................................................................ 91
CHARTS OF NOTE ........................................................................................................................................................................................... 92
NEW-RISK The Bond Market is Screaming Economic Slowdown Equity Markets Hear Fed Stimulus! ........................................... 92
NEW-RISK Repeating August 2015 Yuan Devaluation Pattern ................................................................................................................. 92
NEW-RISK Repeating One Year E-Mini Pattern ........................................................................................................................................ 93
NEW-RISK Lack of Volatility is a Very Worrying Sign ................................................................................................................................ 93
MAY 2016 Edition


NEW-RISK Global Equity Indices Show Clear Trend Channel with Pre-US Election Turbulence ............................................................ 94
NEW-RISK A 5-15% Draw-down should be expected by or within Q3 2016 ............................................................................................. 94
NEW-RISK Investors Clearly Exiting US Equity Markets ........................................................................................................................... 95
NEW-RISK Investors Clearly Exiting US Equity Markets ........................................................................................................................... 95
NEW-RISK Minimizing Volatility The Five Most Popular Exchange Traded Funds This Year ............................................................... 96
NEW-RISK Bracing for Volatility Investors Are Betting Volatility Will Rise ............................................................................................. 96
NEW-RISK Determined Shorts Short Interest Remains Near Bull Market Highs ................................................................................... 96
NEW-RISK Investors Flee Mutual Funds Money Has Left Mutual Funds the Last 8 Straight Weeks ................................................... 97
NEW-RISK Corporate Buybacks is the Lone Marlet Buyer ........................................................................................................................ 97
RISK 2016 Y-o-Y Flows By BoAML Client Type ........................................................................................................................................ 98
RISK BoAML Client Type Net Buys 4WMA v S&P 500 2008-Present .................................................................................................. 98
RISK BoAML Client Type Cumulative Flows Since January 2008-Present ............................................................................................. 99
RISK USDJPY Correlation to S&P 500 ....................................................................................................................................................... 99
RISK Breadth Has Turned Counter Rally Stalling .................................................................................................................................. 100
RISK Wall Street's recent rise is stretched relative to the real U.S. economy .......................................................................................... 101
RISK Diverging gap between stocks and corporate-profit expectation ..................................................................................................... 101
RISK historic correlation between stock and bond prices is now very distorted ....................................................................................... 101
RISK Nasdaq risk is dramatically higher than S&P risk ........................................................................................................................... 102
RISK Draghis ECB Announcement Triggers Bull Reversal To Evercore ................................................................................................ 103
RISK High Probability US Recession in 2016 .......................................................................................................................................... 104
RISK Price-to-Sales Presently Second Highest to the Dotcom Bubble Collapse .................................................................................... 104
RISK Industrial Production Is Rolling Over ............................................................................................................................................... 105
RISK NYSE Margin Debt at Record Levels .............................................................................................................................................. 106
RISK Margin Debt to GDP Higher then 2000 and 2007 ........................................................................................................................... 107
RISK Margin Debt to GDP and 3-Year Stock Returns ............................................................................................................................. 108
RISK Margin Debt to GDP and 3-Year Stock Returns ............................................................................................................................. 109
RISK Investors Sell Dividend Funds, MLPs, REITs and High Yield......................................................................................................... 110
RISK Bull to Bear Ratio Unprecedented Optimism ............................................................................................................................... 111
RISK Turmoil in High Yield Bonds ............................................................................................................................................................ 112
RISK New Global Risk US Growth European Financial Conditions ................................................................................................... 113
RISK Leveraged Loans and HY Corporate Bond Yields Warn of Possible SPX of 1100 ........................................................................ 113
RISK Global Financial Risk ....................................................................................................................................................................... 114
RISK US Financials Stocks versus Credit ............................................................................................................................................. 114
RISK Something Is Seriously Wrong Somewhere in Deutsche Bank 5Y Sub CDS ............................................................................. 115
RISK Something Is Seriously Wrong Somewhere in Deutsche Bank Lehman Comparison ................................................................ 115
RISK Something Is Seriously Wrong Somewhere in Deutsche Bank Ending Diagonal Goes Lower .................................................. 116
RISK Small Cap Stocks versus HY Bond Spread .................................................................................................................................... 116
RISK Net Cash Companies Scarce EBITDA Cash Flow ................................................................................................................... 117
RISK Falling Animal Spirits - Sinking CEO Confidence ........................................................................................................................... 117
RISK Bull-Bear Ratio Collapses ............................................................................................................................................................... 118
RISK SPX Percent off 2009 High ............................................................................................................................................................. 119
RISK SPX Price-Earnings-PE Ratio ......................................................................................................................................................... 119
RISK Stock market more Over-valued than prior to Previous Crashes! .................................................................................................. 120
RISK Coppock Signaling Problems Ahead ............................................................................................................................................... 120
RISK Junk Bond Movements Have Been Dependable Warning Indicators Since Dotcom Bubble Burst ............................................... 121
RISK Corporate Profits and Wages Diverge ............................................................................................................................................ 121
RISK Russell 1000 Equal Weight: Cap-Weight Ratio ........................................................................................................................... 122
RISK Long Term Monthly Reversal Signal ............................................................................................................................................... 122
RISK Markets Historically Fail after Three months of Falling Margin Debt We Have 2 Months ........................................................... 123
RISK Margin Debt Channel is Pretty Clear High Odds of Troubles Ahead........................................................................................... 123
RISK Goldman Joins the Chorus Warning on Bond Market Liquidity ...................................................................................................... 124
RISK So Goes Retail So Goes the US Economy .................................................................................................................................. 124
RISK Consumer Discretionary Sending Signals....................................................................................................................................... 125
RISK Net EBITDA 2x Highest since 2006 % of companies with net cash Lowest since 2006 ................................................................ 127
RISK US Corporate Net Debt Has Exploded & Now Massively Exceeds EBITDA .................................................................................. 127
RISK CBOE Skew Index ........................................................................................................................................................................... 128
RISK Gap Between Uncertainties Priced in the Debt & Equity Markets .................................................................................................. 128
RISK Beware of EPS manipulation........................................................................................................................................................... 129
RISK Total NYSE Short Interest & Monthly Change ................................................................................................................................ 130
RISK Contrasting Post October Market Drawdowns 1973s Slow Pain versus 1987 Crash............................................................... 130
RISK Historical Post-Crash Price Actions 1950 to 2015 ....................................................................................................................... 131
TECHNO-FUNDAMENTALS ................................................................................................................................................................................. 132
CHARTS OF NOTE ......................................................................................................................................................................................... 132
NEW-CHARTS Market Phases Methodology of Richard Wyckoff ........................................................................................................ 132
NEW-CHARTS Does Oil Suggest 2016 Markets Will Follow 2015? ........................................................................................................ 133
NEW-CHARTS Defensive Stocks Get Pricey PE In Safer Industries Climbing .................................................................................... 134
NEW-CHARTS Sell Side Consensus Indicators Suggest Wall Street Doesnt Believe in this Rally ....................................................... 134
NEW-CHARTS Earnings Are The TellTail Between a Bullish Consolidaation & a Bear Market Top ..................................................... 135
NEW-CHARTS Warning Signal Setup of the 50DMA Cross of 200DMA ................................................................................................ 135
CHARTS A Major Rounded Top Pattern .................................................................................................................................................. 136
CHARTS Nov 1994-March 2000 Internet Bubble Comparison to March 2009-Current .......................................................................... 136
CHARTS Is This Rally About Keeping Averages in the Green as We Enter IRA/RSP Tax Deposit Time? ............................................ 137
CHARTS An Established Downward Trend Channel Since High in June 2015 ...................................................................................... 137
CHARTS Divergence in DJ Industrial Average and Transportation Average .......................................................................................... 138
CHARTS SPX has returned into the area of congestion that contained it prior to the January sell-off ................................................... 139
CHARTS Analogy: DJIA, 1961 1962 ..................................................................................................................................................... 140
MAY 2016 Edition


CHARTS Current Counter Rally Comparison to 2000 Tech Bubble Collapse ......................................................................................... 140
CHARTS Current Counter Rally Comparison to 2007 Financial Crisis .................................................................................................... 141
CHARTS Cumulative Flows by BoAML Client - January 2008-Present .................................................................................................. 141
CHARTS 2016 YTD Flows by BoAML Client Type .................................................................................................................................. 142
CHARTS Upside Break of 2010 => 2085, Downside Break => 1963-1931 and 1902-1891 ................................................................... 143
CHARTS 4 Week MA of Total Net Buys by BoAML Client - January 2008-Present .............................................................................. 144
CHARTS BoAML Corporate Clients 4 Wk Average Buybacks Y-o-Y % Change .................................................................................... 145
CHARTS S&P 500 versus Forward EPS .................................................................................................................................................. 146
CHARTS Clear Signs Of A Market Trying To Roll-Over Against Corporate Buybacks Mysterious Buying ............................................ 146
CHARTS Classic Ending Diagonal In Gold .............................................................................................................................................. 148
CHARTS Value Line Geometric Composite Short Term A 38.2% Retracement ............................................................................... 148
CHARTS Value Line Geometric Composite Long Term A 38.2% Retracement with 23.6% Bounce ............................................... 149
CHARTS MSCI World Index 7.5 Year Cycle ......................................................................................................................................... 150
CHARTS World Equity Markets Have Now Lost Over $16.8 Trillion ....................................................................................................... 150
CHARTS Global Bear Markets ................................................................................................................................................................. 151
CHARTS Possible Head & Shoulders in Play with a Target of 1600 ....................................................................................................... 152
CHARTS Possible Small Degree Head & Shoulders in Play with a Target of 1725 ................................................................................ 152
CHARTS Possible Corrective A-B-C Near Completion .......................................................................................................................... 153
CHARTS Cumulative Flows By Client Type January 2008-Present ..................................................................................................... 153
CHARTS Total World Index Fund versus Long Term Fund ..................................................................................................................... 154
CHARTS Global DOW Drops To Next Support Level .............................................................................................................................. 154
CHARTS VIM remains negative across the board since mid-Nov. .......................................................................................................... 155
CHARTS A falling VIGOR shows net distribution ..................................................................................................................................... 156
CHARTS The RRG reflects a defensive or risk off market....................................................................................................................... 157
CHARTS The average stock in the developed world is off 23% from its 1-year high .............................................................................. 158
CHARTS The average stock in the developed world is down 8% over the past year ............................................................................. 158
CHARTS 52% of all developed world stocks are in a bear market over the past 200-days .................................................................... 159
CHARTS The average energy company is down an astounding 40% of its 1-year high. ........................................................................ 159
CHARTS The average stock in DM Americas is down 14%in the last year ............................................................................................ 160
CHARTS International and Emerging Market Divergence ....................................................................................................................... 160
CHARTS US versus World Stocks ........................................................................................................................................................... 161
CHARTS S&P 500 With and Without FOMC Meeting Dates ................................................................................................................... 162
CHARTS The Median Stock In The World Is Flat YTD ............................................................................................................................ 163
CHARTS 70% of EM Stocks are Still Down More Than 20% from 200-Day Highs ................................................................................. 163
CHARTS Year End Overhead Resistance to Santa Claus Rally ............................................................................................................. 164
CHARTS Professionals Are Leaving the Party Early ............................................................................................................................... 164
CHARTS NYSE Advance-Decline Line versus S&P ................................................................................................................................ 165
CHARTS A month-long bearish divergence for the US 15 most active advance-decline line ................................................................. 166
CHARTS A-D line preceded or coincided with big breakdowns for the S&P 500 in 2000 and 2007 ....................................................... 166
CHARTS A major bearish divergence for global A-D line in US Dollars .................................................................................................. 167
CHARTS Be Alert to Oversold Pull Back Before Seasonal YE Strength ................................................................................................. 168
CHARTS Leading Indicators Support View The Current Weakness May Turn into a Buying Opportunity ............................................. 169
CHARTS Problem in US Retail Developing ............................................................................................................................................. 170
CHARTS Gold Reacted to Chinese Devaluation ..................................................................................................................................... 171
CHARTS The DOW Theory & DOW Transports ...................................................................................................................................... 172
CHARTS October- A Month for the History Books ................................................................................................................................... 173
CHARTS The Smart Money Has Never Been This Long the Long Bond ................................................................................................ 174
CHARTS Real S&P 500 Index Cycles with Recessions .......................................................................................................................... 175
CHARTS Quarterly Overbought Cycles ................................................................................................................................................... 175
CHARTS Monetary Velocity Declines as Excess Leverage Weights on Consumption ........................................................................... 175
CHARTS The Real Value of Cash ............................................................................................................................................................ 176
CHARTS Consumer Sentiment versus S&P 500 ..................................................................................................................................... 176
OUTLOOK - ANALYTICAL ANALYSIS .......................................................................................................................................... 178

