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Monthly Market Analytics & Technical Analysis

MARCH 2016 Edition

SECTIONAL REPORT

MATA- MARCH 2016

3/14/2016

1 MARCH 2016 Edition


Copyright 2016 Gordon T. Long All Rights Reserved

Restricted & Confidential


general@GordonTLong.com

Monthly Market Analytics & Technical Analysis


MARCH 2016
HIGHLIGHTS - WHAT YOU NEED TO KNOW ................................................................................................................................. 17
SUMMARY ANALYSIS ............................................................................................................................................................................................ 17
Era of Delusional Distortions & the Super Cycle Pivot b .................................................................................................................................... 32
Defining Chart #1 - "Delusional Distortion" Expectations & the Log-Periodic Cycle ......................................................................................... 34
Defining Chart #2 - Finding the Longer Term Super Cycle Pivot b ................................................................................................................ 35
Defining Chart #3 - The Big M and Super Cycle b ....................................................................................................................................... 36
Defining Chart #4 Intermediate Term Topping Process ................................................................................................................................. 38

OUR APPROACH - MACRO ANALYTICS ...................................................................................................................................... 49


MARCH 2016: Global Macro Drivers ....................................................................................................................................................................... 51
NEW-WEALTH .................................................................................................................................................................................................. 53
UPDATED-HARD ASSETS - Gold ................................................................................................................................................................ 53
UPDATED-HARD ASSETS Silver .............................................................................................................................................................. 56
NEW-UPDATED-HARD ASSETS - Gold;Silver Ratio ................................................................................................................................... 58
UPDATED-HARD ASSETS - Commodities .................................................................................................................................................. 60
UPDATED-NEW-EXCHANGE .......................................................................................................................................................................... 61
CURRENCIES - USD .................................................................................................................................................................................... 61
UPDATED-CURRENCIES - EURO ............................................................................................................................................................... 62
CURRENCIES - YEN ..................................................................................................................................................................................... 64
UPDATED-CARRY TRADE - The : Cross ............................................................................................................................................... 66
UPDATED-CARRY TRADE - The $: Cross ............................................................................................................................................... 69
NEW-YIELD, CREDIT & SPREAD .................................................................................................................................................................... 70
NEW-EQUITIES - Global ................................................................................................................................................................................... 72
CHARTS & RESEARCH OF NOTE .................................................................................................................................................................. 73
CREDIT .......................................................................................................................................................................................................... 73
NEW- CREDIT Current Gauge of US Credit Markets ............................................................................................................................ 74
NEW- CREDIT Credit versus S&P versus Fed Actions .......................................................................................................................... 75
NEW- CREDIT US CLOs Down Significantly ......................................................................................................................................... 75
NEW- CREDIT US CLOs Issuances Falling Off ..................................................................................................................................... 76
NEW- CREDIT Gross Leverage for Typical IG/HY in Debt-to-EBITDA.................................................................................................. 76
CREDIT Leveraged Loans and HY Corporate Bond Yields Point to Lower Equities ............................................................................. 77
CREDIT SP500 Financial Stocks versus UST 2-10s ............................................................................................................................. 78
CREDIT UST 2-10s 2003-2008 versus 2014-Present ......................................................................................................................... 78
CREDIT SP500 Financials (Sub) Credit Risk ......................................................................................................................................... 79
CREDIT US Financials Stocks versus Credit ...................................................................................................................................... 79
CREDIT US Sovereign Credit Risk ......................................................................................................................................................... 80
CREDIT Sector Distress Ratios in US HY (over 1,000bps).................................................................................................................... 81
CREDIT Deep Distress (over 2,000bps) ................................................................................................................................................. 82
CREDIT Number of Distressed Bonds.................................................................................................................................................... 82
CREDIT Leveraged Loan Credit Steadily Falling ................................................................................................................................... 83
CREDIT US High Yield CCC or Below ................................................................................................................................................... 83
CREDIT Credit Index Tranches Slicing & Dicing Credit ...................................................................................................................... 84
CREDIT S&P 500 and US High Yield Spreads (Ex Energy) .................................................................................................................. 85
CREDIT S&P 500 / LSTA US Leveraged Loan 100 Index ..................................................................................................................... 85
CREDIT US High Yield Corporate Bond Default Rate ........................................................................................................................... 86
CREDIT Weak Balance Sheets under Pressure - Concerns about Credit Risk..................................................................................... 86
CREDIT Something Up in the Repo Market? ......................................................................................................................................... 87
CREDIT High Yield Credit 2007 versus Today .................................................................................................................................... 87
CREDIT High Yield Spread the Largest Since June 2012 ..................................................................................................................... 88
CREDIT The spread between BAA and 10-year treasuries is the widest since July 2012 .................................................................... 88
CREDIT The spread between BAA and Industrial Production ............................................................................................................... 88
CREDIT High Yield Spreads to 10Y UST & 10Y Breakeven Inflation .................................................................................................... 89
CREDIT Credit Stress Intensifies US Corporate HY ........................................................................................................................... 90
YIELD ............................................................................................................................................................................................................. 91
NEW-YIELD US Corporate Bond Market - $1T in HY & $4.5T in IG...................................................................................................... 91
NEW-YIELD Negative Interest Rates on 40% Of Outstanding European Government Bonds ............................................................. 91
NEW-YIELD Global Bond Yields ............................................................................................................................................................ 92
NEW-YIELD Less Than ZIRP Global Comparisons ............................................................................................................................... 93
YIELD Flattening UST Yield Curve Moving Towards Inversion .......................................................................................................... 93
YIELD US Financials Subordinated Bonds .......................................................................................................................................... 94
YIELD Global Bond Yields ...................................................................................................................................................................... 94
YIELD HY Spreads by Industry Have Widened Across Industries ...................................................................................................... 95
YIELD Aggregate Treasury Future Net Position ..................................................................................................................................... 95
YIELD 10 UST Yield Technical Breakdown ......................................................................................................................................... 96
YIELD Flattening US Yield Curve -2-10s ................................................................................................................................................ 96
YIELD The Smart Money Has Never Been This Long the Long Bond ................................................................................................... 97
YIELD Goldman Joins Chorus Warning on Bank Market Liquidity ......................................................................................................... 97
YIELD Change In Trend May Be About Concerns With Credit & Cash Flows ....................................................................................... 97
YIELD Expect 1.00% Yield on 10Y UST ................................................................................................................................................. 98
YIELD Primary Dealer: Investment Grade Net Positions ....................................................................................................................... 98

