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Monthly Market Analytics & Technical Analysis

NOVEMBER 2015 Edition

SECTIONAL REPORT

MATA- NOVEMBER 2015

11/16/2015

1 NOVEMBER 2015 Edition


Copyright 2015 Gordon T. Long All Rights Reserved

Restricted & Confidential


general@GordonTLong.com

Monthly Market Analytics & Technical Analysis


NOVEMBER 2015
HIGHLIGHTS - WHAT YOU NEED TO KNOW ................................................................................................................................. 14
SUMMARY ANALYSIS ............................................................................................................................................................................................ 14
Era of Delusional Distortions & the Super Cycle Pivot b .................................................................................................................................... 27
Defining Chart #1 - "Delusional Distortion" Expectations & the Log-Periodic Cycle ......................................................................................... 29
Defining Chart #2 - Finding the Longer Term Super Cycle Pivot b ................................................................................................................ 30
Defining Chart #3 - The Big M and Super Cycle b ....................................................................................................................................... 31
Defining Chart #4 Intermediate Term Topping Process ................................................................................................................................. 33
The Bottom Line................................................................................................................................................................................................. 36

OUR APPROACH - MACRO ANALYTICS ...................................................................................................................................... 39


NOVEMBER 2015: Global Macro Drivers ............................................................................................................................................................... 41
NEW-WEALTH .................................................................................................................................................................................................. 43
UPDATED-HARD ASSETS - Gold ................................................................................................................................................................ 43
UPDATED-HARD ASSETS Silver .............................................................................................................................................................. 45
UPDATED-HARD ASSETS - Commodities .................................................................................................................................................. 46
UPDATED-NEW-EXCHANGE .......................................................................................................................................................................... 47
CURRENCIES - USD .................................................................................................................................................................................... 47
UPDATED-CURRENCIES - EURO ............................................................................................................................................................... 48
CURRENCIES - YEN ..................................................................................................................................................................................... 50
UPDATED-CARRY TRADE - The : Cross ............................................................................................................................................... 52
UPDATED-CARRY TRADE - The $: Cross ............................................................................................................................................... 55
NEW-YIELD, CREDIT & SPREAD .................................................................................................................................................................... 56
NEW-EQUITIES - Global ................................................................................................................................................................................... 58
CHARTS & RESEARCH OF NOTE .................................................................................................................................................................. 59
YIELD ............................................................................................................................................................................................................. 59
NEW-YIELD The Smart Money Has Never Been This Long the Long Bond ......................................................................................... 59
NEW-YIELD Goldman Joins Chorus Warning on Bank Market Liquidity ............................................................................................... 59
NEW-YIELD Change In Trend May Be About Concerns With Credit & Cash Flows ............................................................................. 60
NEW-YIELD Expect 1.00% Yield on 10Y UST ....................................................................................................................................... 60
NEW-YIELD Primary Dealer: Investment Grade Net Positions .............................................................................................................. 60
NEW-YIELD Primary Dealers: Junk Bond Net Positions ........................................................................................................................ 61
YIELD 10Y EU Country Government Bond Yields ................................................................................................................................. 62
YIELD UST Note Yields Fall the Most Since 2009 after the Fed Goes On Hold ................................................................................... 62
YIELD German & US 10Y Bonds Fall Dramatically In Yield Trend is Now Down ............................................................................... 62
CREDIT .......................................................................................................................................................................................................... 64
NEW-CREDIT Weak Balance Sheets under Pressure - Concerns about Credit Risk ........................................................................... 65
NEW-CREDIT Something Up in the Repo Market?................................................................................................................................ 65
NEW-CREDIT High Yield Credit 2007 versus Today .......................................................................................................................... 66
CREDIT High Yield Spread the Largest Since June 2012 ..................................................................................................................... 67
CREDIT The spread between BAA and 10-year treasuries is the widest since July 2012 .................................................................... 67
CREDIT The spread between BAA and Industrial Production ............................................................................................................... 67
CREDIT High Yield Spreads to 10Y UST & 10Y Breakeven Inflation .................................................................................................... 68
CREDIT Credit Stress Intensifies US Corporate HY ........................................................................................................................... 69
CURRENCIES ............................................................................................................................................................................................... 70
NEW-CURRENCIES EURUSD continues to weaken as Draghi reinforces the ECB's dovish stance .................................................. 70
NEW-CURRENCIES Strong USD a Driver of Falling Commodities, Falling Energy and EM Problems ............................................... 70
CURRENCIES It is Still About the Japanese Carry Trade But Concerns Growing ............................................................................. 71
CURRENCIES Everyone Is Probably Wrong About the US Dollar ........................................................................................................ 71
COMMODITIES ............................................................................................................................................................................................. 75
NEW-COMMODITIES Copper Falls To Fresh 6 Years Low After $GS Says Metal "Poised To Move Even Lower" ............................ 75
COMMODITIES Algos Locked into WTI Crude & Alternatively the USDJPY ........................................................................................ 76
COMMODITIES Why commodities are dying the death of 1,000 cuts ................................................................................................... 76
COMMODITIES The Weak Trend In EM currencies and Commodities Isnt Abating ............................................................................ 77
COMMODITIES How Saudi Arabia Sets the Global (Currency) Markets .............................................................................................. 78
INFLATION .................................................................................................................................................................................................... 82
INFLATION Expected Inflation- One Year and Three Years Ahead ...................................................................................................... 82
INFLATION Inflation Expectations & Relative Performance................................................................................................................... 82
INFLATION US CPI 1958 2015 Annual Percentage Change .......................................................................................................... 84
INFLATION The Rise of Deflation ........................................................................................................................................................... 85
INFLATION World Inflation Falls To 59-Month Low ....................................................................................................................... 85
PRECIOUS METALS ..................................................................................................................................................................................... 87
PRECIOUS METALS Gold demand in Asia hit by weak local currencies; Indian prices at discount .................................................... 87
PRECIOUS METALS Gold Tracked US Debt Until Recently Will Likely Re-Establish Long Term Pattern .................................... 88
RISK: Risk-On versus Risk-Off ................................................................................................................................................................................ 89
CHARTS OF NOTE ........................................................................................................................................................................................... 90
NEW-RISK Markets Historically Fail after Three months of Falling Margin Debt We Have 2 Months ................................................... 90
NEW-RISK Margin Debt Channel is Pretty Clear High Odds of Troubles Ahead ................................................................................... 90
NEW-RISK Goldman Joins the Chorus Warning on Bond Market Liquidity .............................................................................................. 91
NEW-RISK So Goes Retail So Goes the US Economy .......................................................................................................................... 91

NOVEMBER 2015 Edition


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Restricted & Confidential


general@GordonTLong.com

NEW-RISK Consumer Discretionary Sending Signals ............................................................................................................................... 92


