A failed plan to start our video with this song was thwarted by the fact that Zoom apparently scrubs out music from videos. Thus, my multiple references to a song playing that you all never hear. You’ll have to listen on YouTube if you want the intended experience…
We're going down, down in an earlier round
And sugar, we're going down swinging
- Fall Out Boy, “Sugar we’re going down”
Good morning,
I was never a huge Fall Out Boy fan, but I can’t get the chorus above out of my head whenever I look at the S&P 500.
On one hand, you could make the case that the S&P 500 has survived an AI-driven software collapse, a surprise war, a 50% increase in oil prices in a matter of weeks, and is only down 5.4% from the highs.
I’ll give it to you; the index has been resilient, and the pattern of morning gaps lower, followed by intraday rallies, seems to speak to some underlying bid and institutional demand for equities.
But make no mistake, I believe it won’t last, and I think this market is going lower.
As today’s report will show, all of the concerning dynamics that we were calling out before oil spiked are getting worse, not better.
In addition, and adding to the bear case, is that sentiment has been steadfastly complacent.
I’m not saying it’s January 2018, and everybody is crazy bullish. But some of the most important sentiment measures are basically the same as they were a month ago, before a 50% oil supply shock.
Does that really make sense?
This week’s report will review:
Key levels to watch on oil
The December Low Indicator
Some of the biggest casualties of the oil price spike
Internals, breadth, and sentiment
A few bright spots
Precious metals breaking down
and more!