MARCH 2016 Edition


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YIELD Primary Dealers: Junk Bond Net Positions ................................................................................................................................. 99


YIELD 10Y EU Country Government Bond Yields ............................................................................................................................... 100
YIELD UST Note Yields Fall the Most Since 2009 after the Fed Goes On Hold ................................................................................. 100
YIELD German & US 10Y Bonds Fall Dramatically In Yield Trend is Now Down ............................................................................. 100
CURRENCIES ............................................................................................................................................................................................. 102
CURRENCIES Retreating USD Index .................................................................................................................................................. 102
CURRENCIES Stunning is the collapse in the USDJPY since Kuroda unleashed NIRP .................................................................... 102
CURRENCIES Energy Currencies versus USD and Oil Price ............................................................................................................. 103
CURRENCIES EURUSD continues to weaken as Draghi reinforces the ECB's dovish stance .......................................................... 103
CURRENCIES Strong USD a Driver of Falling Commodities, Falling Energy and EM Problems ....................................................... 104
CURRENCIES It is Still About the Japanese Carry Trade But Concerns Growing ........................................................................... 105
CURRENCIES Everyone Is Probably Wrong About the US Dollar ...................................................................................................... 105
COMMODITIES ........................................................................................................................................................................................... 109
NEW-COMMODITIES YTD Commodity Result Comparisons ............................................................................................................. 109
COMMODITIES WTI- Log Scale of Price and Percentage Change..................................................................................................... 109
COMMODITIES Real Oil and Average Oil Price Since 1861 ............................................................................................................... 109
COMMODITIES Copper Falls To Fresh 6 Years Low After $GS Says Metal "Poised To Move Even Lower" .................................... 111
COMMODITIES Algos Locked into WTI Crude & Alternatively the USDJPY ...................................................................................... 112
COMMODITIES Why commodities are dying the death of 1,000 cuts ................................................................................................. 112
COMMODITIES The Weak Trend In EM currencies and Commodities Isnt Abating .......................................................................... 113
COMMODITIES How Saudi Arabia Sets the Global (Currency) Markets ............................................................................................ 114
INFLATION .................................................................................................................................................................................................. 118
INFLATION Probability of March Fed Rate Hike = Zero = Weak Inflation ........................................................................................... 118
INFLATION March Rate Hike Odds Falling Rapidly ............................................................................................................................. 119
INFLATION Expected Inflation- One Year and Three Years Ahead .................................................................................................... 119
INFLATION Inflation Expectations & Relative Performance................................................................................................................. 119
INFLATION US CPI 1958 2015 Annual Percentage Change ........................................................................................................ 121
INFLATION The Rise of Deflation ......................................................................................................................................................... 122
INFLATION World Inflation Falls To 59-Month Low ..................................................................................................................... 122
PRECIOUS METALS ................................................................................................................................................................................... 124
NEW- PRECIOUS METALS HARD ASSETS - Classic Ending Diagonal in Gold ............................................................................... 124
NEW- PRECIOUS METALS HARD ASSETS - Gold;Silver Ratio Long Term .................................................................................. 125
NEW- PRECIOUS METALS HARD ASSETS - Gold;Silver Ratio Intermediate Term Term-1 ......................................................... 125
NEW- PRECIOUS METALS HARD ASSETS - Gold;Silver Ratio Intermediate Term Term-2 ......................................................... 126
PRECIOUS METALS Gold Breaking Out Deutsche Bank Driven? ................................................................................................... 126
PRECIOUS METALS Gold Breaks Out At Exactly Year Beginning? ................................................................................................... 126
PRECIOUS METALS Barrels of Oil per Ounce of Gold ....................................................................................................................... 127
PRECIOUS METALS Gold-Oil Ratio .................................................................................................................................................... 127