SHANGHAI ACCORD An Update....................................................................................................................................................................... 178
CHARTS OF NOTE ......................................................................................................................................................................................... 178
NEW-SHANGHAI Roadmap We Expect ................................................................................................................................................... 178
NEW-SHANGHAI Timeline Proof .............................................................................................................................................................. 179
NEW-SHANGHAI Consequences: Asset Allocation Shift ......................................................................................................................... 179
NEW-SHANGHAI EURUSD Weekly ......................................................................................................................................................... 180
NEW-SHANGHAI EURUSD Daily ............................................................................................................................................................. 180
NEW-SHANGHAI USDJPY Weekly .......................................................................................................................................................... 181
NEW-SHANGHAI USDJPY Daily .............................................................................................................................................................. 181
NEW-SHANGHAI USD Daily ..................................................................................................................................................................... 182
Q1 EARNINGS An impending macroeconomic and profits implosion ............................................................................................................. 183
STUDY: Q1 EARNINGS ..................................................................................................................................................................................... 183
CHARTS OF NOTE ......................................................................................................................................................................................... 183
NEW-Q1 EARNINGS Q1 Earnings Growth .............................................................................................................................................. 183
NEW-Q1 EARNINGS Q1 Revenue Growth .............................................................................................................................................. 184
NEW-Q1 EARNINGS Q2 Earnings & Revenue Growth Projections ........................................................................................................ 184
NEW-Q1 EARNINGS Ongoing deterioration in Sales and Profits ........................................................................................................... 186
NEW-Q1 EARNINGS LTM Quarterly S&P 500 GAAP and Non-GAAP EPS........................................................................................... 187
NEW-Q1 EARNINGS S&P 500 Annual GAAP and Non-GAAP EPS ....................................................................................................... 188
Q1 EARNINGS S&P Forward Earnings Expectations versus S&P 500 .................................................................................................. 189
Q1 EARNINGS Falling Profits Now in Contraction Territory Lowest Levels Since 2008 ...................................................................... 190
Q1 EARNINGS Top Line Sales and Revenue Growth is Clearly Falling ................................................................................................. 190
MAY 2016 Edition


Q1 EARNINGS Pro-Forma and GAAP Earnings Diverge Significantly ................................................................................................... 190

Q1 EARNINGS Profits Fall the Most Since 2008 ..................................................................................................................................... 191
Q1 EARNINGS Corporate Profits as a Percentage of GDP .................................................................................................................... 192
Q1 EARNINGS Peaks in Real Profit Margins versus S&P 500 ............................................................................................................... 192
Q1 EARNINGS Biggest Quarterly Drop in Profits Since 2009 ................................................................................................................. 192
Q1 EARNINGS Largest S&P Q1 EPS Drop in first 2 Mo of a Quarter Since Q1 2009............................................................................ 193
Q1 EARNINGS S&P 500 Earnings Growth Q1 2016 Down -8.3% .......................................................................................................... 194
Q1 EARNINGS S&P 500 EPS: GAAP vs. Non-GAAP ............................................................................................................................. 194
Q1 EARNINGS S&P 500 EPS: GAAP vs. Non-GAAP for FY 2015 vs. 2014 .......................................................................................... 195
Q1 EARNINGS Non-GAAP EPS Writeoffs ............................................................................................................................................... 196
Q1 EARNINGS 2015 Y-o-Y % Change in EPS GAAP vs Non-GAAP ..................................................................................................... 196
Q1 EARNINGS S&P Trailing 4-Quarter GAAP vs. Non-GAAP Net Margins ........................................................................................... 197
RESEARCH OF NOTE .................................................................................................................................................................................... 197
NEW-Q1 EARNINGS The True State Of The US Consumer: All Six Retail Companies Reporting April Comp Sales Missed .............. 197
NEW-Q1 EARNINGS This Tech Bubble Is Bursting ................................................................................................................................ 199
NEW-Q1 EARNINGS Amazon Smashes Expectations On Surge In Cloud Profits ................................................................................. 201
NEW-Q1 EARNINGS Carl Icahn Dumps Entire Stake Of AAPL .............................................................................................................. 204
NEW-Q1 EARNINGS JPM Summarizes Earnings Season So Far: At -8%, The S&P500 Q1 EPS Growth Is The Worst Since 09 ... 206
NEW-Q1 EARNINGS S&P 500 EPS Divergence ..................................................................................................................................... 209
NEW-Q1 EARNINGS Apple Tumbles After Missing Sales And Earnings, Guides Below Lowest Estimate ........................................... 209
Q1 EARNINGS Behind U.S. GDP Data - Weak Profits ........................................................................................................................... 216
Q1 EARNINGS When the "Mother's Milk" of Earnings Runs Dry ............................................................................................................ 217
Q1 EARNINGS Why Companies Don't Want You To Look At GAAP Earnings ...................................................................................... 219
Q1 EARNINGS Largest Drop in S&P 500 EPS Estimate Over First Two Months of a Quarter since Q1 2009 ...................................... 224
Q1 EARNINGS Non-GAAP Earnings Are About To Plunge The Most Since 2009; As For GAAP Don' Even Ask ................................ 225
MARKET BOUNCE Tell Tales of a Bear Market Counter Rally ......................................................................................................................... 231
CHARTS OF NOTE ......................................................................................................................................................................................... 232
NEW-BOUNCE Sell Side Consensus Indicators Suggest Wall Street Doesnt Believe in this Rally ...................................................... 232
NEW-BOUNCE A 5-15% Draw-down should be expected by or within Q3 2016 .................................................................................... 232
NEW-BOUNCE Probabilities of a Draw-down in Next Three Months ...................................................................................................... 233
BOUNCE Current Counter Rally Comparison to 2000 Tech Bubble Collapse ........................................................................................ 233
BOUNCE Current Counter Rally Comparison to 2007 Financial Crisis ................................................................................................... 235
BOUNCE Biggest short squeeze on record ............................................................................................................................................. 235
BOUNCE Long Term MACD suggesting a high probability rebound top ................................................................................................. 236
BOUNCE Major Divergence of S&P 500 and NYSE McClellan Oscillator ............................................................................................... 236
BOUNCE Weekly Momentum Reaching Overbought Territory ................................................................................................................ 237
BOUNCE New Hedging Strategies Employed in this Counter Rally ........................................................................................................ 238
BOUNCE Breadth Has Turned Counter Rally Stalling .......................................................................................................................... 238
BOUNCE Wall Street's recent rise is stretched relative to the real U.S. economy .................................................................................. 239
BOUNCE Diverging gap between stocks and corporate-profit expectation ............................................................................................. 240
BOUNCE Historic correlation between stock and bond prices is now very distorted .............................................................................. 240
BOUNCE Historical Topping Process Structural Momentum Analysis ................................................................................................. 241
BOUNCE Current Topping Process Structural Momentum Analysis .................................................................................................... 242
BOUNCE Credit and Equity Will Converge. ............................................................................................................................................. 243
BOUNCE Value Line Geometric Composite Short Term A 38.2% Retracement .............................................................................. 244
BOUNCE Value Line Geometric Composite Long Term A 38.2% Retracement with 23.6% Bounce ............................................... 244
BOUNCE Bear Market Rally Trend Support Line Is Gone ....................................................................................................................... 245
BOUNCE AAII Investor Sentiment Bears/Bulls Triggered a BUY at the recent market lows .................................................................. 246
BOUNCE Percent of S&P 500 Stocks above 50 and 200 DMA ............................................................................................................... 246
BOUNCE NYSE Overbought / Oversold .................................................................................................................................................. 247
BOUNCE Trend Channel Now Down ....................................................................................................................................................... 247
BOUNCE Important Overhead Resistance .............................................................................................................................................. 248
RESEARCH OF NOTE .................................................................................................................................................................................... 249
NEW-BOUNCE Six Reasons Why Goldman Is Suddenly Warning About A "Large Drop" In The Market.............................................. 249
BOUNCE Inside The Biggest Short Squeeze Ever, A Surprise Emerges ............................................................................................... 252
BOUNCE JPM: The Short Squeeze Is Largely Over ............................................................................................................................... 254
BOUNCE Warning: We're In a Bear-Market Rally .................................................................................................................................... 259
BOUNCE Key Equity Index (VLG) Climbs Back Up the Elevator Shaft ................................................................................................... 262
BOUNCE Is This Whole Rally Just One Big TRAP? ................................................................................................................................ 264
BOUNCE Famed Short Seller Muddy Waters Says It's Just A "Dead Cat Bounce" ................................................................................ 265
BOUNCE The "Smart Money" Is Quietly Getting Out Of Dodge: Sells for A Sixth Straight Week .......................................................... 266
BOUNCE JPM's Head Quant Explains Who Unleashed The S&P Rally, And What May Happen Next ................................................. 267
BUYBACKS Cash Flow Now A Looming Problem ............................................................................................................................................. 270
STUDY: BUYBACKS ............................................................................................................................................................................................. 270
CHARTS OF NOTE ......................................................................................................................................................................................... 270
NEW-BUYBACKS Y-o-Y Change in Corporate Net Debt versus Cash Flow (%) .................................................................................... 270
BUYBACKS Buybacks Tend to be Absent During Earnings Season Window ........................................................................................ 271
BUYBACKS Shrinking Monetary Base Will Put Pressures on Buybacks ................................................................................................ 271
BUYBACKS Buybacks to Net Income ...................................................................................................................................................... 271
BUYBACKS Top 10 Buyback Queens versus Stock Performance .......................................................................................................... 273
BUYBACKS Underwhelming Performance of Buyback Queens.............................................................................................................. 273
BUYBACKS Seasonal Slowdown in Buybacks ........................................................................................................................................ 274
BUYBACKS Buyback Activity at Two-Year High ...................................................................................................................................... 274
BUYBACKS Cost of Buybacks In Increasing ........................................................................................................................................... 274
BUYBACKS BoAML Corporate Clients Buybacks in the First 9 Weeks of Each Year ......................................................................... 275
BUYBACKS BoAML Corporate Clients 4 Wk Average Buybacks Y-o-Y % Change ............................................................................... 275
MAY 2016 Edition