NEW-RISK Net EBITDA 2x Highest since 2006 % of companies with net cash Lowest since 2006 ........................................................ 94
NEW-RISK US Corporate Net Debt Has Exploded & Now Massively Exceeds EBITDA .......................................................................... 94
NEW-RISK CBOE Skew Index ................................................................................................................................................................... 95
NEW-RISK Gap Between Uncertainties Priced in the Debt & Equity Markets .......................................................................................... 95
NEW-RISK Beware of EPS manipulation ................................................................................................................................................... 96
RISK Total NYSE Short Interest & Monthly Change .................................................................................................................................. 97
RISK Contrasting Post October Market Drawdowns 1973s Slow Pain versus 1987 Crash................................................................. 97
RISK Historical Post-Crash Price Actions 1950 to 2015 ......................................................................................................................... 98
RISK Historical Post-Crash Price Pattern Has Taken an Average of 27 days to Double Bottom ............................................................. 98
RISK Credit Fleeing IG,HY & EM ............................................................................................................................................................... 99
RISK Credit Fleeing IG,HY & EM ............................................................................................................................................................... 99
RISK Margin Debt in NYSE Accounts versus S&P 500 ........................................................................................................................... 100
RISK Credit Risk Increasing ..................................................................................................................................................................... 101
RISK TED Spread Increasing ................................................................................................................................................................... 101
RISK VIX Pricing in Credit Problems ........................................................................................................................................................ 102
RISK Credit Always Leads Markets Its the Life Blood! ...................................................................................................................... 102
RISK The Pattern is Clear QE the Market Driver .................................................................................................................................. 103
RISK Internal deterioration in the market is more consistent with the development of more major bull market peaks ........................ 104
RISK A huge gap has opened up between reality and perceptions ......................................................................................................... 105
RISK Economic Surprise Index lower highs, lower lows and a reluctant bounce ................................................................................. 106
RISK Weekly Equity Outflows ................................................................................................................................................................... 106
RISK Weekly EM Fund Outflows .............................................................................................................................................................. 107
RISK Net Outflows as a % of AUM by Year ............................................................................................................................................. 108
RISK HG Spread Per Point of Equity Volume .......................................................................................................................................... 109
RISK Widening Gap between Debt & Equity ............................................................................................................................................ 109
RISK HY Bond ETF (HYG) versus S&P 500 ............................................................................................................................................ 109
RISK HY Credit versus 2007-2008 Credit Always Leads Equity ........................................................................................................ 110
RISK Leutholds High/Low Logic Index Sending a Clear Signal .............................................................................................................. 111
RISK Just Too Many One in a Million Standard Deviation Events! ....................................................................................................... 112
RISK Days with > 100 NYSE & NASDAQ New Highs AND New Lows ................................................................................................... 112
RISK Correlated, Confirmed Hindenburg Omens .................................................................................................................................... 113
RISK Broad Global Equity Index Sitting on the Precipice ........................................................................................................................ 114
RESEARCH OF NOTE .................................................................................................................................................................................... 114
NEW-RISK Goldman's Clients Are Suddenly Very Worried About Collapsing Market Breadth .............................................................. 114
NEW-RISK Classic sign of diminishing breadth for global equity market indices .................................................................................... 118
RISK 10 Signs That Stocks Are Way Overpriced ..................................................................................................................................... 122
RISK The Biggest Short Squeeze In Years" Says Bank of America ........................................................................................................ 124
RISK NYSE Margin Debt Declines Again In August ................................................................................................................................ 128
RISK Economic Surprises Are Turning Back Over In The US ................................................................................................................. 130
RISK Interbank Credit Risk Is Rising Ominously Again In America ......................................................................................................... 133
RISK Doug Kass: There is a Blizzard Ahead! ........................................................................................................................................ 135
RISK Oblivious To Risk - Complacency Still Reigns ................................................................................................................................ 136
RISK Why Selling the Blips Makes Sense ................................................................................................................................................ 140
RISK Biggest Outflow from Equity Funds In 2015 Offset By Longest Treasury Inflow Streak In 4 Years............................................... 141
RISK The 17-year river [of reserve currency buildup and QE around the world] is no longer flowing .................................................... 145
RISK New Strategies "Are Creating Volatility" .......................................................................................................................................... 145
RISK Why SocGen Is Very Nervous About the Recent Loss Of $9 Trillion In Global Market Cap.......................................................... 147
RISK Goldman Warns, VIX "Is Pricing In A Lot Of Economic Damage" .................................................................................................. 149
RISK This Alarming Indicator Is Back At A Level Last Seen 10 Days before The Bear Stearns Collapse ............................................. 152
RISK Beware 1200 On The Russell - Breadth Breakdown Is Big Risk To Small Caps, BofA Warns ..................................................... 155
RISK When Hindenburg Omens Are Ominous......................................................................................................................................... 156
RISK "One Would Be Bucking Pretty Stiff Odds To Ignore This Development" ...................................................................................... 158
RISK One-In-A-Billion "Hiccups" Are Happening All The Time, Citi Warns Something Is Wrong ........................................................... 159
RISK The Chart That No Stock Market Bull Wants To See ..................................................................................................................... 160
TECHNO-FUNDAMENTALS ................................................................................................................................................................................. 163
CHARTS OF NOTE ......................................................................................................................................................................................... 163
NEW-CHARTS Professionals Are Leaving the Party Early ..................................................................................................................... 163
NEW-CHARTS NYSE Advance-Decline Line versus S&P ...................................................................................................................... 163
NEW-CHARTS A month-long bearish divergence for the US 15 most active advance-decline line ....................................................... 163
NEW-CHARTS A-D line preceded or coincided with big breakdowns for the S&P 500 in 2000 and 2007 ............................................. 164
NEW-CHARTS A major bearish divergence for global A-D line in US Dollars ........................................................................................ 164
NEW-CHARTS Be Alert to Oversold Pull Back Before Seasonal YE Strength ....................................................................................... 166
NEW-CHARTS Leading Indicators Support View The Current Weakness May Turn into a Buying Opportunity ................................... 167
NEW-CHARTS Problem in US Retail Developing .................................................................................................................................... 167
NEW-CHARTS Gold Reacted to Chinese Devaluation ............................................................................................................................ 168
NEW-CHARTS The DOW Theory & DOW Transports ............................................................................................................................ 169
NEW-CHARTS October- A Month for the History Books ......................................................................................................................... 170
NEW-CHARTS The Smart Money Has Never Been This Long the Long Bond ...................................................................................... 170
CHARTS Real S&P 500 Index Cycles with Recessions .......................................................................................................................... 172
CHARTS Quarterly Overbought Cycles ................................................................................................................................................... 172
CHARTS Monetary Velocity Declines as Excess Leverage Weights on Consumption ........................................................................... 172
CHARTS The Real Value of Cash ............................................................................................................................................................ 173
CHARTS Consumer Sentiment versus S&P 500 ..................................................................................................................................... 173
CHARTS Hedgers Net Long Record of S&P 500 Futures ....................................................................................................................... 174
CHARTS Fed Balance Sheet Changes versus S&P 500 ......................................................................................................................... 175

NOVEMBER 2015 Edition


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CHARTS S&P Futures versus Relative Volumes ..................................................................................................................................... 175


CHARTS Japanese Buying Foreign Stocks ............................................................................................................................................. 176
CHARTS Monetary Initiatives versus S&P 500 ........................................................................................................................................ 177
CHARTS Bull Trend Line Support ............................................................................................................................................................ 177
CHARTS DOW Industrial 200 WMA Boundary Condition & Trend Direction Change Indicator.............................................................. 178
CHARTS DOW Industrial 200 WMA Boundary Condition & Trend Direction Change Trigger ................................................................ 178
CHARTS Global 150 Equity Index Bounces off Lower Support Channel ................................................................................................ 179
CHARTS Global 150 Equity Index Potential Key Support Levels ......................................................................................................... 179
CHARTS The Rout May Have Just Began According to Some ............................................................................................................... 180
CHARTS The VIX Termination Algo ......................................................................................................................................................... 180
CHARTS The VIX Termination Algo ......................................................................................................................................................... 181
CHARTS Pick-Up In Buyback Activity ...................................................................................................................................................... 182
CHARTS Buybacks Are Tied to Investment Grade Credit Spreads ........................................................................................................ 182
CHARTS Coincident / Lagging Indicator Ratio ......................................................................................................................................... 183
CHARTS Annual Change in Durable Goods Orders ................................................................................................................................ 183
CHARTS Durable Goods v Core-Durable Goods (Ex Defense) .............................................................................................................. 184
CHARTS Real Gross Domestic Investment ............................................................................................................................................. 184
CHARTS Total Real Private Fixed Investment as % of Real GDP .......................................................................................................... 185
CHARTS Businesses Operate Against Actual Demand ........................................................................................................................... 185
CHARTS ISM Composite Index ................................................................................................................................................................ 186
CHARTS Capacity Utilization versus Industrial Production ..................................................................................................................... 186
CHARTS Retail Sales (NSA) Annual % Chg of 12 Month Average ......................................................................................................... 187
CHARTS Monthly Retail Control Purchases Y-o-Y % Chg ................................................................................................................. 188
CHARTS Major Economic Trends ............................................................................................................................................................ 188
CHARTS $9T Loss In Global Market Cap ................................................................................................................................................ 189
CHARTS Median EV/EBITDA Ratio for MSCI World (ex Financials) ...................................................................................................... 189
CHARTS 15 Developed Country Aggregate Bond PLUS Stock Valuations ............................................................................................ 190
CHARTS 15 Developed Country Aggregate -83% are in their top 20% of valuations through history .................................................... 190
CHARTS Death Cross .............................................................................................................................................................................. 190
CHARTS Asian Dollar Index Flags Crisis Events ..................................................................................................................................... 192
CHARTS TSY 2s30s Spread .................................................................................................................................................................... 192
CHARTS S&P versus HY(High Yield) & IG (Investment Grade) .............................................................................................................. 193
CHARTS Fed Balance Sheet versus HYG (HY Bond ETF) ..................................................................................................................... 193
CHARTS Commodity Carnage ................................................................................................................................................................. 194
CHARTS Market Expectations of Support & Resistance ......................................................................................................................... 195
CHARTS Russell 2000 Head & Shoulders versus AD Line ..................................................................................................................... 195
CHARTS NYSE - NYA Head & Shoulders versus AD Line ..................................................................................................................... 196
CHARTS Dotcom Bubble Burst 2 Year Process and a Year After the Long Trend Broken Was Broken ............................................ 197
CHARTS A Spike in New Lows around the World ................................................................................................................................... 197
CHARTS A Spike in New Lows around the World MSCI Europe ......................................................................................................... 198
CHARTS A Spike in New Lows around the World North America ........................................................................................................ 198
CHARTS A Spike in New Lows around the World MSCI Pacific .......................................................................................................... 198
CHARTS A Spike in New Lows around the World MSCI Emerging Markets ....................................................................................... 199
CHARTS A Spike in New Lows around the World MSCI EM EMEA .................................................................................................... 199
CHARTS A Spike in New Lows around the World MSCI EM Latin America ........................................................................................ 200
CHARTS A Spike in New Lows around the World MSCI EM Asia........................................................................................................ 200

OUTLOOK - ANALYTICAL ANALYSIS .......................................................................................................................................... 202