PRECIOUS METALS Gold Breakout Percentage Move Comparable to 2008 Financial Crisis .......................................................... 129
PRECIOUS METALS Long Term Perspective of YB Gold Breakout ................................................................................................... 129
PRECIOUS METALS Gold demand in Asia hit by weak local currencies; Indian prices at discount .................................................. 130
PRECIOUS METALS Gold Tracked US Debt Until Recently Will Likely Re-Establish Long Term Pattern .................................. 131
RISK: Risk-On versus Risk-Off .............................................................................................................................................................................. 132
CHARTS OF NOTE ......................................................................................................................................................................................... 133
NEW-RISK Nasdaq risk is dramatically higher than S&P risk .................................................................................................................. 133
NEW-RISK Draghis ECB Announcement Triggers Bull Reversal To Evercore ...................................................................................... 134
NEW-RISK High Probability US Recession in 2016 ................................................................................................................................. 135
NEW-RISK Price-to-Sales Presently Second Highest to the Dotcom Bubble Collapse .......................................................................... 135
NEW-RISK Industrial Production Is Rolling Over ..................................................................................................................................... 136
NEW-RISK NYSE Margin Debt at Record Levels .................................................................................................................................... 137
NEW-RISK Margin Debt to GDP Higher then 2000 and 2007 ................................................................................................................. 138
NEW-RISK Margin Debt to GDP and 3-Year Stock Returns ................................................................................................................... 139
NEW-RISK Margin Debt to GDP and 3-Year Stock Returns ................................................................................................................... 140
NEW-RISK Investors Sell Dividend Funds, MLPs, REITs and High Yield ............................................................................................... 141
NEW-RISK Bull to Bear Ratio Unprecedented Optimism ..................................................................................................................... 142
NEW-RISK Turmoil in High Yield Bonds .................................................................................................................................................. 143
RISK New Global Risk US Growth European Financial Conditions ................................................................................................... 144
RISK Leveraged Loans and HY Corporate Bond Yields Warn of Possible SPX of 1100 ........................................................................ 144
RISK Global Financial Risk ....................................................................................................................................................................... 145
RISK US Financials Stocks versus Credit ............................................................................................................................................. 145
RISK Something Is Seriously Wrong Somewhere in Deutsche Bank 5Y Sub CDS ............................................................................. 146
RISK Something Is Seriously Wrong Somewhere in Deutsche Bank Lehman Comparison ................................................................ 146
RISK Something Is Seriously Wrong Somewhere in Deutsche Bank Ending Diagonal Goes Lower .................................................. 147
RISK Small Cap Stocks versus HY Bond Spread .................................................................................................................................... 147
RISK Net Cash Companies Scarce EBITDA Cash Flow ................................................................................................................... 148
RISK Falling Animal Spirits - Sinking CEO Confidence ........................................................................................................................... 148
RISK Bull-Bear Ratio Collapses ............................................................................................................................................................... 149
RISK SPX Percent off 2009 High ............................................................................................................................................................. 150
RISK SPX Price-Earnings-PE Ratio ......................................................................................................................................................... 150
RISK Stock market more Over-valued than prior to Previous Crashes! .................................................................................................. 151
RISK Coppock Signaling Problems Ahead ............................................................................................................................................... 151
RISK Junk Bond Movements Have Been Dependable Warning Indicators Since Dotcom Bubble Burst ............................................... 152
RISK Corporate Profits and Wages Diverge ............................................................................................................................................ 152
RISK Russell 1000 Equal Weight: Cap-Weight Ratio ........................................................................................................................... 153
RISK Long Term Monthly Reversal Signal ............................................................................................................................................... 153
RISK Markets Historically Fail after Three months of Falling Margin Debt We Have 2 Months ........................................................... 154