BUYBACKS Buybacks Have Accounted for Around 1/3 of EPS Growth Since Q3 2011 ........................................................................ 276
BUYBACKS Net Cash Companies Are Increasingly Scarce .................................................................................................................. 277
BUYBACKS EBITDA Growth Is the Worst Since 2000 ............................................................................................................................ 277
BUYBACKS Buybacks v SPX Total Return Indices ................................................................................................................................. 278
BUYBACKS Proof that Buybacks Mainly Funded By Debt ...................................................................................................................... 278
BUYBACKS US Companies Continuing to Borrow To Buyback Stock .................................................................................................... 279
BUYBACKS Debt/EBITDA v FCF-Cost of Debt - 2013 ............................................................................................................................ 279
BUYBACKS Debt/EBITDA v FCF-Cost of Debt 2015 ........................................................................................................................... 280
BUYBACKS Buybacks & Dividends as a Percentage of Net Income ...................................................................................................... 281
BUYBACKS After Historic Buybacks the Y-o-Y Change in 12 Month Profits Per Share Still Shrinks! .................................................... 281
BUYBACKS Buybacks & Dividends as a Percentage of Net Income Against Spending on Buybacks................................................... 282
BUYBACKS Outperformance of Stocks with Large Buybacks Programs vs S&P 500 ............................................................................ 282
BUYBACKS Gross Leverage for Typical IG/HY Non-Financial Debt-EBITDA ..................................................................................... 282
BUYBACKS Equity Market Performance v S&P 500 Uses of Cash ........................................................................................................ 284
BUYBACKS Default Rate v Net Equity Buybacks .................................................................................................................................... 284
BUYBACKS S&P 500 Buyback Index 200 DMA ................................................................................................................................... 285
BUYBACKS S&P 500 v Buyback Index Performance.............................................................................................................................. 285
BUYBACKS S&P 500 Annualized Share Buybacks, Dividends and Earnings ........................................................................................ 286
BUYBACKS Falling Investment Grade Spreads Hurting Buybacks ......................................................................................................... 286
BUYBACKS Quarterly Share Repurchases & No. of Companies Repurchasing Shares Slows ............................................................. 286
BUYBACKS Dollar-Value Buybacks to Free Cash Flow Trailing Twelve Month Basis ........................................................................ 287
BUYBACKS Nearly 25% of Annual Buybacks Occur in November & December .................................................................................... 288
RESEARCH OF NOTE .................................................................................................................................................................................... 289
NEW-BUYBACKS Debt Is Growing Faster Than Cash Flow By The Most On Record ........................................................................... 289
BUYBACKS Month-End Market Weakness Looms As Monetary Base Trumps Buybacks ..................................................................... 290
BUYBACKS Share Buybacks Turn Toxic ................................................................................................................................................. 294
BUYBACKS Buybacks Soar ..................................................................................................................................................................... 298
BUYBACKS Buybacks Must Continue: AAPL, IBM Unveil Major Debt Issuance to Fund Shareholder-Friendliness .............................. 299
BUYBACKS This Is the Biggest EBITDA Drop Outside Of A Recession Since 2000 .............................................................................. 300
BUYBACKS Stock Buybacks In Jeopardy: Investment Grade Bond Funds See Biggest Outflow In 17 Weeks ...................................... 302
BUYBACKS MacroStrategy Explains Why Most Stocks Have Already "Crossed The Rubicon" ............................................................ 305
BUYBACKS The Cannibalized Corporation- Corporate America is undermining itself. ........................................................................... 310
BUYBACKS The Fly In The Buyback Ointment- Corporate Leverage Is At Record Levels .................................................................... 317
BUYBACKS Why Stocks Are Sliding: For The First Time Since 2009 Spending On Buybacks Surpasses Free Cash Flow ................ 322
BUYBACKS When Buybacks Fail... ......................................................................................................................................................... 326
BUYBACKS "Risky Business": Companies Are Now Funding Share Buybacks By Selling Bonds To Other Companies ...................... 327
SUPPORT & RESISTANCE .................................................................................................................................................................................. 331
Gann Analysis .................................................................................................................................................................................................. 331
Boundary Conditions ....................................................................................................................................................................................... 332
Channels & Regressions ................................................................................................................................................................................. 333
Fibonacci - Controlling Time Extensions ......................................................................................................................................................... 336
Fibonacci - Controlling Price Extensions ......................................................................................................................................................... 341
Elliott Wave ...................................................................................................................................................................................................... 341
The Bottom Line............................................................................................................................................................................................... 344
SHORT TERM SENTIMENT ..................................................................................................................................................... 347

BUSINESS CYCLE - CONSUMER & BUSINESS SENTIMENT ........................................................................................................................... 347
SENTIMENT & CONFIDENCE Shifting Trend ................................................................................................................................................... 347
NEW-SENTIMENT - Consumer, Investor & Trader ............................................................................................................................................... 348
NEW-Consumer Confidence - Conference Board .......................................................................................................................................... 348
NEW-Consumer Sentiment - Michigan ........................................................................................................................................................... 351
NEW-Consumer Comfort - Bloomberg ............................................................................................................................................................ 353
NEW-American Association of Independent Investors ................................................................................................................................... 355
NEW-Investors Intelligence ............................................................................................................................................................................. 355
NEW-National Association of Active Investment Managers (NAAIM) ............................................................................................................ 356
NEW-Small Business Optimism ...................................................................................................................................................................... 357
NEW-Percentage Stocks above 50 & 200 DMA ............................................................................................................................................. 359
NEW-Margin Levels ......................................................................................................................................................................................... 360
Real Margin Debt as % of GDP ....................................................................................................................................................................... 365
Margin Debt versus S&P 500 .......................................................................................................................................................................... 365
Mutual Fund Cash Levels v S&P 500 .............................................................................................................................................................. 366
NEW-OSCILLATORS & BREADTH: Indicators of Importance ............................................................................................................................ 368
NEW-NYSE Overbought / Oversold ................................................................................................................................................................ 368
NEW-OEX Open Interest (Puts/Calls) ............................................................................................................................................................. 369
NEW-TRIN ....................................................................................................................................................................................................... 370
NEW-McClellan Oscillator ............................................................................................................................................................................... 371
CHARTS OF NOTE ............................................................................................................................................................................................... 372
CHARTS Small Business Sentiment Trending Down Strongly .................................................................................................................... 372
CHARTS Small Business Sentiment Margin Squeeze ............................................................................................................................. 372
CHARTS Bloomberg Consumer Comfort versus Nasdaq ........................................................................................................................... 373
CHARTS Goldmans Short Term Sentiment Indicator Shows Low Suggests Near Term Counter Rally Likely ...................................... 374
CHARTS Global Consumer Confidence Begins Reversal from Trend Resistance ..................................................................................... 375
CHARTS US Economic Index Steadily Eroding ........................................................................................................................................... 376
CHARTS UMich Consumer Confidence with Biggest Miss on Record ........................................................................................................ 376
CHARTS Economic Surprise Index lower highs, lower lows and a reluctant bounce .............................................................................. 376
MAY 2016 Edition


CHARTS Cumulative Flows by Client Type - YTD ....................................................................................................................................... 378

CHARTS Historical Risk versus Returns ...................................................................................................................................................... 378
CHARTS Cumulative Flows by Client Type January 2008-Present ......................................................................................................... 379
CHARTS Q Ratio Since 1900 ....................................................................................................................................................................... 379
CHARTS Nominal & Real Household Spending Expectations .................................................................................................................... 380
CHARTS Household Spending Expectations by Income Bucket ................................................................................................................ 380
CHARTS A Very Neutral (Highly Unusual) Bull Market ............................................................................................................................... 381
CHARTS Historical Swings in Sentiment ..................................................................................................................................................... 381
CHARTS Investors Intelligence Bulls & Bears ............................................................................................................................................. 382
CHARTS A/D Line Diverging from Price, Suggesting Weakening Momentum ........................................................................................... 383
CHARTS Smart Money OEX Open Interest Put/Call Ratio Now Off the Charts! .................................................................................... 383
CHARTS UMich Consumer Sentiment Tumbles Most In 16 Months ........................................................................................................... 384
CHARTS Consumer Comfort Plunges Most In 10 Months .......................................................................................................................... 385
CHARTS Only 16% Think Future Employment Opportunities Will Be Better .............................................................................................. 386
CHARTS Inequality Eventually Leads to Economic Adjustments Often Precipitously ............................................................................. 386
CHARTS - NFIB Small Business Sentiment ................................................................................................................................................... 387
CHARTS - Orange Book .................................................................................................................................................................................. 387
CHARTS Asset Allocation Global Equities ................................................................................................................................................ 388
CHARTS Asset Allocation Global Bonds .................................................................................................................................................. 388
CHARTS Active versus Passive Funds Allocation ....................................................................................................................................... 389
CHARTS Investors Intelligence Survey of % Bears ..................................................................................................................................... 389
CHARTS Sentiment at Post 2008 Crisis Highs ............................................................................................................................................ 390
CHARTS CNBC Viewership Steadily Falling ............................................................................................................................................... 391
CHARTS Investor Allocation Trends for Stocks, Bonds and Cash .............................................................................................................. 392
CHARTS Uptick in Feds Financial Stress Index Composite ....................................................................................................................... 393
CHARTS Fear Barometer Diverges with VIX, CDS IG Index ...................................................................................................................... 394
CHARTS Extreme Complacency Seen Near End of Cycles ........................................................................................................................ 394
CHARTS Complacency Seen In PE/VIX ....................................................................................................................................................... 395
CHARTS Post Crisis Sentiment Profile Shows a Clear Ending Pattern ...................................................................................................... 395
CHARTS Smart Money Flows ...................................................................................................................................................................... 396
CHARTS Fed Assets versus Bullish Sentiment ........................................................................................................................................... 396
CHARTS Macro Support Has Technically Broken Down ............................................................................................................................. 397
CHARTS US Surprise Index Setting Up for Downturn ................................................................................................................................. 397
CHARTS The Public No Longer Trusts the Market Feel it is Manipulated and Ineffectively Regulated ............................................... 398
RESEARCH OF NOTE .......................................................................................................................................................................................... 399
NEW-SENTIMENT: NFIB Slams Fed, Obama As Small Business Optimism Crashes To 2 Year Lows ....................................................... 399
INTERMEDIATE TERM RISK ANALYSIS ................................................................................................................................. 401