Q3 EARNINGS Earnings Now Surfacing as a Problem ..................................................................................................................................... 202
STUDY: Q3 EARNINGS - ...................................................................................................................................................................................... 202
CHARTS OF NOTE ......................................................................................................................................................................................... 202
NEW-Q3 EARNINGS Biggest Drop in Profits Since 2009 ....................................................................................................................... 202
NEW-Q3 EARNINGS Negative Sales Surprise Ran Significantly Higher than Average ......................................................................... 202
NEW-Q3 EARNINGS Y-o-Y Change in Quarterly Earnings and Revenue for S&P 500 ......................................................................... 203
NEW-Q3 EARNINGS Forward Earnings being Brought Down Rapidly ................................................................................................... 203
NEW-Q3 EARNINGS # S&P 500 Companies Citing Negative Q3 Impacts - Reasons ........................................................................... 204
NEW-Q3 EARNINGS Q4 15 Estimated Earnings Growth Rate .............................................................................................................. 204
NEW-Q3 EARNINGS Revenue & Earnings Consensus Estimated Growth Rate .................................................................................. 205
Q3 EARNINGS Q3 EPS Expected to Fall -4.5% According to Factset ................................................................................................... 206
Q3 EARNINGS S&P 500 Average Earnings Growth Y-o-Y Not a Good Pattern .................................................................................. 206
Q3 EARNINGS Revenue Recession and Flat EPS Consensus .............................................................................................................. 207
Q3 EARNINGS Forward EPS Consensus Matches Manufacturing Surveys Declines ........................................................................... 207
Q3 EARNINGS Q3 Earnings Growth (Decline): Ex-BAC ......................................................................................................................... 208
Q3 EARNINGS IT Sector Q3 Earnings Forecast to be Down -5.9% Without Apple (-0.4% With) .......................................................... 208
Q3 EARNINGS A Good Sign that Goldman Must Be Selling? ................................................................................................................. 209
Q3 EARNINGS It Should Be Expected that Earnings Will Begin to fall ................................................................................................... 209
RESEARCH OF NOTE .................................................................................................................................................................................... 210
NEW-Q3 EARNINGS The Most Important Earnings Report You Should Know About ........................................................................... 210
NEW-Q3 EARNINGS Q3 Earnings -Where We Stand - 4 Main Themes From Calls .............................................................................. 212
NEW-Q3 EARNINGS Goldman's 4 Word Summary Of Q3 Earnings Season- -Adequate Earnings, Dismal Sales ............................... 220
Q3 EARNINGS Do You See What Happens, Alcoa, When Your "Restructuring" Non-GAAP Add-backs Tumble ................................. 226
Q3 EARNINGS Q3 Earnings Bloodbath-Terrible Monsanto Results- Company Fires 2,600 - ................................................................ 227
Q3 EARNINGS Wall Street is preparing for the worst earnings season since 2009 ............................................................................. 229
Q3 EARNINGS The Truth About S&P 500 Earnings: No Growth For 7 Quarters, With A Revenue Recession On Top ........................ 233
BUYBACKS Update ............................................................................................................................................................................................ 233

NOVEMBER 2015 Edition


Copyright 2015 Gordon T. Long All Rights Reserved

Restricted & Confidential


general@GordonTLong.com

STUDY: BUYBACKS ............................................................................................................................................................................................. 234


CHARTS OF NOTE ......................................................................................................................................................................................... 234
NEW-BUYBACKS Outperformance of Stocks with Large Buybacks Programs vs S&P 500 .................................................................. 234
NEW-BUYBACKS Gross Leverage for Typical IG/HY Non-Financial Debt-EBITDA............................................................................ 234
NEW-BUYBACKS Equity Market Performance v S&P 500 Uses of Cash ............................................................................................... 235
NEW-BUYBACKS Default Rate v Net Equity Buybacks .......................................................................................................................... 235
NEW-BUYBACKS S&P 500 Buyback Index 200 DMA ......................................................................................................................... 236
NEW-BUYBACKS S&P 500 v Buyback Index Performance .................................................................................................................... 236
NEW-BUYBACKS S&P 500 Annualized Share Buybacks, Dividends and Earnings .............................................................................. 237
BUYBACKS Falling Investment Grade Spreads Hurting Buybacks ......................................................................................................... 238
BUYBACKS Quarterly Share Repurchases & No. of Companies Repurchasing Shares Slows ............................................................. 238
BUYBACKS Dollar-Value Buybacks to Free Cash Flow Trailing Twelve Month Basis ........................................................................ 238
BUYBACKS Nearly 25% of Annual Buybacks Occur in November & December .................................................................................... 239
RESEARCH OF NOTE .................................................................................................................................................................................... 241
NEW-BUYBACKS The Fly In The Buyback Ointment- Corporate Leverage Is At Record Levels .......................................................... 241
BUYBACKS Why Stocks Are Sliding: For The First Time Since 2009 Spending On Buybacks Surpasses Free Cash Flow ................ 246
BUYBACKS When Buybacks Fail... ......................................................................................................................................................... 250
BUYBACKS "Risky Business": Companies Are Now Funding Share Buybacks By Selling Bonds To Other Companies ...................... 251
WEAKENING BREADTH Market Has Lost Momentum ..................................................................................................................................... 255
NEW-STUDY: WEAKENING BREADTH ............................................................................................................................................................... 255
NEW-CHARTS OF NOTE ............................................................................................................................................................................... 255
NEW-BREADTH Need to Understand FANG and NOSH ................................................................................................................... 255
NEW-BREADTH NYSE Advance-Decline Line versus S&P .................................................................................................................... 255
NEW-BREADTH A month-long bearish divergence for the US 15 most active advance-decline line ..................................................... 256
NEW-BREADTH A-D line preceded or coincided with big breakdowns for the S&P 500 in 2000 and 2007 .......................................... 256
NEW-BREADTH A major bearish divergence for global A-D line in US Dollars ...................................................................................... 256
NEW-BREADTH Goldman Sachs Breadth Index Near Historic Lows ..................................................................................................... 257
NEW-RESEARCH OF NOTE .......................................................................................................................................................................... 258
NEW-BREADTH Goldman's Clients Are Suddenly Very Worried About Collapsing Market Breadth ..................................................... 258
NEW-BREADTH Classic sign of diminishing breadth for global equity market indices ........................................................................... 262
RECESSION RUMBLINGS Revenue, Earnings & Economic ............................................................................................................................ 267
NEW-STUDY: RECESSION SIGNALS ................................................................................................................................................................. 267
NEW-CHARTS OF NOTE ............................................................................................................................................................................... 267
NEW-RECESSION US Inventories .......................................................................................................................................................... 267
NEW-RECESSION US Flattening US Yield Curve .................................................................................................................................. 267
NEW-RECESSION US Manufacturing Sector Recession........................................................................................................................ 268
NEW-RECESSION Large Profit Margin Declines Coincides With Recessions ....................................................................................... 269
NEW-RECESSION Buybacks Drop on Reduced Free Cash Flow Drop Compared to Previous Recession ....................................... 269
NEW-RECESSION Annual % Change in 12Mo Forward EPS Expectations Turn Negative .................................................................. 270
NEW-RECESSION US Recession Estimates Pop ................................................................................................................................... 270
NEW-RECESSION US Recession Indicator & Relative Performance of Stocks & Bonds ...................................................................... 271
NEW-RECESSION Real S&P 500 Index with Historical Recessions ...................................................................................................... 271
NEW-RECESSION September Survey Data versus Non Farm Payrolls ................................................................................................ 272
NEW-RECESSION Regional Surveys for September versus ISM PMI (August) .................................................................................... 272
NEW-RECESSION Regional Manufacturing Surveys versus Forward EPS Estimates .......................................................................... 273
NEW-RECESSION Historical Regional Index Comparisons Last Seen in 2008 .................................................................................. 273
NEW-RECESSION Global Oil Consumption Leads Economic Growth Trend is Down Global Headwinds ...................................... 274
NEW-RECESSION Gross Domestic Income versus Wilshire 5000 Tells the Story ............................................................................. 275
RECESSION CT 2015 Revenue Recession ............................................................................................................................................ 275
RECESSION Q2 2015 Revenue Recession ............................................................................................................................................ 276
RECESSION 4 Consecutive months of y/y Spending Declines ............................................................................................................... 276
RECESSION BOA: Retail sales ex-autos, plunged 0.8% mom seasonally adjusted............................................................................ 277
RECESSION Top 10 US Market Areas Signal Retail Problem Underway .............................................................................................. 277
RECESSION Wholesale Inventories to Sales Spiking To Areas Seen During Recession Trends ......................................................... 278
RECESSION Wholesale Inventories Less Wholesale Sales ................................................................................................................... 279
RECESSION Wholesale Inventories vs GDP Trends .............................................................................................................................. 279
RECESSION Auto Inventories to Sales ................................................................................................................................................... 280
RECESSION Falling Collateral and Residuals Undermine Real Growth .............................................................................................. 280
RECESSION Coincident / Lagging Indicator Ratio versus Recessions ................................................................................................... 281
RECESSION Annual Change in Durable Goods Orders v Recessions ................................................................................................... 281
RECESSION Durable Goods v Core-Durable Goods (Ex Defense) versus Recessions ........................................................................ 282
RECESSION Real Gross Domestic Investment versus Recessions ....................................................................................................... 282
RECESSION Total Real Private Fixed Investment as % of Real GDP versus Recessions .................................................................... 283
RECESSION Businesses Operate Against Actual Demand versus Recessions .................................................................................... 283
RECESSION ISM Composite Index versus Recessions.......................................................................................................................... 284
RECESSION Capacity Utilization versus Industrial Production versus Recessions ............................................................................... 284
RECESSION Retail Sales (NSA) Annual % Chg of 12 Month Average versus Recessions ................................................................... 285
RECESSION Monthly Retail Control Purchases Y-o-Y % Chg versus Recessions........................................................................... 285
RECESSION Major Economic Trends...................................................................................................................................................... 286
NEW-RESEARCH OF NOTE .......................................................................................................................................................................... 287
NEW- RECESSION 18 Bullets Showing That A Global Recession Is Already Here ............................................................................... 287
NEW- RECESSION The Recessions Are Underway ............................................................................................................................... 289
NEW- RECESSION Retail Stocks Are Crashing At the Fastest Pace in Over 4 Years........................................................................... 299
NEW- RECESSION Economists Finally Admit, Odds Of A US Recession Are On The Rise ................................................................. 301
RECESSION Retail Sales Slump on Deck ............................................................................................................................................... 303

NOVEMBER 2015 Edition


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Restricted & Confidential


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RECESSION This Is another "Subprime" Waiting To Blow ..................................................................................................................... 305