MARCH 2016 Edition


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general@GordonTLong.com

RISK Margin Debt Channel is Pretty Clear High Odds of Troubles Ahead........................................................................................... 154
RISK Goldman Joins the Chorus Warning on Bond Market Liquidity ...................................................................................................... 155
RISK So Goes Retail So Goes the US Economy .................................................................................................................................. 155
RISK Consumer Discretionary Sending Signals....................................................................................................................................... 156
RISK Net EBITDA 2x Highest since 2006 % of companies with net cash Lowest since 2006 ................................................................ 158
RISK US Corporate Net Debt Has Exploded & Now Massively Exceeds EBITDA .................................................................................. 158
RISK CBOE Skew Index ........................................................................................................................................................................... 159
RISK Gap Between Uncertainties Priced in the Debt & Equity Markets .................................................................................................. 159
RISK Beware of EPS manipulation........................................................................................................................................................... 160
RISK Total NYSE Short Interest & Monthly Change ................................................................................................................................ 161
RISK Contrasting Post October Market Drawdowns 1973s Slow Pain versus 1987 Crash............................................................... 161
RISK Historical Post-Crash Price Actions 1950 to 2015 ....................................................................................................................... 162
RISK Historical Post-Crash Price Pattern Has Taken an Average of 27 days to Double Bottom ........................................................... 162
RISK Credit Fleeing IG,HY & EM ............................................................................................................................................................. 163
RISK Credit Fleeing IG,HY & EM ............................................................................................................................................................. 163
RISK Margin Debt in NYSE Accounts versus S&P 500 ........................................................................................................................... 164
RISK Credit Risk Increasing ..................................................................................................................................................................... 165
RISK TED Spread Increasing ................................................................................................................................................................... 165
RISK VIX Pricing in Credit Problems ........................................................................................................................................................ 166
RISK Credit Always Leads Markets Its the Life Blood! ...................................................................................................................... 166
RISK The Pattern is Clear QE the Market Driver .................................................................................................................................. 167
RISK Internal deterioration in the market is more consistent with the development of more major bull market peaks ........................ 168
RISK A huge gap has opened up between reality and perceptions ......................................................................................................... 169
RISK Economic Surprise Index lower highs, lower lows and a reluctant bounce ................................................................................. 170
RISK Weekly Equity Outflows ................................................................................................................................................................... 170
RISK Weekly EM Fund Outflows .............................................................................................................................................................. 171
RISK Net Outflows as a % of AUM by Year ............................................................................................................................................. 172
RISK HG Spread Per Point of Equity Volume .......................................................................................................................................... 173
RISK Widening Gap between Debt & Equity ............................................................................................................................................ 173
RISK HY Bond ETF (HYG) versus S&P 500 ............................................................................................................................................ 173
RISK HY Credit versus 2007-2008 Credit Always Leads Equity ........................................................................................................ 174
RISK Leutholds High/Low Logic Index Sending a Clear Signal .............................................................................................................. 175
TECHNO-FUNDAMENTALS ................................................................................................................................................................................. 176
CHARTS OF NOTE ......................................................................................................................................................................................... 176
NEW-CHARTS Cumulative Flows by BoAML Client - January 2008-Present ......................................................................................... 176
NEW-CHARTS 2016 YTD Flows by BoAML Client Type......................................................................................................................... 176
NEW-CHARTS Upside Break of 2010 => 2085, Downside Break => 1963-1931 and 1902-1891 ......................................................... 177