UPDATED-AGGREGATED GLOBAL FINANCIAL RISK INDEX .......................................................................................................................... 401
NEW-BANKING RISK - LIBOR-OIS SPREAD ................................................................................................................................................ 402
NEW-BANKING RISK - TED SPREAD ........................................................................................................................................................... 402
NEW-CREDIT RISK - GLOBAL CREDIT DEFAULT SWAPS ....................................................................................................................... 403
NEW-CREDIT RISK - EU CREDIT DEFAULT SWAPS .................................................................................................................................. 403
NEW-CONSUMER RISK - HOUSING - RATE OF CHANGE ......................................................................................................................... 404
NEW-ECONOMIC RISK - ECRI LEADING INDEX ......................................................................................................................................... 404
NEW-INFLATION RISK - MONEY SUPPLY GROWTH - M3 ......................................................................................................................... 406
NEW-INFLATION RISK - MONEY VELOCITY ............................................................................................................................................... 406
MONETARY RISK - BANK LIABILITIES ......................................................................................................................................................... 407
NEW-COST OF MONEY RISK - INTEREST RATES .................................................................................................................................... 408
AGGREGATED RISK LEVEL ................................................................................................................................................................................ 409
STUDY OF IMPORTANCE .................................................................................................................................................................................... 411
NEW-STUDY - The Killer Wave Confirms a Big Bear Market Lies Ahead ................................................................................................. 411
CHARTS OF NOTE ............................................................................................................................................................................................... 417
NEW-RISK Nasdaq risk is dramatically higher than S&P risk .................................................................................................................. 417
NEW-RISK Draghis ECB Announcement Triggers Bull Reversal To Evercore ...................................................................................... 418
NEW-RISK High Probability US Recession in 2016 ................................................................................................................................. 419
NEW-RISK Price-to-Sales Presently Second Highest to the Dotcom Bubble Collapse .......................................................................... 419
NEW-RISK Industrial Production Is Rolling Over ..................................................................................................................................... 420
NEW-RISK NYSE Margin Debt at Record Levels .................................................................................................................................... 421
NEW-RISK Margin Debt to GDP Higher then 2000 and 2007 ................................................................................................................. 422
NEW-RISK Margin Debt to GDP and 3-Year Stock Returns ................................................................................................................... 423
NEW-RISK Margin Debt to GDP and 3-Year Stock Returns ................................................................................................................... 424
NEW-RISK Investors Sell Dividend Funds, MLPs, REITs and High Yield ............................................................................................... 425
NEW-RISK Bull to Bear Ratio Unprecedented Optimism ..................................................................................................................... 426
NEW-RISK Turmoil in High Yield Bonds .................................................................................................................................................. 427
NEW-RISK New Global Risk US Growth European Financial Conditions .......................................................................................... 428
NEW-RISK Leveraged Loans and HY Corporate Bond Yields Warn of Possible SPX of 1100 .............................................................. 428
NEW-RISK Global Financial Risk ............................................................................................................................................................. 429
NEW-RISK US Financials Stocks versus Credit ................................................................................................................................... 429
NEW-RISK Something Is Seriously Wrong Somewhere in Deutsche Bank 5Y Sub CDS ................................................................... 430
NEW-RISK Something Is Seriously Wrong Somewhere in Deutsche Bank Lehman Comparison ...................................................... 430
NEW-RISK Something Is Seriously Wrong Somewhere in Deutsche Bank Ending Diagonal Goes Lower ......................................... 431
NEW-RISK Small Cap Stocks versus HY Bond Spread .......................................................................................................................... 431
NEW-RISK Net Cash Companies Scarce EBITDA Cash Flow .......................................................................................................... 432
NEW-RISK Falling Animal Spirits - Sinking CEO Confidence .................................................................................................................. 432
MAY 2016 Edition


NEW-RISK Bull-Bear Ratio Collapses ...................................................................................................................................................... 433

NEW-RISK SPX Percent off 2009 High .................................................................................................................................................... 434
NEW-RISK SPX Price-Earnings-PE Ratio ............................................................................................................................................... 434
NEW-RISK Stock market more Over-valued than prior to Previous Crashes!......................................................................................... 435
NEW-RISK Coppock Signaling Problems Ahead ..................................................................................................................................... 435
NEW-RISK Junk Bond Movements Have Been Dependable Warning Indicators Since Dotcom Bubble Burst ..................................... 436
NEW-RISK Corporate Profits and Wages Diverge ................................................................................................................................... 436
NEW-RISK Russell 1000 Equal Weight: Cap-Weight Ratio .................................................................................................................. 437
NEW-RISK Long Term Monthly Reversal Signal ..................................................................................................................................... 437
NEW-RISK Markets Historically Fail after Three months of Falling Margin Debt We Have 2 Months ................................................. 438
NEW-RISK Margin Debt Channel is Pretty Clear High Odds of Troubles Ahead ................................................................................. 438
NEW-RISK Goldman Joins the Chorus Warning on Bond Market Liquidity ............................................................................................ 439
NEW-RISK So Goes Retail So Goes the US Economy ........................................................................................................................ 439
NEW-RISK Consumer Discretionary Sending Signals ............................................................................................................................. 440
NEW-RISK Net EBITDA 2x Highest since 2006 % of companies with net cash Lowest since 2006 ...................................................... 442
NEW-RISK US Corporate Net Debt Has Exploded & Now Massively Exceeds EBITDA ........................................................................ 442
NEW-RISK CBOE Skew Index ................................................................................................................................................................. 443
NEW-RISK Gap Between Uncertainties Priced in the Debt & Equity Markets ........................................................................................ 443
NEW-RISK Beware of EPS manipulation ................................................................................................................................................. 444
NEW-RISK Total NYSE Short Interest & Monthly Change ...................................................................................................................... 445
NEW-RISK Contrasting Post October Market Drawdowns 1973s Slow Pain versus 1987 Crash ..................................................... 445
NEW-RISK Historical Post-Crash Price Actions 1950 to 2015 ............................................................................................................. 446
NEW-RISK Historical Post-Crash Price Pattern Has Taken an Average of 27 days to Double Bottom .................................................. 446
NEW-RISK Credit Fleeing IG,HY & EM .................................................................................................................................................... 447
NEW-RISK Credit Fleeing IG,HY & EM .................................................................................................................................................... 447
NEW-RISK Margin Debt in NYSE Accounts versus S&P 500 ................................................................................................................. 448
NEW-RISK Credit Risk Increasing ............................................................................................................................................................ 449
NEW-RISK TED Spread Increasing ......................................................................................................................................................... 449
NEW-RISK VIX Pricing in Credit Problems .............................................................................................................................................. 450
NEW-RISK Credit Always Leads Markets Its the Life Blood!............................................................................................................. 450
NEW-RISK The Pattern is Clear QE the Market Driver......................................................................................................................... 451
NEW-RISK Internal deterioration in the market is more consistent with the development of more major bull market peaks .............. 452
NEW-RISK A huge gap has opened up between reality and perceptions ............................................................................................... 453
NEW-RISK Economic Surprise Index lower highs, lower lows and a reluctant bounce ....................................................................... 454
NEW-RISK Weekly Equity Outflows ......................................................................................................................................................... 454
NEW-RISK Weekly EM Fund Outflows .................................................................................................................................................... 455
NEW-RISK Net Outflows as a % of AUM by Year ................................................................................................................................... 456
NEW-RISK HG Spread Per Point of Equity Volume ................................................................................................................................ 457
NEW-RISK Widening Gap between Debt & Equity .................................................................................................................................. 457
NEW-RISK HY Bond ETF (HYG) versus S&P 500 .................................................................................................................................. 458
NEW-RISK HY Credit versus 2007-2008 Credit Always Leads Equity .............................................................................................. 458
NEW-RISK Leutholds High/Low Logic Index Sending a Clear Signal .................................................................................................... 459
RISK: Only a Few Key Stocks Holding Up the Market .................................................................................................................................... 460
RISK: Economic Output Composite Failing .................................................................................................................................................... 461
RISK: 5 Year Cyclically Adjusted P/E Ratio versus S&P Price ....................................................................................................................... 462
RISK: Margin Debt Shrinking .......................................................................................................................................................................... 462
RISK: Leutholds High/Lpw Logic Index Warns .............................................................................................................................................. 463
RISK: Megaphone Top with Confirming Oscillator .......................................................................................................................................... 463
RISK: We Have Confirmed and Unusual Hindenburg Omens ........................................................................................................................ 464
RISK: It's been a while since we corrected! .................................................................................................................................................... 465
RISK: "Seven Signs" Flash Red ...................................................................................................................................................................... 467
RISK: When these Two Charts Appear Simultaneously, Bad Things Normally Follow!................................................................................. 468
RISK: Well That's Never Happened Before - Exhibit 1 US Macro versus S&P 500 .................................................................................... 468
RISK: Well That's Never Happened Before - Exhibit 2 Long- and Short-end of the Treasury yield curve so anti-correlated. ................... 469
RISK: Well That's Never Happened Before - Exhibit 3 Fed-Fueled, Mal-Investment Boom ....................................................................... 470
RISK: Well That's Never Happened Before - Exhibit 4 Market breadth diverge from performance for such an extended period.............. 471
RISK: Well That's Never Happened Before - Exhibit 5 More trades per second in stocks ......................................................................... 473
RISK: Well That's Never Happened Before - Exhibit 6 The "Smart Money" Has Never Been More Bearish .............................................. 474
RISK: Well That's Never Happened Before - Exhibit 7 Big decoupling in recent weeks between US equity flows and prices ................... 474
RISK: Well That's Never Happened Before - Exhibit 8 Cumulative 3 Mo net flows out of equities, is now the largest on record ............... 475
RISK: World Stocks versus World 2015 GDP Estimate.................................................................................................................................. 477
RISK: World Stocks versus World 2014 & 2015 GDP Estimates ................................................................................................................... 477
RISK: World Stocks versus 10Y UST Yield, WTI Crude 2015 GDP Estimates .............................................................................................. 478
RISK: Fat Tails Have Disproportionately Large Impact on Returns................................................................................................................ 479
RISK: Statistically We Are Due for a Drawdown ............................................................................................................................................. 480
RISK: The Buffett Indicator .............................................................................................................................................................................. 481
RISK: Speculation Has Taken Control of the Markets .................................................................................................................................... 482
RISK: MSCI versus World GDP Divergence - Unsustainable ........................................................................................................................ 482
RISK: High Yield Credit Risk At Elevated Levels ............................................................................................................................................ 482
RISK: Active Hindenburg Omen ...................................................................................................................................................................... 483
RISK: An Over-Levered Hedge Fund Index Ending ABC Consolidation Pattern ........................................................................................... 483
RESEARCH OF NOTE .......................................................................................................................................................................................... 485
RISK: Expert That Correctly Predicted Market Moves In July, August And September Says Stocks Will Crash In November .................... 485
RISK: 4 Warnings And Why You Should Pay Attention .................................................................................................................................. 487
RISK: According To Bank of America, This Is "The Biggest Risk to Global Equities" .................................................................................... 492
RISK: The "Smartest Money" Liquidating At a Record Pace: "Selling Everything ........................................................................................ 494
MAY 2016 Edition