RECESSION Record Gap between US Inventories and Sales Screams Recession .............................................................................. 308
RECESSION August spending was the weakest in nominal dollar terms since 2012 ............................................................................. 310
RECESSION The Next Recession Will Definitely Not Happen In 2018 ................................................................................................... 315

SHORT TERM TECHNICAL ANALYSIS ..................................................................................................................................... 317


SUPPORT & RESISTANCE .................................................................................................................................................................................. 317
Gann Analysis .................................................................................................................................................................................................. 317
Boundary Conditions ....................................................................................................................................................................................... 318
Channels & Regressions ................................................................................................................................................................................. 319
Fibonacci - Controlling Time Extensions ......................................................................................................................................................... 322
Fibonacci - Controlling Price Extensions ......................................................................................................................................................... 324
Elliott Wave ...................................................................................................................................................................................................... 325
The Bottom Line............................................................................................................................................................................................... 327

SHORT TERM CONFIDENCE & SENTIMENT .............................................................................................................................. 330


BUSINESS CYCLE - CONSUMER & BUSINESS SENTIMENT ........................................................................................................................... 330
SENTIMENT & CONFIDENCE Shifting Trend ................................................................................................................................................... 330
A GRAPHIC HIGHLIGHT ................................................................................................................................................................................ 330
NEW-SENTIMENT - Consumer, Investor & Trader ............................................................................................................................................... 333
NEW-Consumer Confidence - Conference Board .......................................................................................................................................... 333
NEW-Consumer Sentiment - Michigan ........................................................................................................................................................... 337
NEW-Consumer Comfort - Bloomberg ............................................................................................................................................................ 339
NEW-American Association of Independent Investors ................................................................................................................................... 341
NEW-Investors Intelligence ............................................................................................................................................................................. 341
NEW-National Association of Active Investment Managers (NAAIM) ............................................................................................................ 342
NEW-Small Business Optimism ...................................................................................................................................................................... 343
NEW-Percentage Stocks above 50 & 200 DMA ............................................................................................................................................. 345
NEW-Margin Levels ......................................................................................................................................................................................... 346
Real Margin Debt as % of GDP ....................................................................................................................................................................... 351
Margin Debt versus S&P 500 .......................................................................................................................................................................... 351
Mutual Fund Cash Levels v S&P 500 .............................................................................................................................................................. 352
NEW-OSCILLATORS & BREADTH: Indicators of Importance ............................................................................................................................ 354
NEW-NYSE Overbought / Oversold ................................................................................................................................................................ 354
NEW-OEX Open Interest (Puts/Calls) ............................................................................................................................................................. 355
NEW-TRIN ....................................................................................................................................................................................................... 356
NEW-McClellan Oscillator ............................................................................................................................................................................... 357
CHARTS OF NOTE ............................................................................................................................................................................................... 358
NEW-CHARTS Small Business Sentiment Trending Down Strongly .......................................................................................................... 358
NEW-CHARTS Small Business Sentiment Margin Squeeze .................................................................................................................... 358
NEW-CHARTS Bloomberg Consumer Comfort versus Nasdaq .................................................................................................................. 359
NEW-CHARTS Goldmans Short Term Sentiment Indicator Shows Low Suggests Near Term Counter Rally Likely ............................. 360
NEW-CHARTS Global Consumer Confidence Begins Reversal from Trend Resistance ........................................................................... 361
NEW-CHARTS US Economic Index Steadily Eroding ................................................................................................................................. 362
NEW-CHARTS UMich Consumer Confidence with Biggest Miss on Record .............................................................................................. 362
NEW-CHARTS Economic Surprise Index lower highs, lower lows and a reluctant bounce .................................................................... 362
NEW-CHARTS Cumulative Flows by Client Type - YTD ............................................................................................................................. 364
NEW-CHARTS Historical Risk versus Returns ............................................................................................................................................ 364
NEW-CHARTS Cumulative Flows by Client Type January 2008-Present ............................................................................................... 364
NEW-CHARTS Q Ratio Since 1900 ............................................................................................................................................................. 365
CHARTS Nominal & Real Household Spending Expectations .................................................................................................................... 366
CHARTS Household Spending Expectations by Income Bucket ................................................................................................................ 366
CHARTS A Very Neutral (Highly Unusual) Bull Market ............................................................................................................................... 367
CHARTS Historical Swings in Sentiment ..................................................................................................................................................... 367
CHARTS Investors Intelligence Bulls & Bears ............................................................................................................................................. 368
CHARTS A/D Line Diverging from Price, Suggesting Weakening Momentum ........................................................................................... 369
CHARTS Smart Money OEX Open Interest Put/Call Ratio Now Off the Charts! .................................................................................... 369
CHARTS UMich Consumer Sentiment Tumbles Most In 16 Months ........................................................................................................... 370
CHARTS Consumer Comfort Plunges Most In 10 Months .......................................................................................................................... 371
CHARTS Only 16% Think Future Employment Opportunities Will Be Better .............................................................................................. 372
CHARTS Inequality Eventually Leads to Economic Adjustments Often Precipitously ............................................................................. 372
CHARTS - NFIB Small Business Sentiment ................................................................................................................................................... 373
CHARTS - Orange Book .................................................................................................................................................................................. 373
CHARTS Asset Allocation Global Equities ................................................................................................................................................ 374
CHARTS Asset Allocation Global Bonds .................................................................................................................................................. 374
CHARTS Active versus Passive Funds Allocation ....................................................................................................................................... 375
CHARTS Investors Intelligence Survey of % Bears ..................................................................................................................................... 375
CHARTS Sentiment at Post 2008 Crisis Highs ............................................................................................................................................ 376
CHARTS CNBC Viewership Steadily Falling ............................................................................................................................................... 377
CHARTS Investor Allocation Trends for Stocks, Bonds and Cash .............................................................................................................. 378
CHARTS Uptick in Feds Financial Stress Index Composite ....................................................................................................................... 379
CHARTS Fear Barometer Diverges with VIX, CDS IG Index ...................................................................................................................... 380
CHARTS Extreme Complacency Seen Near End of Cycles ........................................................................................................................ 380
CHARTS Complacency Seen In PE/VIX ....................................................................................................................................................... 381
CHARTS Post Crisis Sentiment Profile Shows a Clear Ending Pattern ...................................................................................................... 381

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CHARTS Smart Money Flows ...................................................................................................................................................................... 382


CHARTS Fed Assets versus Bullish Sentiment ........................................................................................................................................... 382
CHARTS Macro Support Has Technically Broken Down ............................................................................................................................. 383
CHARTS US Surprise Index Setting Up for Downturn ................................................................................................................................. 383
CHARTS The Public No Longer Trusts the Market Feel it is Manipulated and Ineffectively Regulated ............................................... 384
RESEARCH OF NOTE .......................................................................................................................................................................................... 385
NEW-SENTIMENT: Its like someone just flipped the Switch to OFF? ........................................................................................................ 385
NEW-SENTIMENT: Oblivious To Risk - Complacency Still Reigns ............................................................................................................... 389
NEW-SENTIMENT: UMich Consumer Confidence Tumbles to 12-Month Lows with Biggest Miss on Record ............................................. 393
NEW-SENTIMENT: Elderly Americans' Confidence Collapses To 11-Month Lows (As Middle-Aged Hope Surges) ................................... 394
NEW-SENTIMENT: Post Q2 Quadruple Witch - Institutional Money Changing Direction ............................................................................. 396
NEW-SENTIMENT: The Worst Time In History To Be Invested In Stocks ..................................................................................................... 400
SENTIMENT: This Wasn't Supposed To Happen: Household Spending Expectations Crash ...................................................................... 405
SENTIMENT: Something's Happened To Investor Sentiment Since The Financial Crisis............................................................................. 406
SENTIMENT: The "Smart Money" Has Never Been More Bearish ................................................................................................................ 408
SENTIMENT: US Economic Confidence Crashes Most Since July to Lowest Since December ................................................................... 411
SENTIMENT: We Are All Bulls Now ................................................................................................................................................................ 413
SENTIMENT: No More Greater Fools: Retail Traders Are "Pretty Fully Invested" In Stocks, TD CEO Says ................................................ 414
SENTIMENT: One Heckuva Bull Market but Momentum Weakening! ........................................................................................................... 415
SENTIMENT: Small Business Confidence is a Major Problem in America .................................................................................................... 417
SENTIMENT: Americas Crisis of Trust ........................................................................................................................................................... 419
SENTIMENT: "Everything Is Awesome" American Consumers Are The Happiest In 11 Years .................................................................... 420
SENTIMENT: For CNBC, 2014 Was The Worst Year. Ever. .......................................................................................................................... 421
SENTIMENT: An Astounding Number Of Americans Aren't Investing A Cent ............................................................................................... 423
SENTIMENT: US Households to Withdraw $430 Billion From Stocks In 2014 .............................................................................................. 428
SENTIMENT: Elliott Wave's View from the Top .............................................................................................................................................. 431
SITUATIONAL SUMMARY & ANALYSIS .................................................................................................................................................... 435

INTERMEDIATE TERM RISK ANALYSIS ................................................................................................................................. 439