NEW-CHARTS 4 Week MA of Total Net Buys by BoAML Client - January 2008-Present ..................................................................... 178
NEW-CHARTS BoAML Corporate Clients 4 Wk Average Buybacks Y-o-Y % Change .......................................................................... 179
NEW-CHARTS S&P 500 versus Forward EPS ........................................................................................................................................ 180
NEW-CHARTS Clear Signs Of A Market Trying To Roll-Over Against Corporate Buybacks Mysterious Buying ................................... 180
NEW-CHARTS Classic Ending Diagonal In Gold .................................................................................................................................... 182
NEW-CHARTS Value Line Geometric Composite Short Term A 38.2% Retracement ..................................................................... 182
NEW-CHARTS Value Line Geometric Composite Long Term A 38.2% Retracement with 23.6% Bounce ...................................... 183
CHARTS MSCI World Index 7.5 Year Cycle ......................................................................................................................................... 184
CHARTS World Equity Markets Have Now Lost Over $16.8 Trillion ....................................................................................................... 184
CHARTS Global Bear Markets ................................................................................................................................................................. 185
CHARTS Possible Head & Shoulders in Play with a Target of 1600 ....................................................................................................... 186
CHARTS Possible Small Degree Head & Shoulders in Play with a Target of 1725 ................................................................................ 186
CHARTS Possible Corrective A-B-C Near Completion .......................................................................................................................... 187
CHARTS Cumulative Flows By Client Type January 2008-Present ..................................................................................................... 187
CHARTS Total World Index Fund versus Long Term Fund ..................................................................................................................... 188
CHARTS Global DOW Drops To Next Support Level .............................................................................................................................. 188
CHARTS VIM remains negative across the board since mid-Nov. .......................................................................................................... 189
CHARTS A falling VIGOR shows net distribution ..................................................................................................................................... 190
CHARTS The RRG reflects a defensive or risk off market....................................................................................................................... 191
CHARTS The average stock in the developed world is off 23% from its 1-year high .............................................................................. 192
CHARTS The average stock in the developed world is down 8% over the past year ............................................................................. 192
CHARTS 52% of all developed world stocks are in a bear market over the past 200-days .................................................................... 193
CHARTS The average energy company is down an astounding 40% of its 1-year high. ........................................................................ 193
CHARTS The average stock in DM Americas is down 14%in the last year ............................................................................................ 194
CHARTS International and Emerging Market Divergence ....................................................................................................................... 194
CHARTS US versus World Stocks ........................................................................................................................................................... 195
CHARTS S&P 500 With and Without FOMC Meeting Dates ................................................................................................................... 196
CHARTS The Median Stock In The World Is Flat YTD ............................................................................................................................ 197
CHARTS 70% of EM Stocks are Still Down More Than 20% from 200-Day Highs ................................................................................. 197
CHARTS Year End Overhead Resistance to Santa Claus Rally ............................................................................................................. 198
CHARTS Professionals Are Leaving the Party Early ............................................................................................................................... 198
CHARTS NYSE Advance-Decline Line versus S&P ................................................................................................................................ 199
CHARTS A month-long bearish divergence for the US 15 most active advance-decline line ................................................................. 200
CHARTS A-D line preceded or coincided with big breakdowns for the S&P 500 in 2000 and 2007 ....................................................... 200
CHARTS A major bearish divergence for global A-D line in US Dollars .................................................................................................. 201
CHARTS Be Alert to Oversold Pull Back Before Seasonal YE Strength ................................................................................................. 202
CHARTS Leading Indicators Support View The Current Weakness May Turn into a Buying Opportunity ............................................. 203
CHARTS Problem in US Retail Developing ............................................................................................................................................. 204
CHARTS Gold Reacted to Chinese Devaluation ..................................................................................................................................... 205