RISK: Top CEO Warns Of Global Reset: "It's In The Cards For Sure... It Could Happen This Year" ........................................................... 497
RISK: $140 Billion Bond Fund Goes To Cash As It "Braces For Bond-Market Collapse" ............................................................................. 498
RISK: "It's Time To Hold Physical Cash", Fidelity Manager Warns Ahead Of "Systemic Event" ................................................................... 501
RISK: Sweden's Largest Fund Manager Is Quietly Dumping Stocks Before The "Herd" Is Caught In A Selling Vortex ............................... 503
RISK: 12 Signs That An Imminent Global Financial Crash Has Become Even More Likely .......................................................................... 504
RISK: World's Largest Sovereign Wealth Fund Is About To Become A Seller .............................................................................................. 505
RISK: When Hindenburg Omens Are Ominous .............................................................................................................................................. 509
RISK: The Canaries Continue To Drop like Flies ............................................................................................................................................ 511
RISK: Deutsche Suggests 'Caution' As "Seven Signs" Flash Red ................................................................................................................. 513
RISK: "The Top's In" David Stockman Warns Of "Epochal Deflation" ............................................................................................................ 514
RISK: When Hindenburg Omens Are Ominous .............................................................................................................................................. 515
RISK: Two Point Three Sigmas Above the Norm ........................................................................................................................................... 517
RISK: No Really, Who is Buying? ................................................................................................................................................................... 525
RISK: Curious Sightings .................................................................................................................................................................................. 526
RISK: Even the BIS Is Shocked At How Broken Markets Have Become ....................................................................................................... 533
RISK: The Line between Rational Speculation and Market Collapse ............................................................................................................. 537
RISK: Global Economy Will Shrink By $2.3 Trillion In 2015 ........................................................................................................................... 542
RISK: Market Action Suggests Abrupt Slowing in Global Economic Activity.................................................................................................. 542
RISK: Warnings Signs Are Everywhere .......................................................................................................................................................... 546
RISK: Hindenburg Signals a Warning ............................................................................................................................................................. 547
RISK: Americans say they're too broke to invest ............................................................................................................................................ 549
RISK: The Biology of Risk ............................................................................................................................................................................... 553
RISK: More Signs Of Bullish Excess ............................................................................................................................................................... 557
RISK: Markets Have Left the "Complacency" Phase, Have Entered Full Blown "Mania" .............................................................................. 559
RISK: VIX Sends Message of Complacency ................................................................................................................................................... 560
RISK: CS Warns Volume & DeMark Raise "Topping Threat" In Stocks ......................................................................................................... 561
RISK: No One Will Ring the Bell at the Top .................................................................................................................................................... 565
Cassandra's - New Additions to the List ................................................................................................................................................................ 572
CASSANDRA: "Severe Correction Or Cyclical Bear" Ahead: Leuthold Major Trend Index Turns Negative ................................................. 573
CASSANDRA: CANARIES - Warnings Everywhere! ...................................................................................................................................... 574
CASSANDRA: Stephen Schork: The Commodity Crash Is "A Canary In The Coal Mine For The Global Economy" ................................... 576
CASSANDRA: Emerging Market Mayhem: Gross Warns Of "Debacle" As Currencies, Bonds Collapse ..................................................... 578
CASSANDRA: "Another Crisis Is Coming": Jamie Dimon Warns Of the Next Market Crash ........................................................................ 585
CASSANDRA: Steen Jakobsen: Get Ready For The Biggest Margin Call In History .................................................................................... 586
CASSANDRA: Wynn Calls "Big" Recovery "Complete Dream" As Gaming Revenues Collapse .................................................................. 588
CASSANDRA: Stan Druckenmiller's "Horrific Sense" Of Deja Vu: "This Will End Very Badly" ..................................................................... 590
CASSANDRA: Hedge Fund Legend Julian Robertson Warns Of A "Complete Explosion" Unless Fed Contains "Boiling, Bubble" ............ 595
CASSANDRA: Kyle Bass Warns "The Fed Is Backed Into A Corner... Equities Are My Biggest Liquidity Worry" ........................................ 596
CASSANDRA: Paul Tudor Jones Warns "Disastrous Market Mania" Will End In "Revolution, Taxes, or War" ............................................ 597
CASSANDRA: John Hussman - A Who's Who Of Awful Times To Invest ..................................................................................................... 599
CASSANDRA: Carl Icahn - One Day You'll See A Break Like A Few Weeks Ago But The Market Won't Come Back ................................ 602
CASSANDRA: Sam Zell Warns Of Stock Market Correction On CNBC ........................................................................................................ 603
CASSANDRA: Billionaire Carl Icahn warns on US stock prices ..................................................................................................................... 603
CASSANDRA: Soros Bets $2 Billion on Stock Market Collapse .................................................................................................................... 604
CASSANDRA: Dont Ignore Janet Yellens Stock Market Warnings 07-21-14 Fiscal Times ......................................................................... 605
CASSANDRA: Doug Kass: We're Heading for a Bear Market So Plan Accordingly ...................................................................................... 608
CASSANDRA: Comstock Funds Weighs In .................................................................................................................................................... 610
CASSANDRA: Michael Lombardi Weighs In ................................................................................................................................................... 612
CASSANDRA: Ron Paul Portfolio, 'Craziest' we've ever seen? ..................................................................................................................... 614
CASSANDRA: John Mauldin Goes Negative .................................................................................................................................................. 615
CASSANDRA: Hayman Capital Dramatically Reduces Risk .......................................................................................................................... 623
CASSANDRA: Byron Wien Warns "Oblivious Markets" Of 20% Correction ................................................................................................... 624
CASSANDRA: Harry Dent Warns Stocks to Sink More than 60% by End of 2014 ........................................................................................ 624
CASSANDRA: Stanley Druckenmiller: "When You Get This Kind Of Rigging, It Will End Badly".................................................................. 625
CASSANDRA: Mohamed El-Erian: "Prices Are Artificially High - Its Time to Take Profits" .......................................................................... 626
CASSANDRA: Felix Zulauf: World Headed Toward 1987 Style Market Collapse .......................................................................................... 627
CASSANDRA: Doug Kass: 'I'm Getting The Summer Of 1987 Feeling' In The Market Right Now ............................................................... 627
CORRELATION & COMPLACENCY A PROBLEM .............................................................................................................................................. 629
EVENT RISK A PROBLEM .................................................................................................................................................................................... 632
Q2 EARNINGS & THE R WORD .............................................................................................................................................................. 632
POLITICAL-ECONOMIC TENSIONS .......................................................................................................................................................... 632
CENTRAL BANK POLICY MISCUES.......................................................................................................................................................... 632
ASIAN ECONOMIC SLOWDOWN SPILLAGE ............................................................................................................................................ 632
PETRO$ CRISIS BREWING IN BRIICS...................................................................................................................................................... 632
LONGER TERM - FUNDAMENTAL ANALYSIS .............................................................................................................................. 633

HIGHLIGHTS ......................................................................................................................................................................................................... 633
ASSET & LIABILITY OWNERSHIP ................................................................................................................................................................. 633
PANIC TOTAL RETURN DISTRIBUTION SINCE 1974 ................................................................................................................................. 633
PANIC CHASE FOR YIELD ............................................................................................................................................................................ 634
REAL S&P MARKET CAP / REAL GDP ......................................................................................................................................................... 634
UNSUSTAINABLE GAP BETWEEN PROFITS AND INCOME ...................................................................................................................... 635
ADJUSTED CORPORATE PROFITS FROM DOMESTIC OPERATIONS .................................................................................................... 635
TRAILING 10Y 12 MONTH NET MARGINS ................................................................................................................................................... 636
INVESTMENT CLASS PERFORMANCE ....................................................................................................................................................... 637
MAY 2016 Edition


NEW-VALUATION SUMMARY ....................................................................................................................................................................... 638

VALUATION: Alternative Methodologies ............................................................................................................................................................... 643
NEW-FOUR SET CONSOLIDATED MARKET VALUATION INDICATORS .................................................................................................. 643
NEW-Crestmont from the Arithmetic ............................................................................................................................................................... 647
NEW-Cyclical PE 10 Ratio............................................................................................................................................................................... 652
NEW-Q Ratio ................................................................................................................................................................................................... 659
NEW-S&P Composite Regression-to-the-Trend ............................................................................................................................................. 664
NEW-Reference Methodologies Analysis ....................................................................................................................................................... 666
CHARTS OF NOTE ......................................................................................................................................................................................... 673
NEW- VALUATIONS Price-to-Sales Presently Second Highest to the Dotcom Bubble Collapse .......................................................... 673
NEW- VALUATIONS Cumulative Flows ................................................................................................................................................... 673
NEW- VALUATIONS GAAP versus Non-GAAP Net Margins .................................................................................................................. 674
VALUATIONS Forward 12-Month P/E Ratio 10 Years.......................................................................................................................... 674
VALUATIONS Forward 12-Month EPS versus Change in Price 10 Years ........................................................................................... 675
VALUATIONS Net Margin Growth ............................................................................................................................................................ 676
VALUATIONS 10 Year Trailing 12 Mo Net Margin Growth Historically High ........................................................................................ 676
VALUATIONS Record Profits Yet Historically Low Capital Asset Growth ............................................................................................... 677
VALUATIONS Historical Ranking of PE Values ....................................................................................................................................... 678
VALUATIONS Median Price/Cash Flow Multiple for US Stocks .............................................................................................................. 679
VALUATIONS Median Price/Earnings Multiple for US Stocks ................................................................................................................. 680
VALUATIONS Median Price to Book Multiple for US Stocks ................................................................................................................... 681
VALUATIONS Price/Book; Price/Cash flow; Price/Sales ......................................................................................................................... 682
VALUATIONS Global Equities Reported PE, PE before XO & Fwd PE ............................................................................................... 683
NEW-2016 EARNINGS Earnings Projections .................................................................................................................................................... 684
STUDY: 2016 EARNINGS - ................................................................................................................................................................................... 684
CHARTS OF NOTE ......................................................................................................................................................................................... 684
2016 EARNINGS Historical Global Consensus Earnings Estimates ....................................................................................................... 684
2016 EARNINGS 12 Month Forward EPS Consensus ............................................................................................................................ 684
2016 EARNINGS SPX Earnings CY 2016 ............................................................................................................................................ 685
2016 EARNINGS A 2016 Hockey Stick Forecast Only the Nave Would Believe ................................................................................. 685
2016 EARNINGS US Forward PE versus Fed Funds Rate ..................................................................................................................... 686
2016 EARNINGS US Operating Profit Margin versus US Monetary Indicators ....................................................................................... 686
RESEARCH OF NOTE .................................................................................................................................................................................... 687
2016 EARNINGS 2016 EPS Growth Estimates Slashed By 50% Just One Month Into The Year ......................................................... 687
2016 EARNINGS Another Data Point To Ignore: Dividend Cuts Have Surpassed 2008 ........................................................................ 689
2016 EARNINGS Profit, Multiple & Margin Trouble Are In Store For Global Equities In 2016 ................................................................ 691
NEW-YE EARNINGS 2015 Forecasts ................................................................................................................................................................ 693
CHARTS OF NOTE ......................................................................................................................................................................................... 693
2015 EARNINGS 2015 & 2016 Annual Earnings EPS Estimate v Historical........................................................................................... 693
2015 EARNINGS Q3 Earnings Estimate Revisions v Change in Price ................................................................................................... 694
2015 EARNINGS Consumer Staples & Discretionary are sending a Pretty Clear ( Worsening Since Q1) Message ............................ 695
2015 EARNINGS Consensus Long-Term Growth versus Forward PE ................................................................................................... 696
2015 EARNINGS Consensus Analysts Estimates 1979-1995 ............................................................................................................. 697
2015 EARNINGS Consensus Analysts Estimates 1995-2014 ............................................................................................................. 697
2015 EARNINGS CY 2015 Earnings Growth ........................................................................................................................................... 698
2015 EARNINGS CY 2015 Revenue Growth ........................................................................................................................................... 698
2015 EARNINGS Q2 Forward 12 Mo EPS versus Change in Price ..................................................................................................... 699
2015 EARNINGS Q1 Forward 12 PE Ratio ........................................................................................................................................... 700
RESEARCH OF NOTE .................................................................................................................................................................................... 701
2015 EARNINGS Q1 Earnings Guidance: Negative Guidance (84%) Above Average ........................................................................... 701
NEW-2015 Q4 EARNINGS Earnings Recession ............................................................................................................................................... 702
STUDY: Q4 EARNINGS - ...................................................................................................................................................................................... 702
CHARTS OF NOTE ......................................................................................................................................................................................... 702
Q4 EARNINGS SPX Earnings 2007-2009 versus 2014-Today ............................................................................................................ 702
Q4 EARNINGS Dividend Cuts Accelerate ................................................................................................................................................ 702
Q4 EARNINGS EBITDA Growth Is the Worst Since 2000 ....................................................................................................................... 703
Q4 EARNINGS All Country World Earnings and BCAs EPS Model ....................................................................................................... 703
RESEARCH OF NOTE .................................................................................................................................................................................... 704
Q4 EARNINGS Avondales CEO Feedback Company Notes Digest 02.12.15 .................................................................................... 704
Q4 EARNINGS Here's How Much The Strong Dollar Hurts US Companies ........................................................................................... 721
Q4 EARNINGS Q4 Will Be The Worst U.S. Earnings Season Since The Third Quarter Of 2009........................................................... 725
Q3 2015 EARNINGS Earnings Recession ......................................................................................................................................................... 728
STUDY: Q3 EARNINGS - ...................................................................................................................................................................................... 728
CHARTS OF NOTE ......................................................................................................................................................................................... 728
Q3 EARNINGS Y-o-Y Change in 12 Month Profits Per Share ................................................................................................................. 728
Q3 EARNINGS Goldman Now Forecasts Flat Margin Growth in 2016 ................................................................................................... 728
Q3 EARNINGS US Corporate Profit Growth Turns Negative .................................................................................................................. 729
Q3 EARNINGS Technology Sales Growth (ex AAPL & GOOG) ............................................................................................................. 729
Q3 EARNINGS Percentage of US Companies Losing Money ................................................................................................................. 730
Q3 EARNINGS The stock market more Over-valued than prior to Previous Crashes! ........................................................................... 730
Q3 EARNINGS Biggest Drop in Profits Since 2009 ................................................................................................................................. 731
Q3 EARNINGS Negative Sales Surprise Ran Significantly Higher than Average ................................................................................... 731
10
MAY 2016 Edition