UPDATED-AGGREGATED GLOBAL FINANCIAL RISK INDEX .......................................................................................................................... 439
NEW-BANKING RISK - LIBOR-OIS SPREAD ................................................................................................................................................ 440
NEW-BANKING RISK - TED SPREAD ........................................................................................................................................................... 440
NEW-CREDIT RISK - GLOBAL CREDIT DEFAULT SWAPS ....................................................................................................................... 441
NEW-CREDIT RISK - EU CREDIT DEFAULT SWAPS .................................................................................................................................. 441
NEW-CONSUMER RISK - HOUSING - RATE OF CHANGE ......................................................................................................................... 442
NEW-ECONOMIC RISK - ECRI LEADING INDEX ......................................................................................................................................... 442
NEW-INFLATION RISK - MONEY SUPPLY GROWTH - M3 ......................................................................................................................... 444
NEW-INFLATION RISK - MONEY VELOCITY ............................................................................................................................................... 444
MONETARY RISK - BANK LIABILITIES ......................................................................................................................................................... 445
NEW-COST OF MONEY RISK - INTEREST RATES .................................................................................................................................... 445
AGGREGATED RISK LEVEL ................................................................................................................................................................................ 446
CHARTS OF NOTE ............................................................................................................................................................................................... 448
NEW-RISK: Only a Few Key Stocks Holding Up the Market .......................................................................................................................... 448
NEW-RISK: Economic Output Composite Failing ........................................................................................................................................... 448
NEW-RISK: 5 Year Cyclically Adjusted P/E Ratio versus S&P Price ............................................................................................................. 449
NEW-RISK: Margin Debt Shrinking ................................................................................................................................................................. 450
NEW-RISK: xxxx.............................................................................................................................................................................................. 450
RISK: Leutholds High/Lpw Logic Index Warns .............................................................................................................................................. 450
RISK: Megaphone Top with Confirming Oscillator .......................................................................................................................................... 451
RISK: We Have Confirmed and Unusual Hindenburg Omens ........................................................................................................................ 452
RISK: It's been a while since we corrected! .................................................................................................................................................... 453
RISK: "Seven Signs" Flash Red ...................................................................................................................................................................... 455
RISK: When these Two Charts Appear Simultaneously, Bad Things Normally Follow!................................................................................. 456
RISK: Well That's Never Happened Before - Exhibit 1 US Macro versus S&P 500 .................................................................................... 456
RISK: Well That's Never Happened Before - Exhibit 2 Long- and Short-end of the Treasury yield curve so anti-correlated. ................... 457
RISK: Well That's Never Happened Before - Exhibit 3 Fed-Fueled, Mal-Investment Boom ....................................................................... 458
RISK: Well That's Never Happened Before - Exhibit 4 Market breadth diverge from performance for such an extended period.............. 459
RISK: Well That's Never Happened Before - Exhibit 5 More trades per second in stocks ......................................................................... 461
RISK: Well That's Never Happened Before - Exhibit 6 The "Smart Money" Has Never Been More Bearish .............................................. 462
RISK: Well That's Never Happened Before - Exhibit 7 Big decoupling in recent weeks between US equity flows and prices ................... 462
RISK: Well That's Never Happened Before - Exhibit 8 Cumulative 3 Mo net flows out of equities, is now the largest on record ............... 463
RISK: World Stocks versus World 2015 GDP Estimate.................................................................................................................................. 465
RISK: World Stocks versus World 2014 & 2015 GDP Estimates ................................................................................................................... 465
RISK: World Stocks versus 10Y UST Yield, WTI Crude 2015 GDP Estimates .............................................................................................. 466
RISK: Fat Tails Have Disproportionately Large Impact on Returns................................................................................................................ 467
RISK: Statistically We Are Due for a Drawdown ............................................................................................................................................. 468
RISK: The Buffett Indicator .............................................................................................................................................................................. 469
RISK: Speculation Has Taken Control of the Markets .................................................................................................................................... 470
RISK: MSCI versus World GDP Divergence - Unsustainable ........................................................................................................................ 470
RISK: High Yield Credit Risk At Elevated Levels ............................................................................................................................................ 470
RISK: Active Hindenburg Omen ...................................................................................................................................................................... 471
RISK: An Over-Levered Hedge Fund Index Ending ABC Consolidation Pattern ........................................................................................... 471
RESEARCH OF NOTE .......................................................................................................................................................................................... 473
NEW- RISK: Expert That Correctly Predicted Market Moves In July, August And September Says Stocks Will Crash In November ......... 473
NEW- RISK: 4 Warnings And Why You Should Pay Attention ....................................................................................................................... 475

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NEW- RISK: According To Bank of America, This Is "The Biggest Risk to Global Equities" ......................................................................... 480
NEW- RISK: The "Smartest Money" Liquidating At a Record Pace: "Selling Everything ............................................................................. 482
NEW- RISK: Top CEO Warns Of Global Reset: "It's In The Cards For Sure... It Could Happen This Year" ................................................. 485
NEW- RISK: $140 Billion Bond Fund Goes To Cash As It "Braces For Bond-Market Collapse" ................................................................... 486
NEW- RISK: "It's Time To Hold Physical Cash", Fidelity Manager Warns Ahead Of "Systemic Event" ........................................................ 489
NEW- RISK: Sweden's Largest Fund Manager Is Quietly Dumping Stocks Before The "Herd" Is Caught In A Selling Vortex .................... 491
RISK: 12 Signs That An Imminent Global Financial Crash Has Become Even More Likely .......................................................................... 492
RISK: World's Largest Sovereign Wealth Fund Is About To Become A Seller .............................................................................................. 493
RISK: When Hindenburg Omens Are Ominous .............................................................................................................................................. 497
RISK: The Canaries Continue To Drop like Flies ............................................................................................................................................ 499
RISK: Deutsche Suggests 'Caution' As "Seven Signs" Flash Red ................................................................................................................. 501
RISK: "The Top's In" David Stockman Warns Of "Epochal Deflation" ............................................................................................................ 502
RISK: When Hindenburg Omens Are Ominous .............................................................................................................................................. 503
RISK: Two Point Three Sigmas Above the Norm ........................................................................................................................................... 505
RISK: No Really, Who is Buying? ................................................................................................................................................................... 513
RISK: Curious Sightings .................................................................................................................................................................................. 514
RISK: Even the BIS Is Shocked At How Broken Markets Have Become ....................................................................................................... 521
RISK: The Line between Rational Speculation and Market Collapse ............................................................................................................. 525
RISK: Global Economy Will Shrink By $2.3 Trillion In 2015 ........................................................................................................................... 530
RISK: Market Action Suggests Abrupt Slowing in Global Economic Activity.................................................................................................. 530
RISK: Warnings Signs Are Everywhere .......................................................................................................................................................... 534
RISK: Hindenburg Signals a Warning ............................................................................................................................................................. 535
RISK: Americans say they're too broke to invest ............................................................................................................................................ 537
RISK: The Biology of Risk ............................................................................................................................................................................... 541
RISK: More Signs Of Bullish Excess ............................................................................................................................................................... 545
RISK: Markets Have Left the "Complacency" Phase, Have Entered Full Blown "Mania" .............................................................................. 547
RISK: VIX Sends Message of Complacency ................................................................................................................................................... 548
RISK: CS Warns Volume & DeMark Raise "Topping Threat" In Stocks ......................................................................................................... 549
RISK: No One Will Ring the Bell at the Top .................................................................................................................................................... 553
Cassandra's - New Additions to the List ................................................................................................................................................................ 560
CASSANDRA: "Severe Correction Or Cyclical Bear" Ahead: Leuthold Major Trend Index Turns Negative ................................................. 561
CASSANDRA: CANARIES - Warnings Everywhere! ...................................................................................................................................... 562
CASSANDRA: Stephen Schork: The Commodity Crash Is "A Canary In The Coal Mine For The Global Economy" ................................... 564
CASSANDRA: Emerging Market Mayhem: Gross Warns Of "Debacle" As Currencies, Bonds Collapse ..................................................... 566
CASSANDRA: "Another Crisis Is Coming": Jamie Dimon Warns Of the Next Market Crash ........................................................................ 573
CASSANDRA: Steen Jakobsen: Get Ready For The Biggest Margin Call In History .................................................................................... 574
CASSANDRA: Wynn Calls "Big" Recovery "Complete Dream" As Gaming Revenues Collapse .................................................................. 576
CASSANDRA: Stan Druckenmiller's "Horrific Sense" Of Deja Vu: "This Will End Very Badly" ..................................................................... 578
CASSANDRA: Hedge Fund Legend Julian Robertson Warns Of A "Complete Explosion" Unless Fed Contains "Boiling, Bubble" ............ 583
CASSANDRA: Kyle Bass Warns "The Fed Is Backed Into A Corner... Equities Are My Biggest Liquidity Worry" ........................................ 584
CASSANDRA: Paul Tudor Jones Warns "Disastrous Market Mania" Will End In "Revolution, Taxes, or War" ............................................ 585
CASSANDRA: John Hussman - A Who's Who Of Awful Times To Invest ..................................................................................................... 587
CASSANDRA: Carl Icahn - One Day You'll See A Break Like A Few Weeks Ago But The Market Won't Come Back ................................ 590
CASSANDRA: Sam Zell Warns Of Stock Market Correction On CNBC ........................................................................................................ 591
CASSANDRA: Billionaire Carl Icahn warns on US stock prices ..................................................................................................................... 591
CASSANDRA: Soros Bets $2 Billion on Stock Market Collapse .................................................................................................................... 592
CASSANDRA: Dont Ignore Janet Yellens Stock Market Warnings 07-21-14 Fiscal Times ......................................................................... 593
CASSANDRA: Doug Kass: We're Heading for a Bear Market So Plan Accordingly ...................................................................................... 596
CASSANDRA: Comstock Funds Weighs In .................................................................................................................................................... 598
CASSANDRA: Michael Lombardi Weighs In ................................................................................................................................................... 600
CASSANDRA: Ron Paul Portfolio, 'Craziest' we've ever seen? ..................................................................................................................... 602
CASSANDRA: John Mauldin Goes Negative .................................................................................................................................................. 603
CASSANDRA: Hayman Capital Dramatically Reduces Risk .......................................................................................................................... 611
CASSANDRA: Byron Wien Warns "Oblivious Markets" Of 20% Correction ................................................................................................... 612
CASSANDRA: Harry Dent Warns Stocks to Sink More than 60% by End of 2014 ........................................................................................ 612
CASSANDRA: Stanley Druckenmiller: "When You Get This Kind Of Rigging, It Will End Badly".................................................................. 613
CASSANDRA: Mohamed El-Erian: "Prices Are Artificially High - Its Time to Take Profits" .......................................................................... 614
CASSANDRA: Felix Zulauf: World Headed Toward 1987 Style Market Collapse .......................................................................................... 615
CASSANDRA: Doug Kass: 'I'm Getting The Summer Of 1987 Feeling' In The Market Right Now ............................................................... 615
CORRELATION & COMPLACENCY A PROBLEM .............................................................................................................................................. 617
EVENT RISK A PROBLEM .................................................................................................................................................................................... 620
Q2 EARNINGS & THE R WORD .............................................................................................................................................................. 620
POLITICAL-ECONOMIC TENSIONS .......................................................................................................................................................... 620
CENTRAL BANK POLICY MISCUES.......................................................................................................................................................... 620
ASIAN ECONOMIC SLOWDOWN SPILLAGE ............................................................................................................................................ 620
PETRO$ CRISIS BREWING IN BRIICS...................................................................................................................................................... 620

LONGER TERM - FUNDAMENTAL ANALYSIS .............................................................................................................................. 621


HIGHLIGHTS ......................................................................................................................................................................................................... 621
ASSET & LIABILITY OWNERSHIP ................................................................................................................................................................. 621
PANIC TOTAL RETURN DISTRIBUTION SINCE 1974 ................................................................................................................................. 621
PANIC CHASE FOR YIELD ............................................................................................................................................................................ 622
REAL S&P MARKET CAP / REAL GDP ......................................................................................................................................................... 622
UNSUSTAINABLE GAP BETWEEN PROFITS AND INCOME ...................................................................................................................... 623
ADJUSTED CORPORATE PROFITS FROM DOMESTIC OPERATIONS .................................................................................................... 623

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TRAILING 10Y 12 MONTH NET MARGINS ................................................................................................................................................... 624


INVESTMENT CLASS PERFORMANCE ....................................................................................................................................................... 625
NEW-VALUATION SUMMARY ....................................................................................................................................................................... 626
VALUATION: Alternative Methodologies ............................................................................................................................................................... 631
NEW-FOUR SET CONSOLIDATED MARKET VALUATION INDICATORS .................................................................................................. 631
NEW-Crestmont from the Arithmetic ............................................................................................................................................................... 635
NEW-Cyclical PE 10 Ratio............................................................................................................................................................................... 640
NEW-Q Ratio ................................................................................................................................................................................................... 647
NEW-S&P Composite Regression-to-the-Trend ............................................................................................................................................. 652
NEW-Reference Methodologies Analysis ....................................................................................................................................................... 654
CHARTS OF NOTE ......................................................................................................................................................................................... 660
VALUATIONS Forward 12-Month P/E Ratio 10 Years.......................................................................................................................... 660
VALUATIONS Forward 12-Month EPS versus Change in Price 10 Years ........................................................................................... 660
VALUATIONS Net Margin Growth ............................................................................................................................................................ 661
VALUATIONS 10 Year Trailing 12 Mo Net Margin Growth Historically High ........................................................................................ 661
VALUATIONS Record Profits Yet Historically Low Capital Asset Growth ............................................................................................... 662
VALUATIONS Historical Ranking of PE Values ....................................................................................................................................... 663
VALUATIONS Median Price/Cash Flow Multiple for US Stocks .............................................................................................................. 664
VALUATIONS Median Price/Earnings Multiple for US Stocks ................................................................................................................. 665
VALUATIONS Median Price to Book Multiple for US Stocks ................................................................................................................... 666
VALUATIONS Price/Book; Price/Cash flow; Price/Sales ......................................................................................................................... 667
VALUATIONS Global Equities Reported PE, PE before XO & Fwd PE ............................................................................................... 668
YE EARNINGS 2015 Forecasts.......................................................................................................................................................................... 669
CHARTS OF NOTE ......................................................................................................................................................................................... 669
2015 EARNINGS 2015 & 2016 Annual Earnings EPS Estimate v Historical........................................................................................... 669
2015 EARNINGS Q3 Earnings Estimate Revisions v Change in Price ................................................................................................... 670
2015 EARNINGS Consumer Staples & Discretionary are sending a Pretty Clear ( Worsening Since Q1) Message ............................ 671
2015 EARNINGS Consensus Long-Term Growth versus Forward PE ................................................................................................... 672
2015 EARNINGS Consensus Analysts Estimates 1979-1995 ............................................................................................................. 673
2015 EARNINGS Consensus Analysts Estimates 1995-2014 ............................................................................................................. 673
2015 EARNINGS CY 2015 Earnings Growth ........................................................................................................................................... 674
2015 EARNINGS CY 2015 Revenue Growth ........................................................................................................................................... 674
2015 EARNINGS Q2 Forward 12 Mo EPS versus Change in Price ..................................................................................................... 675
2015 EARNINGS Q1 Forward 12 PE Ratio ........................................................................................................................................... 676
RESEARCH OF NOTE .................................................................................................................................................................................... 677
2015 EARNINGS Q1 Earnings Guidance: Negative Guidance (84%) Above Average ........................................................................... 677
Q3 EARNINGS Earnings Now Surfacing as a Problem ..................................................................................................................................... 678
CHARTS OF NOTE ......................................................................................................................................................................................... 678
NEW-Q3 EARNINGS Biggest Drop in Profits Since 2009 ....................................................................................................................... 678
NEW-Q3 EARNINGS Negative Sales Surprise Ran Significantly Higher than Average ......................................................................... 678
NEW-Q3 EARNINGS Y-o-Y Change in Quarterly Earnings and Revenue for S&P 500 ......................................................................... 679
NEW-Q3 EARNINGS Forward Earnings being Brought Down Rapidly ................................................................................................... 679
NEW-Q3 EARNINGS # S&P 500 Companies Citing Negative Q3 Impacts - Reasons ........................................................................... 680
NEW-Q3 EARNINGS Q4 15 Estimated Earnings Growth Rate .............................................................................................................. 680
NEW-Q3 EARNINGS Revenue & Earnings Consensus Estimated Growth Rate .................................................................................. 681
NEW-Q3 EARNINGS Q3 EPS Expected to Fall -4.5% According to Factset .......................................................................................... 682
NEW-Q3 EARNINGS S&P 500 Average Earnings Growth Y-o-Y Not a Good Pattern ........................................................................ 682
NEW-Q3 EARNINGS Revenue Recession and Flat EPS Consensus .................................................................................................... 683
NEW-Q3 EARNINGS Forward EPS Consensus Matches Manufacturing Surveys Declines ................................................................. 683
NEW-Q3 EARNINGS Q3 Earnings Growth (Decline): Ex-BAC ............................................................................................................... 684
NEW-Q3 EARNINGS IT Sector Q3 Earnings Forecast to be Down -5.9% Without Apple (-0.4% With) ................................................. 684
NEW-Q3 EARNINGS A Good Sign that Goldman Must Be Selling? ....................................................................................................... 685
NEW-Q3 EARNINGS It Should Be Expected that Earnings Will Begin to fall ......................................................................................... 685
RESEARCH OF NOTE .................................................................................................................................................................................... 686
NEW-Q3 EARNINGS The Most Important Earnings Report You Should Know About ........................................................................... 686
NEW-Q3 EARNINGS Q3 Earnings -Where We Stand - 4 Main Themes From Calls .............................................................................. 688
NEW-Q3 EARNINGS Goldman's 4 Word Summary Of Q3 Earnings Season- -Adequate Earnings, Dismal Sales ............................... 696
NEW-Q3 EARNINGS Do You See What Happens, Alcoa, When Your "Restructuring" Non-GAAP Add-backs Tumble ....................... 701
NEW-Q3 EARNINGS Q3 Earnings Bloodbath-Terrible Monsanto Results- Company Fires 2,600 - ...................................................... 702
NEW-Q3 EARNINGS Wall Street is preparing for the worst earnings season since 2009 ................................................................... 704
NEW-Q3 EARNINGS The Truth About S&P 500 Earnings: No Growth For 7 Quarters, With A Revenue Recession On Top .............. 708
Q2 EARNINGS Reported Results....................................................................................................................................................................... 709
CHARTS OF NOTE ......................................................................................................................................................................................... 709
Q2 EARNINGS Q2 Earnings Growth by Sector ....................................................................................................................................... 709
Q2 EARNINGS Q2 Revenue Growth by Sector ....................................................................................................................................... 709
Q2 EARNINGS Q2 Earnings Growth by Sector - Estimates .................................................................................................................... 710
Q2 EARNINGS Q2 Revenue Growth by Sector Estimates ................................................................................................................... 710
RESEARCH OF NOTE .................................................................................................................................................................................... 712
Q2 EARNINGS Q2 Summary ................................................................................................................................................................... 712
Q2 EARNINGS Percentage of Companies Beating Revenue Estimates (52%) is Below 5 Year Average ............................................. 713
Q2 EARNINGS Forward Earnings, Revenue and Margins ...................................................................................................................... 714
Q2 EARNINGS First Decline in Earnings (-1.3%) Since Q3 2012 (-1.06%) ............................................................................................ 715
Q2 EARNINGS First Back-to-Back Declines in Revenue Since Q2 2009 and Q3 2009 ......................................................................... 716
Q1 EARNINGS Reported Results....................................................................................................................................................................... 717
CHARTS OF NOTE ......................................................................................................................................................................................... 717