Q3 EARNINGS Y-o-Y Change in Quarterly Earnings and Revenue for S&P 500 ................................................................................... 732
Q3 EARNINGS Forward Earnings being Brought Down Rapidly............................................................................................................. 732
Q3 EARNINGS # S&P 500 Companies Citing Negative Q3 Impacts - Reasons ..................................................................................... 733
Q3 EARNINGS Q4 15 Estimated Earnings Growth Rate ........................................................................................................................ 733
Q3 EARNINGS Revenue & Earnings Consensus Estimated Growth Rate ............................................................................................ 734
Q3 EARNINGS Q3 EPS Expected to Fall -4.5% According to Factset ................................................................................................... 735
Q3 EARNINGS S&P 500 Average Earnings Growth Y-o-Y Not a Good Pattern .................................................................................. 735
Q3 EARNINGS Revenue Recession and Flat EPS Consensus .............................................................................................................. 736
Q3 EARNINGS Forward EPS Consensus Matches Manufacturing Surveys Declines ........................................................................... 736
Q3 EARNINGS Q3 Earnings Growth (Decline): Ex-BAC ......................................................................................................................... 737
Q3 EARNINGS IT Sector Q3 Earnings Forecast to be Down -5.9% Without Apple (-0.4% With) .......................................................... 737
Q3 EARNINGS A Good Sign that Goldman Must Be Selling? ................................................................................................................. 738
Q3 EARNINGS It Should Be Expected that Earnings Will Begin to fall ................................................................................................... 738
RESEARCH OF NOTE .................................................................................................................................................................................... 739
Q3 EARNINGS The Most Important Earnings Report You Should Know About ..................................................................................... 739
Q3 EARNINGS Q3 Earnings -Where We Stand - 4 Main Themes From Calls ....................................................................................... 741
Q3 EARNINGS Goldman's 4 Word Summary Of Q3 Earnings Season- -Adequate Earnings, Dismal Sales ......................................... 749
Q3 EARNINGS Do You See What Happens, Alcoa, When Your "Restructuring" Non-GAAP Add-backs Tumble ................................. 755
Q3 EARNINGS Q3 Earnings Bloodbath-Terrible Monsanto Results- Company Fires 2,600 - ................................................................ 756
Q3 EARNINGS Wall Street is preparing for the worst earnings season since 2009 ............................................................................. 758
Q3 EARNINGS The Truth About S&P 500 Earnings: No Growth For 7 Quarters, With A Revenue Recession On Top ........................ 762
Q3 EARNINGS Earnings Now Surfacing as a Problem ..................................................................................................................................... 763
CHARTS OF NOTE ......................................................................................................................................................................................... 763
Q3 EARNINGS Biggest Drop in Profits Since 2009 ................................................................................................................................. 763
Q3 EARNINGS Negative Sales Surprise Ran Significantly Higher than Average ................................................................................... 763
Q3 EARNINGS Y-o-Y Change in Quarterly Earnings and Revenue for S&P 500 ................................................................................... 764
Q3 EARNINGS Forward Earnings being Brought Down Rapidly............................................................................................................. 764
Q3 EARNINGS # S&P 500 Companies Citing Negative Q3 Impacts - Reasons ..................................................................................... 765
Q3 EARNINGS Q4 15 Estimated Earnings Growth Rate ........................................................................................................................ 765
Q3 EARNINGS Revenue & Earnings Consensus Estimated Growth Rate ............................................................................................ 766
Q3 EARNINGS Q3 EPS Expected to Fall -4.5% According to Factset ................................................................................................... 767
Q3 EARNINGS S&P 500 Average Earnings Growth Y-o-Y Not a Good Pattern .................................................................................. 767
Q3 EARNINGS Revenue Recession and Flat EPS Consensus .............................................................................................................. 768
Q3 EARNINGS Forward EPS Consensus Matches Manufacturing Surveys Declines ........................................................................... 768
Q3 EARNINGS Q3 Earnings Growth (Decline): Ex-BAC ......................................................................................................................... 769
Q3 EARNINGS IT Sector Q3 Earnings Forecast to be Down -5.9% Without Apple (-0.4% With) .......................................................... 770
Q3 EARNINGS A Good Sign that Goldman Must Be Selling? ................................................................................................................. 770
Q3 EARNINGS It Should Be Expected that Earnings Will Begin to fall ................................................................................................... 770
RESEARCH OF NOTE .................................................................................................................................................................................... 771
Q3 EARNINGS The Most Important Earnings Report You Should Know About ..................................................................................... 771
Q3 EARNINGS Q3 Earnings -Where We Stand - 4 Main Themes From Calls ....................................................................................... 773
Q3 EARNINGS Goldman's 4 Word Summary Of Q3 Earnings Season- -Adequate Earnings, Dismal Sales ......................................... 781
Q3 EARNINGS Do You See What Happens, Alcoa, When Your "Restructuring" Non-GAAP Add-backs Tumble ................................. 786
Q3 EARNINGS Q3 Earnings Bloodbath-Terrible Monsanto Results- Company Fires 2,600 - ................................................................ 787
Q3 EARNINGS Wall Street is preparing for the worst earnings season since 2009 ............................................................................. 789
Q3 EARNINGS The Truth About S&P 500 Earnings: No Growth For 7 Quarters, With A Revenue Recession On Top ........................ 793
Q2 2015 EARNINGS Reported Results ............................................................................................................................................................. 794
CHARTS OF NOTE ......................................................................................................................................................................................... 794
Q2 EARNINGS Q2 Earnings Growth by Sector ....................................................................................................................................... 794
Q2 EARNINGS Q2 Revenue Growth by Sector ....................................................................................................................................... 794
Q2 EARNINGS Q2 Earnings Growth by Sector - Estimates .................................................................................................................... 795
Q2 EARNINGS Q2 Revenue Growth by Sector Estimates ................................................................................................................... 795
RESEARCH OF NOTE .................................................................................................................................................................................... 797
Q2 EARNINGS Q2 Summary ................................................................................................................................................................... 797
Q2 EARNINGS Percentage of Companies Beating Revenue Estimates (52%) is Below 5 Year Average ............................................. 798
Q2 EARNINGS Forward Earnings, Revenue and Margins ...................................................................................................................... 799
Q2 EARNINGS First Decline in Earnings (-1.3%) Since Q3 2012 (-1.06%) ............................................................................................ 800
Q2 EARNINGS First Back-to-Back Declines in Revenue Since Q2 2009 and Q3 2009 ......................................................................... 801
Q1 2015 EARNINGS Reported Results ............................................................................................................................................................. 802
CHARTS OF NOTE ......................................................................................................................................................................................... 802
Q1 EARNINGS Q1 Earnings Growth by Sector ....................................................................................................................................... 802
Q1 EARNINGS Q1 Revenue Growth by Sector ....................................................................................................................................... 802
Q1 EARNINGS Q1 Earnings Growth by Sector - Estimates .................................................................................................................... 803
Q1 EARNINGS Q1 Reveue Growth by Sector - Estimates ...................................................................................................................... 803
RESEARCH OF NOTE .................................................................................................................................................................................... 804
Q1 EARNINGS Q1 Summary ................................................................................................................................................................... 804
Q1 EARNINGS Fewer Companies Beating Estimates and Sales Estimates Than Average .................................................................. 804
Q1 EARNINGS Forward Earnings, Revenue and Margins ...................................................................................................................... 806
Q1 EARNINGS First Decline in Earnings (-0.4%) Since Q3 2012 (-1.06%) ............................................................................................ 807
Q1 EARNINGS First Decline in Revenues (-2.6%) Since Q3 2012 (-11.5%) .......................................................................................... 808
BUYBACKS Widening Credit Spreads Become A Problem ............................................................................................................................... 809
CHARTS OF NOTE ......................................................................................................................................................................................... 809
NEW-BUYBACKS Cost of Buybacks In Increasing .................................................................................................................................. 809
NEW-BUYBACKS BoAML Corporate Clients Buybacks in the First 9 Weeks of Each Year ............................................................... 809
NEW-BUYBACKS BoAML Corporate Clients 4 Wk Average Buybacks Y-o-Y % Change ..................................................................... 810
11
MAY 2016 Edition