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general@GordonTLong.com

Q1 EARNINGS Q1 Earnings Growth by Sector ....................................................................................................................................... 717


Q1 EARNINGS Q1 Revenue Growth by Sector ....................................................................................................................................... 717
Q1 EARNINGS Q1 Earnings Growth by Sector - Estimates .................................................................................................................... 718
Q1 EARNINGS Q1 Reveue Growth by Sector - Estimates ...................................................................................................................... 718
RESEARCH OF NOTE .................................................................................................................................................................................... 719
Q1 EARNINGS Q1 Summary ................................................................................................................................................................... 719
Q1 EARNINGS Fewer Companies Beating Estimates and Sales Estimates Than Average .................................................................. 719
Q1 EARNINGS Forward Earnings, Revenue and Margins ...................................................................................................................... 721
Q1 EARNINGS First Decline in Earnings (-0.4%) Since Q3 2012 (-1.06%) ............................................................................................ 722
Q1 EARNINGS First Decline in Revenues (-2.6%) Since Q3 2012 (-11.5%) .......................................................................................... 723
BUYBACKS Widening Credit Spreads Become A Problem ............................................................................................................................... 724
CHARTS OF NOTE ......................................................................................................................................................................................... 724
NEW-BUYBACKS Outperformance of Stocks with Large Buybacks Programs vs S&P 500 .................................................................. 724
NEW-BUYBACKS Gross Leverage for Typical IG/HY Non-Financial Debt-EBITDA............................................................................ 724
NEW-BUYBACKS Equity Market Performance v S&P 500 Uses of Cash ............................................................................................... 725
NEW-BUYBACKS Default Rate v Net Equity Buybacks .......................................................................................................................... 725
NEW-BUYBACKS S&P 500 Buyback Index 200 DMA ......................................................................................................................... 726
NEW-BUYBACKS S&P 500 v Buyback Index Performance .................................................................................................................... 726
NEW-BUYBACKS S&P 500 Annualized Share Buybacks, Dividends and Earnings .............................................................................. 727
NEW-BUYBACKS The real reason for the slowdown has to do with the spread on investment grade debt .......................................... 727
NEW-BUYBACKS Falling Investment Grade Spreads Hurting Buybacks ............................................................................................... 728
NEW-BUYBACKS Quarterly Share Repurchases & No. of Companies Repurchasing Shares Slows ................................................... 728
NEW-BUYBACKS Dollar-Value Buybacks to Free Cash Flow Trailing Twelve Month Basis ............................................................... 728
NEW-BUYBACKS Nearly 25% of Annual Buybacks Occur in November & December .......................................................................... 729
RESEARCH OF NOTE .................................................................................................................................................................................... 731
NEW-BUYBACKS The Fly In The Buyback Ointment- Corporate Leverage Is At Record Levels .......................................................... 731
NEW-BUYBACKS Why The Stock Buyback Party Is Ending .................................................................................................................. 735
NEW-BUYBACKS Goldman Finds Buybacks No Longer Work To Boost Stock Prices: Two Reasons Why ......................................... 737
NEW-BUYBACKS Why Stocks Are Sliding: For The First Time Since 2009 Spending On Buybacks Surpasses Free Cash Flow ....... 740
NEW-BUYBACKS When Buybacks Fail... ................................................................................................................................................ 744
NEW-BUYBACKS "Risky Business": Companies Are Now Funding Share Buybacks By Selling Bonds To Other Companies ............ 745
NEW-BUYBACKS 94% of total S&P in 2015 will go back to shareholders, as dividends and buybacks................................................ 748
NEW-BUYBACKS CEO Pay Boosted from Giving Shareholders Cash .................................................................................................. 749
NEW-BUYBACKS Investor-CEO Feedback Loop .................................................................................................................................... 750
NEW-BUYBACKS Buybacks Account for Substantial Share of Corporate Profits .................................................................................. 751
NEW-BUYBACKS Quarterly History of Buyback Announcments ............................................................................................................ 751
NEW-BUYBACKS Buybacks as a Percentage of Total Cash Use at the Highest Level Since 2007 ...................................................... 752
NEW-BUYBACKS Weekly Buybacks and Rolling 3 Month Sum ............................................................................................................. 752
NEW-BUYBACKS What Sustained Buybacks Look Like To Rating Agencies IBM Example .............................................................. 753
NEW-BUYBACKS Dollar Volume of Share Buybacks and Dividends at Record Levels ......................................................................... 753
NEW-BUYBACKS Buybacks & Dividends Hurdle $900B in 2014 ........................................................................................................... 753
NEW-BUYBACKS The Growth of Stock Buybacks .................................................................................................................................. 754
NEW-BUYBACKS Buybacks & Dividends as a Percentage of Operating Earnings ................................................................................ 754
NEW-BUYBACKS Executive Compensation Structure ............................................................................................................................ 755
BUYBACKS During 2014 virtually 100% of S&P 500s reported profits of $1T were disgorged as shareholder distributions ................ 756
BUYBACKS 2015 US Equity Flows Forecast ........................................................................................................................................... 756
BUYBACKS Announced Gross Share Buybacks ..................................................................................................................................... 757
BUYBACKS Global IPO /Secondary Offerings versus Announced Gross Share Buybacks ................................................................... 757
BUYBACKS Actual Net Share Buybacks ................................................................................................................................................. 758
BUYBACKS US IPOs-Actual Buybacks and LBO .................................................................................................................................... 758
BUYBACKS Cash to Stockholders Exceeds 90% of Profits .................................................................................................................... 759
BUYBACKS Stock Repurchases Surge 30% in Q3 ................................................................................................................................. 759
BUYBACKS Stock Repurchases 2nd Highest on Record at $145B.......................................................................................................... 759
BUYBACKS 2914 YTD Stock Repurchases By Corporation 20 Corporations Over $4B ..................................................................... 760
BUYBACKS Operating EPS With / Without Buybacks ............................................................................................................................. 760
BUYBACKS Sales & Revenue Doesnt Support Reported EPS Due to Buyback Distortion ................................................................... 761
BUYBACKS S&P 500 Buyback Index versus S&P 500 ........................................................................................................................... 762
BUYBACKS The New S&P 500 Buyback Index TR ................................................................................................................................. 762
BUYBACKS The New S&P 500 Buyback Index Since Start of QE ......................................................................................................... 763
BUYBACKS IBM Total Debt to Equity (to Fund Buybacks) ..................................................................................................................... 763
BUYBACKS IBM Debt Issuance v Buybacks ........................................................................................................................................... 764
BUYBACKS Global FDI into Finance versus Productive Assets ............................................................................................................. 765
BUYBACKS Total Corporate Debt 35% Higher than 2008 Peak Used for Buybacks .......................................................................... 765
BUYBACKS Buyback Bonanza ................................................................................................................................................................ 766
BUYBACKS Buybacks Have Made a 1% Earnings Growth Distortion to Median S&P 500 Company ................................................... 766
BUYBACKS Top 10 Buyback Companies ................................................................................................................................................ 767
BUYBACKS Intel Buybacks ...................................................................................................................................................................... 767
BUYBACKS Shares Outstanding Back at 2000 Level ............................................................................................................................. 768
BUYBACKS Largest Volumes of Buybacks by US Listed Corporation in Last Year ............................................................................... 768
BUYBACKS Corporations Are No Longer Investing But Rather Financial Engineering Stock Prices ..................................................... 769
BUYBACKS Q2 Drop-Off Closer to Normal .......................................................................................................................................... 770
BUYBACKS Borrowing to Buy back Shares ............................................................................................................................................. 770
BUYBACKS Cyclical Nature of Buybacks Evident ................................................................................................................................... 770
BUYBACKS Major Q2 Repurchases ........................................................................................................................................................ 771
BUYBACKS Major Q1 Repurchases ........................................................................................................................................................ 771
BUYBACKS Quarterly Repurchase & Buyback Yield ............................................................................................................................... 772

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BUYBACKS US Corporate Cash versus Buybacks .................................................................................................................................. 773