NEW-BUYBACKS Buybacks Have Accounted for Around 1/3 of EPS Growth Since Q3 2011 .............................................................. 810
NEW-BUYBACKS Net Cash Companies Are Increasingly Scarce ........................................................................................................ 811
NEW-BUYBACKS EBITDA Growth Is the Worst Since 2000 .................................................................................................................. 811
NEW-BUYBACKS Buybacks v SPX Total Return Indices ....................................................................................................................... 812
NEW-BUYBACKS Proof that Buybacks Mainly Funded By Debt ............................................................................................................ 812
NEW-BUYBACKS US Companies Continuing to Borrow To Buyback Stock .......................................................................................... 813
NEW-BUYBACKS Debt/EBITDA v FCF-Cost of Debt - 2013 .................................................................................................................. 813
NEW-BUYBACKS Debt/EBITDA v FCF-Cost of Debt 2015 ................................................................................................................. 814
NEW-BUYBACKS Buybacks & Dividends as a Percentage of Net Income ............................................................................................ 815
NEW-BUYBACKS After Historic Buybacks the Y-o-Y Change in 12 Month Profits Per Share Still Shrinks! .......................................... 815
NEW-BUYBACKS Buybacks & Dividends as a Percentage of Net Income Against Spending on Buybacks ......................................... 816
NEW-BUYBACKS Outperformance of Stocks with Large Buybacks Programs vs S&P 500 .................................................................. 816
BUYBACKS Outperformance of Stocks with Large Buybacks Programs vs S&P 500 ............................................................................ 823
BUYBACKS The real reason for the slowdown has to do with the spread on investment grade debt .................................................... 826
RESEARCH OF NOTE .................................................................................................................................................................................... 830
NEW-BUYBACKS Buybacks Soar ........................................................................................................................................................... 830
NEW-NEW-BUYBACKS Buybacks Must Continue: AAPL, IBM Unveil Major Debt Issuance to Fund Shareholder-Friendliness .......... 831
NEW-BUYBACKS This Is the Biggest EBITDA Drop Outside Of A Recession Since 2000 ..................................................................... 832
NEW-BUYBACKS Stock Buybacks In Jeopardy: Investment Grade Bond Funds See Biggest Outflow In 17 Weeks ............................ 834
BUYBACKS MacroStrategy Explains Why Most Stocks Have Already "Crossed The Rubicon" ............................................................ 837
NEW-BUYBACKS The Cannibalized Corporation- Corporate America is undermining itself. ................................................................. 842
NEW-BUYBACKS The Fly In The Buyback Ointment- Corporate Leverage Is At Record Levels .......................................................... 849
NEW-BUYBACKS Why Stocks Are Sliding: For The First Time Since 2009 Spending On Buybacks Surpasses Free Cash Flow ....... 854
NEW-BUYBACKS When Buybacks Fail... ................................................................................................................................................ 858
NEW-BUYBACKS "Risky Business": Companies Are Now Funding Share Buybacks By Selling Bonds To Other Companies ............ 859
BUYBACKS The Fly In The Buyback Ointment- Corporate Leverage Is At Record Levels .................................................................... 862
BUYBACKS Why The Stock Buyback Party Is Ending ............................................................................................................................ 866
BUYBACKS Goldman Finds Buybacks No Longer Work To Boost Stock Prices: Two Reasons Why ................................................... 868
BUYBACKS Why Stocks Are Sliding: For The First Time Since 2009 Spending On Buybacks Surpasses Free Cash Flow ................ 871
BUYBACKS When Buybacks Fail... ......................................................................................................................................................... 875
BUYBACKS "Risky Business": Companies Are Now Funding Share Buybacks By Selling Bonds To Other Companies ...................... 876
BUYBACKS 94% of total S&P in 2015 will go back to shareholders, as dividends and buybacks ......................................................... 879
BUYBACKS CEO Pay Boosted from Giving Shareholders Cash ............................................................................................................ 880
BUYBACKS Investor-CEO Feedback Loop ............................................................................................................................................. 881
BUYBACKS Buybacks Account for Substantial Share of Corporate Profits ............................................................................................ 882
BUYBACKS Quarterly History of Buyback Announcments ...................................................................................................................... 882
BUYBACKS Buybacks as a Percentage of Total Cash Use at the Highest Level Since 2007................................................................ 883
BUYBACKS Weekly Buybacks and Rolling 3 Month Sum ....................................................................................................................... 883
BUYBACKS What Sustained Buybacks Look Like To Rating Agencies IBM Example ........................................................................ 884
BUYBACKS Dollar Volume of Share Buybacks and Dividends at Record Levels ................................................................................... 884
BUYBACKS Buybacks & Dividends Hurdle $900B in 2014 ..................................................................................................................... 884
BUYBACKS The Growth of Stock Buybacks............................................................................................................................................ 885
BUYBACKS Buybacks & Dividends as a Percentage of Operating Earnings ......................................................................................... 886
BUYBACKS Executive Compensation Structure...................................................................................................................................... 886
BUYBACKS During 2014 virtually 100% of S&P 500s reported profits of $1T were disgorged as shareholder distributions ................ 887
BUYBACKS 2015 US Equity Flows Forecast ........................................................................................................................................... 887
BUYBACKS Announced Gross Share Buybacks ..................................................................................................................................... 888
BUYBACKS Global IPO /Secondary Offerings versus Announced Gross Share Buybacks ................................................................... 888
BUYBACKS Actual Net Share Buybacks ................................................................................................................................................. 889
BUYBACKS US IPOs-Actual Buybacks and LBO .................................................................................................................................... 889
BUYBACKS Cash to Stockholders Exceeds 90% of Profits .................................................................................................................... 890
BUYBACKS Stock Repurchases Surge 30% in Q3 ................................................................................................................................. 890
BUYBACKS Stock Repurchases 2nd Highest on Record at $145B.......................................................................................................... 890
BUYBACKS 2914 YTD Stock Repurchases By Corporation 20 Corporations Over $4B ..................................................................... 891
BUYBACKS Operating EPS With / Without Buybacks ............................................................................................................................. 891
BUYBACKS Sales & Revenue Doesnt Support Reported EPS Due to Buyback Distortion ................................................................... 892
BUYBACKS S&P 500 Buyback Index versus S&P 500 ........................................................................................................................... 893
12
MAY 2016 Edition


BUYBACKS The New S&P 500 Buyback Index TR ................................................................................................................................. 893

BUYBACKS The New S&P 500 Buyback Index Since Start of QE ......................................................................................................... 894
BUYBACKS IBM Total Debt to Equity (to Fund Buybacks) ..................................................................................................................... 894
BUYBACKS IBM Debt Issuance v Buybacks ........................................................................................................................................... 895
BUYBACKS Global FDI into Finance versus Productive Assets ............................................................................................................. 896
BUYBACKS Total Corporate Debt 35% Higher than 2008 Peak Used for Buybacks .......................................................................... 896
BUYBACKS Buyback Bonanza ................................................................................................................................................................ 897
BUYBACKS Buybacks Have Made a 1% Earnings Growth Distortion to Median S&P 500 Company ................................................... 897
BUYBACKS Top 10 Buyback Companies ................................................................................................................................................ 898
BUYBACKS Intel Buybacks ...................................................................................................................................................................... 898
BUYBACKS Shares Outstanding Back at 2000 Level ............................................................................................................................. 899
BUYBACKS Largest Volumes of Buybacks by US Listed Corporation in Last Year ............................................................................... 899
BUYBACKS Corporations Are No Longer Investing But Rather Financial Engineering Stock Prices ..................................................... 900
BUYBACKS Q2 Drop-Off Closer to Normal .......................................................................................................................................... 901
BUYBACKS Borrowing to Buy back Shares ............................................................................................................................................. 901
BUYBACKS Cyclical Nature of Buybacks Evident ................................................................................................................................... 901
BUYBACKS Major Q2 Repurchases ........................................................................................................................................................ 902
BUYBACKS Major Q1 Repurchases ........................................................................................................................................................ 902
BUYBACKS Quarterly Repurchase & Buyback Yield ............................................................................................................................... 903
BUYBACKS US Corporate Cash versus Buybacks .................................................................................................................................. 904
BUYBACKS Net Debt/EBITDA of American Non-Financial Corporations ............................................................................................... 904
BUYBACKS Stock Buybacks To Grind To A Halt Following Massive Credit Fund Outflows, "Bond Carnage" ....................................... 905
BUYBACKS"The End Of The Road" - Debt-Funded Buyback Boosts Are Finite ..................................................................................... 907
BUYBACKS Why There Is No Growth: The Entire S&P 500 Free Cash Flow Is Going Back To Shareholders ...................................... 910
BUYBACKS Do Share Buybacks Create Value? (Spoiler Alert: No) ........................................................................................................ 911
BUYBACKS Surprise! CEOs Are Getting Rich by Buying Back Stock ..................................................................................................... 913
BUYBACKSThe End of Buybacks? Goldman Warns Political Pressure On Share Repurchases Is Rising ............................................ 918
BUYBACKSCorporate Buybacks: Connecting the Dots to the F-Word .................................................................................................... 920
BUYBACKS Capex Recovery Is Worst In History, BoAML Says .............................................................................................................. 925
BUYBACKS Stock Buybacks Move to the "Terminal" Next Stage ............................................................................................................ 928
BUYBACKSOne Heckuva Bull Market ...................................................................................................................................................... 930
BUYBACKS - The US Equity Bubble Depends On Corporate Buybacks; Here's the Proof ....................................................................... 931
BUYBACKS - Why Markets Are Manic - The Fed Is Addicted To the "Easy Button" ................................................................................. 935
BUYBACKS - When $140 Billion In Buybacks Isn't Enough... .................................................................................................................... 937
BUYBACKS - "Obsessive" Buybacks Could Be Big Mistake, "Serious" People Tell Unserious People .................................................... 937
BUYBACKS - Q3 Buybacks Surging, These Are The Top 20 Repurchasers Of Their Own Stock ............................................................ 941
BUYBACKS - Accounting Magic .................................................................................................................................................................. 943
BUYBACKS - The largest source of overall US equity demand in recent years......................................................................................... 945
BUYBACKS - Has Boosted Median Earnings Growth by 100 bps for S&P 500 ......................................................................................... 948
BUYBACKS - Companies Spend Almost All Profits On Buybacks ............................................................................................................. 953
BUYBACKS - Buyback At Biggest Pace Since 2007 .................................................................................................................................. 958
BUYBACKS - Buyback Party Slowing ......................................................................................................................................................... 960
BUYBACKS - Buyback Party Slowing ......................................................................................................................................................... 965
THE $2T TAX RUSE Its a Free Ride for US Corporations ......................................................................................................................... 970
UNPRECEDENTED BUYBACKS LEVELS ................................................................................................................................................. 970
A FREE TAX RIDE....................................................................................................................................................................................... 972
GENERIC TAX EXAMPLE ........................................................................................................................................................................... 972
CHARTS OF NOTE ............................................................................................................................................................................................... 977
CHARTS Finance the Biggest Source of Corporate Funds rising from 19% to 30% .................................................................................. 977
CHARTS Average Age of Private Fixed Assets ........................................................................................................................................... 978
CHARTS Percent of Families With Business Equity .................................................................................................................................... 978
CHARTS Percent of Families With Business Equity .................................................................................................................................... 979
CHARTS New England Patriots NFL Franchise Valuation ......................................................................................................................... 980
CHARTS US Equity Market is Not Outgrowing the Economy AS Measured by the Coincident Indicator .................................................. 981
CHARTS Deviation of Earnings Above / Below Long Term Growth Trend ................................................................................................. 982
CHARTS S&P 500, Moodys Baa Corporate & 30Y UST Yields ................................................................................................................. 982
CHARTS Corporations Carrying Higher Levels of Leverage than a Few Years Ago .................................................................................. 983
CHARTS US Corporate CFROI (Cash Flow ROI) ....................................................................................................................................... 984
CHARTS Weakening Sector Retunrs ........................................................................................................................................................... 984
CHARTS SPX, Corporate Profits versus Employed Population % .............................................................................................................. 985
CHARTS Executive Incentives Distort Earnings .......................................................................................................................................... 985
CAPITALIZATION Market Capitalization as a % of Nominal GDP .............................................................................................................. 986
CAPITALIZATION Market Capitalization Adjusted by Gold and CPI ........................................................................................................... 987
CAPITALIZATION Market Capitalization versus Total Federal Reserve Assets ......................................................................................... 988
CAPITALIZATION Total Market Capitalization versus M2 ........................................................................................................................... 989
CAPITALIZATION Total Market Capitalization versus Monetary Base ....................................................................................................... 990
CAPITALIZATION Total Market Capitalization versus Gross Federal Debt ................................................................................................ 991
CAPITALIZATION Market Capitalization Ratios .......................................................................................................................................... 992
CAPITALIZATION Regional Corporate Loss Comparisons Problems in Japan....................................................................................... 992
CHARTS 7 Year Total Return Cycle ............................................................................................................................................................ 993
CHARTS Profit Margins Shrink as Proportion of GDP ................................................................................................................................. 993
CHARTS Q1 Earnings Pre-Announcements ................................................................................................................................................ 994
CHARTS Q1 Earnings Taken Down Dramatically ....................................................................................................................................... 994
CHARTS Q1 Earnings Already Taken Down By 5% since January ............................................................................................................ 995
CHARTS Positive & Negative Q1 Pre-Announcements .............................................................................................................................. 995
CHARTS Q1 Revenue Slippage in Last 60 Days ........................................................................................................................................ 996
13
MAY 2016 Edition