BUYBACKS Net Debt/EBITDA of American Non-Financial Corporations ............................................................................................... 773
BUYBACKS Stock Buybacks To Grind To A Halt Following Massive Credit Fund Outflows, "Bond Carnage" ....................................... 774
BUYBACKS"The End Of The Road" - Debt-Funded Buyback Boosts Are Finite ..................................................................................... 776
BUYBACKS Why There Is No Growth: The Entire S&P 500 Free Cash Flow Is Going Back To Shareholders ...................................... 779
BUYBACKS Do Share Buybacks Create Value? (Spoiler Alert: No) ........................................................................................................ 780
BUYBACKS Surprise! CEOs Are Getting Rich by Buying Back Stock ..................................................................................................... 782
BUYBACKSThe End of Buybacks? Goldman Warns Political Pressure On Share Repurchases Is Rising ............................................ 787
BUYBACKSCorporate Buybacks: Connecting the Dots to the F-Word .................................................................................................... 789
BUYBACKS Capex Recovery Is Worst In History, BoAML Says .............................................................................................................. 794
BUYBACKS Stock Buybacks Move to the "Terminal" Next Stage ............................................................................................................ 797
BUYBACKSOne Heckuva Bull Market ...................................................................................................................................................... 799
BUYBACKS - The US Equity Bubble Depends On Corporate Buybacks; Here's the Proof ....................................................................... 800
BUYBACKS - Why Markets Are Manic - The Fed Is Addicted To the "Easy Button" ................................................................................. 804
BUYBACKS - When $140 Billion In Buybacks Isn't Enough... .................................................................................................................... 806
BUYBACKS - "Obsessive" Buybacks Could Be Big Mistake, "Serious" People Tell Unserious People .................................................... 806
BUYBACKS - Q3 Buybacks Surging, These Are The Top 20 Repurchasers Of Their Own Stock ............................................................ 810
BUYBACKS - Accounting Magic .................................................................................................................................................................. 812
BUYBACKS - The largest source of overall US equity demand in recent years......................................................................................... 814
BUYBACKS - Has Boosted Median Earnings Growth by 100 bps for S&P 500 ......................................................................................... 817
BUYBACKS - Companies Spend Almost All Profits On Buybacks ............................................................................................................. 822
BUYBACKS - Buyback At Biggest Pace Since 2007 .................................................................................................................................. 827
BUYBACKS - Buyback Party Slowing ......................................................................................................................................................... 829
BUYBACKS - Buyback Party Slowing ......................................................................................................................................................... 834
THE $2T TAX RUSE Its a Free Ride for US Corporations ......................................................................................................................... 839
UNPRECEDENTED BUYBACKS LEVELS ................................................................................................................................................. 839
A FREE TAX RIDE....................................................................................................................................................................................... 841
GENERIC TAX EXAMPLE ........................................................................................................................................................................... 841
CHARTS OF NOTE ............................................................................................................................................................................................... 846
CHARTS Finance the Biggest Source of Corporate Funds rising from 19% to 30% .................................................................................. 846
CHARTS Average Age of Private Fixed Assets ........................................................................................................................................... 847
CHARTS Percent of Families With Business Equity .................................................................................................................................... 847
CHARTS Percent of Families With Business Equity .................................................................................................................................... 848
CHARTS New England Patriots NFL Franchise Valuation ......................................................................................................................... 849
CHARTS US Equity Market is Not Outgrowing the Economy AS Measured by the Coincident Indicator .................................................. 850
CHARTS Deviation of Earnings Above / Below Long Term Growth Trend ................................................................................................. 851
CHARTS S&P 500, Moodys Baa Corporate & 30Y UST Yields ................................................................................................................. 851
CHARTS Corporations Carrying Higher Levels of Leverage than a Few Years Ago .................................................................................. 852
CHARTS US Corporate CFROI (Cash Flow ROI) ....................................................................................................................................... 853
CHARTS Weakening Sector Retunrs ........................................................................................................................................................... 853
CHARTS SPX, Corporate Profits versus Employed Population % .............................................................................................................. 854
CHARTS Executive Incentives Distort Earnings .......................................................................................................................................... 854
CAPITALIZATION Market Capitalization as a % of Nominal GDP .............................................................................................................. 855
CAPITALIZATION Market Capitalization Adjusted by Gold and CPI ........................................................................................................... 856
CAPITALIZATION Market Capitalization versus Total Federal Reserve Assets ......................................................................................... 857
CAPITALIZATION Total Market Capitalization versus M2 ........................................................................................................................... 858
CAPITALIZATION Total Market Capitalization versus Monetary Base ....................................................................................................... 859
CAPITALIZATION Total Market Capitalization versus Gross Federal Debt ................................................................................................ 860
CAPITALIZATION Market Capitalization Ratios .......................................................................................................................................... 861
CAPITALIZATION Regional Corporate Loss Comparisons Problems in Japan....................................................................................... 861
CHARTS 7 Year Total Return Cycle ............................................................................................................................................................ 862
CHARTS Profit Margins Shrink as Proportion of GDP ................................................................................................................................. 862
CHARTS Q1 Earnings Pre-Announcements ................................................................................................................................................ 863
CHARTS Q1 Earnings Taken Down Dramatically ....................................................................................................................................... 863
CHARTS Q1 Earnings Already Taken Down By 5% since January ............................................................................................................ 864
CHARTS Positive & Negative Q1 Pre-Announcements .............................................................................................................................. 864
CHARTS Q1 Revenue Slippage in Last 60 Days ........................................................................................................................................ 865
CHARTS Forward 12 Month EPS vs Price: 10-Year ................................................................................................................................... 866
CHARTS Forward 12 Month EPS vs Price: 10-Year ................................................................................................................................... 866
RESEARCH OF NOTE .......................................................................................................................................................................................... 868
FUNDAMENTALS A Bad Equilibrium & How Speculative Distortion Ends ................................................................................................. 868
FUNDAMENTALS Valuations ...................................................................................................................................................................... 876
FUNDAMENTALS Corporate Profits Vaporizing .......................................................................................................................................... 881
FUNDAMENTALS Fundamentals No Longer Currently Matter - Proof ....................................................................................................... 885
FUNDAMENTALS Profit Margins - Is the Ladder Starting to Snap? ........................................................................................................... 886
FUNDAMENTALS The Great PE Multiple Expansion of 2011-2014 ........................................................................................................... 893
FUNDAMENTALS Stocks Have Never Been More Expensive Based On Long-Term Growth Forecasts .................................................. 897
FUNDAMENTALS Long Term Return Trends ............................................................................................................................................. 899
FUNDAMENTALS Profit Margins Contract as a Percentage of GDP .......................................................................................................... 901
FUNDAMENTALS Stagnant Wages a Major Contributor to Profits ............................................................................................................. 903
FUNDAMENTALS Worsening risk/reward fundamentals in US corporate credit ........................................................................................ 905

TARGETS ................................................................................................................................................................................ 909


CONCLUSIONS....................................................................................................................................................................... 913
MARKET MESSAGE ............................................................................................................................................................................................. 913

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I DEFINING CHARTS ......................................................................................................................................................................................... 925


Defining Chart #3 - The Big M and Super Cycle b ..................................................................................................................................... 926
Defining Chart #4 Intermediate Term Topping Process ............................................................................................................................... 928
The Bottom Line............................................................................................................................................................................................... 931
II TARGETS ........................................................................................................................................................................................................ 934
III QUARTERLY SENTIMENT RISK AND FUNDAMENTALS ........................................................................................................................... 938
NEW-SENTIMENT .......................................................................................................................................................................................... 938
NEW-RISK ANALYSIS - Complacency .......................................................................................................................................................... 943
NEW-FUNDAMENTAL ANALYSIS Valuation Summary.............................................................................................................................. 943
IV STUDIES ........................................................................................................................................................................................................ 945
Q3 EARNINGS Earnings Now Surfacing as a Problem ..................................................................................................................................... 945
STUDY: Q3 EARNINGS - ...................................................................................................................................................................................... 945
CHARTS OF NOTE ......................................................................................................................................................................................... 945
NEW-Q3 EARNINGS Biggest Drop in Profits Since 2009 ....................................................................................................................... 945
NEW-Q3 EARNINGS Negative Sales Surprise Ran Significantly Higher than Average ......................................................................... 945
NEW-Q3 EARNINGS Y-o-Y Change in Quarterly Earnings and Revenue for S&P 500 ......................................................................... 946
NEW-Q3 EARNINGS Forward Earnings being Brought Down Rapidly ................................................................................................... 946
NEW-Q3 EARNINGS # S&P 500 Companies Citing Negative Q3 Impacts - Reasons ........................................................................... 947
NEW-Q3 EARNINGS Q4 15 Estimated Earnings Growth Rate .............................................................................................................. 947
NEW-Q3 EARNINGS Revenue & Earnings Consensus Estimated Growth Rate .................................................................................. 948
BUYBACKS Update ............................................................................................................................................................................................ 948
STUDY: BUYBACKS ............................................................................................................................................................................................. 948
CHARTS OF NOTE ......................................................................................................................................................................................... 949
NEW-BUYBACKS Outperformance of Stocks with Large Buybacks Programs vs S&P 500 .................................................................. 949
NEW-BUYBACKS Gross Leverage for Typical IG/HY Non-Financial Debt-EBITDA............................................................................ 949
NEW-BUYBACKS Equity Market Performance v S&P 500 Uses of Cash ............................................................................................... 950
NEW-BUYBACKS Default Rate v Net Equity Buybacks .......................................................................................................................... 950
NEW-BUYBACKS S&P 500 Buyback Index 200 DMA ......................................................................................................................... 951
NEW-BUYBACKS S&P 500 v Buyback Index Performance .................................................................................................................... 951
NEW-BUYBACKS S&P 500 Annualized Share Buybacks, Dividends and Earnings .............................................................................. 952
WEAKENING BREADTH Market Has Lost Momentum ..................................................................................................................................... 952
NEW-STUDY: WEAKENING BREADTH ............................................................................................................................................................... 952
NEW-CHARTS OF NOTE ............................................................................................................................................................................... 952
NEW-BREADTH Need to Understand FANG and NOSH ................................................................................................................... 952
NEW-BREADTH NYSE Advance-Decline Line versus S&P .................................................................................................................... 953
NEW-BREADTH A month-long bearish divergence for the US 15 most active advance-decline line ..................................................... 953
NEW-BREADTH A-D line preceded or coincided with big breakdowns for the S&P 500 in 2000 and 2007 .......................................... 954
NEW-BREADTH A major bearish divergence for global A-D line in US Dollars ...................................................................................... 954
NEW-BREADTH Goldman Sachs Breadth Index Near Historic Lows ..................................................................................................... 954
V - TRIGGER$ ZONES .......................................................................................................................................................................................... 956
VI - DRIVER$ & BIA$ ............................................................................................................................................................................................. 957

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