CHARTS Forward 12 Month EPS vs Price: 10-Year ................................................................................................................................... 997

CHARTS Forward 12 Month EPS vs Price: 10-Year ................................................................................................................................... 997
RESEARCH OF NOTE .......................................................................................................................................................................................... 999
FUNDAMENTALS A Bad Equilibrium & How Speculative Distortion Ends ................................................................................................. 999
FUNDAMENTALS Valuations .................................................................................................................................................................... 1007
FUNDAMENTALS Corporate Profits Vaporizing ........................................................................................................................................ 1012
FUNDAMENTALS Fundamentals No Longer Currently Matter - Proof ..................................................................................................... 1016
FUNDAMENTALS Profit Margins - Is the Ladder Starting to Snap? ......................................................................................................... 1017
FUNDAMENTALS The Great PE Multiple Expansion of 2011-2014 ......................................................................................................... 1024
FUNDAMENTALS Stocks Have Never Been More Expensive Based On Long-Term Growth Forecasts ................................................ 1028
FUNDAMENTALS Long Term Return Trends ........................................................................................................................................... 1030
FUNDAMENTALS Profit Margins Contract as a Percentage of GDP ........................................................................................................ 1032
FUNDAMENTALS Stagnant Wages a Major Contributor to Profits ........................................................................................................... 1034
FUNDAMENTALS Worsening risk/reward fundamentals in US corporate credit ...................................................................................... 1036
TARGETS .............................................................................................................................................................................. 1040

CONCLUSIONS..................................................................................................................................................................... 1044
MARKET MESSAGE ........................................................................................................................................................................................... 1044
I DEFINING CHARTS ....................................................................................................................................................................................... 1051
Defining Chart #3 - The Big M and Super Cycle b ................................................................................................................................... 1052
Defining Chart #4 Intermediate Term Topping Process ............................................................................................................................. 1053
Boundary Conditions ..................................................................................................................................................................................... 1054
Channels & Regressions ............................................................................................................................................................................... 1055
II TARGETS ...................................................................................................................................................................................................... 1064
III QUARTERLY SENTIMENT RISK AND FUNDAMENTALS ......................................................................................................................... 1068
SENTIMENT .................................................................................................................................................................................................. 1068
NEW-RISK ANALYSIS - Complacency ........................................................................................................................................................ 1076
NEW-FUNDAMENTAL ANALYSIS Valuation Summary............................................................................................................................ 1076
IV STUDIES ...................................................................................................................................................................................................... 1078
SHANGHAI ACCORD An Update..................................................................................................................................................................... 1078
CHARTS OF NOTE ....................................................................................................................................................................................... 1078
NEW-SHANGHAI Roadmap We Expect ................................................................................................................................................. 1078
NEW-SHANGHAI Timeline Proof ............................................................................................................................................................ 1079
NEW-SHANGHAI Consequences: Asset Allocation Shift ....................................................................................................................... 1079
NEW-SHANGHAI EURUSD Weekly ....................................................................................................................................................... 1080
NEW-SHANGHAI EURUSD Daily ........................................................................................................................................................... 1080
NEW-SHANGHAI USDJPY Weekly ........................................................................................................................................................ 1081
NEW-SHANGHAI USDJPY Daily ............................................................................................................................................................ 1081
NEW-SHANGHAI USD Daily ................................................................................................................................................................... 1082
Q1 EARNINGS An impending macroeconomic and profits implosion ........................................................................................................... 1083
STUDY: Q1 EARNINGS ................................................................................................................................................................................... 1083
CHARTS OF NOTE ....................................................................................................................................................................................... 1083
NEW-Q1 EARNINGS Q1 Earnings Growth ............................................................................................................................................ 1083
NEW-Q1 EARNINGS Q1 Revenue Growth ............................................................................................................................................ 1084
NEW-Q1 EARNINGS Q2 Earnings & Revenue Growth Projections ...................................................................................................... 1084
NEW-Q1 EARNINGS Ongoing deterioration in Sales and Profits ......................................................................................................... 1086
NEW-Q1 EARNINGS LTM Quarterly S&P 500 GAAP and Non-GAAP EPS......................................................................................... 1087
NEW-Q1 EARNINGS S&P 500 Annual GAAP and Non-GAAP EPS ..................................................................................................... 1088
MARKET BOUNCE Tell Tales of a Bear Market Counter Rally ....................................................................................................................... 1088
CHARTS OF NOTE ....................................................................................................................................................................................... 1089
NEW-BOUNCE Sell Side Consensus Indicators Suggest Wall Street Doesnt Believe in this Rally .................................................... 1089
NEW-BOUNCE A 5-15% Draw-down should be expected by or within Q3 2016 .................................................................................. 1089
NEW-BOUNCE Probabilities of a Draw-down in Next Three Months .................................................................................................... 1090
BUYBACKS Cash Flow Now A Looming Problem ........................................................................................................................................... 1090
STUDY: BUYBACKS ........................................................................................................................................................................................... 1090
CHARTS OF NOTE ....................................................................................................................................................................................... 1090
NEW-BUYBACKS Y-o-Y Change in Corporate Net Debt versus Cash Flow (%) .................................................................................. 1090
V - TRIGGER$ ZONES ........................................................................................................................................................................................ 1092
VI - DRIVER$ & BIA$ ........................................................................................................................................................................................... 1093
14
MAY 2016 Edition


MONTHLY PROCESS OF ABSTRACTION

The Monthly Market Analytics & Technical Analysis Report is an integral part of our monthly Process of Abstraction
research methodology. The process starts monthly from the Tipping Points and completes with a final Synthesis.
The sequence is optimized to align with the established Macro Economic Data releases.
Plan
III.
IV.
II.
Release
Date
4th Week of the
Month
2nd Week of the

month No later
than the 17th
Third Tuesday of
the Month
Service
Focus
Coverage
Tipping Points
Tipping Points
Abstraction
Global Macro
Abstraction
US Economy
Technical Analysis
Technical Analysis
Market Analytics
Fundamental Analysis
Market Analytics
Risk Analysis
Synthesis
Commentary
Thesis
Conclusions
Global Macro Tipping Points

(GMTP)
Market Analytics & Technical

Analysis (MTA)
Monthly Market Commentary

(MMC)
RISK LEVELS: HIGHLY ELEVATED
15
MAY 2016 Edition



RPT MTA 2016 05 Peek

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

RPT MTA 2016 05 Peek

Hochgeladen von

Copyright:

Verfügbare Formate

Monthly Market Analytics & Technical Analysis

MAY 2016 Edition

MATA- MAY 2016

1 MAY 2016 Edition

Restricted & Confidential

Monthly Market Analytics & Technical Analysis

OUR APPROACH - MACRO ANALYTICS ...................................................................................................................................... 48

MAY 2016 Edition

Restricted & Confidential

MAY 2016 Edition

Restricted & Confidential

OUTLOOK - ANALYTICAL ANALYSIS .......................................................................................................................................... 178

MAY 2016 Edition

Restricted & Confidential

Q1 EARNINGS Pro-Forma and GAAP Earnings Diverge Significantly ................................................................................................... 190

MAY 2016 Edition

Restricted & Confidential

SHORT TERM SENTIMENT ..................................................................................................................................................... 347

MAY 2016 Edition

Restricted & Confidential

CHARTS Cumulative Flows by Client Type - YTD ....................................................................................................................................... 378

INTERMEDIATE TERM RISK ANALYSIS ................................................................................................................................. 401

MAY 2016 Edition

Restricted & Confidential

NEW-RISK Bull-Bear Ratio Collapses ...................................................................................................................................................... 433

MAY 2016 Edition

Restricted & Confidential

LONGER TERM - FUNDAMENTAL ANALYSIS .............................................................................................................................. 633

MAY 2016 Edition

Restricted & Confidential

NEW-VALUATION SUMMARY ....................................................................................................................................................................... 638

MAY 2016 Edition

Restricted & Confidential

MAY 2016 Edition

Restricted & Confidential

MAY 2016 Edition

Restricted & Confidential

BUYBACKS The New S&P 500 Buyback Index TR ................................................................................................................................. 893

MAY 2016 Edition

Restricted & Confidential

CHARTS Forward 12 Month EPS vs Price: 10-Year ................................................................................................................................... 997

TARGETS .............................................................................................................................................................................. 1040

MAY 2016 Edition

Restricted & Confidential

MONTHLY PROCESS OF ABSTRACTION

2nd Week of the

Global Macro Tipping Points

Market Analytics & Technical

Monthly Market Commentary

RISK LEVELS: HIGHLY ELEVATED

MAY 2016 Edition

Restricted & Confidential

Das könnte Ihnen auch gefallen