MARCH 2016 Edition


Copyright 2016 Gordon T. Long All Rights Reserved

Restricted & Confidential


general@GordonTLong.com

CHARTS The DOW Theory & DOW Transports ...................................................................................................................................... 206


CHARTS October- A Month for the History Books ................................................................................................................................... 207
CHARTS The Smart Money Has Never Been This Long the Long Bond ................................................................................................ 208
CHARTS Real S&P 500 Index Cycles with Recessions .......................................................................................................................... 209
CHARTS Quarterly Overbought Cycles ................................................................................................................................................... 209
CHARTS Monetary Velocity Declines as Excess Leverage Weights on Consumption ........................................................................... 209
CHARTS The Real Value of Cash ............................................................................................................................................................ 210
CHARTS Consumer Sentiment versus S&P 500 ..................................................................................................................................... 210
CHARTS Hedgers Net Long Record of S&P 500 Futures ....................................................................................................................... 211
CHARTS Fed Balance Sheet Changes versus S&P 500 ......................................................................................................................... 212
CHARTS S&P Futures versus Relative Volumes ..................................................................................................................................... 212
CHARTS Japanese Buying Foreign Stocks ............................................................................................................................................. 213
CHARTS Monetary Initiatives versus S&P 500 ........................................................................................................................................ 214
CHARTS Bull Trend Line Support ............................................................................................................................................................ 214
CHARTS DOW Industrial 200 WMA Boundary Condition & Trend Direction Change Indicator.............................................................. 215
CHARTS DOW Industrial 200 WMA Boundary Condition & Trend Direction Change Trigger ................................................................ 215
CHARTS Global 150 Equity Index Bounces off Lower Support Channel ................................................................................................ 216
CHARTS Global 150 Equity Index Potential Key Support Levels ......................................................................................................... 216
CHARTS The Rout May Have Just Began According to Some ............................................................................................................... 217
CHARTS The VIX Termination Algo ......................................................................................................................................................... 217

OUTLOOK - ANALYTICAL ANALYSIS .......................................................................................................................................... 219


MARKET BOUNCE A Retracement or Market Turn?......................................................................................................................................... 219
CHARTS OF NOTE ......................................................................................................................................................................................... 219
NEW-BOUNCE Credit and Equity Will Converge. ................................................................................................................................... 219
NEW-BOUNCE Value Line Geometric Composite Short Term A 38.2% Retracement ..................................................................... 220
NEW-BOUNCE Value Line Geometric Composite Long Term A 38.2% Retracement with 23.6% Bounce ..................................... 220
NEW-BOUNCE Bear Market Rally Trend Support Line Is Gone ............................................................................................................. 221
NEW-BOUNCE AAII Investor Sentiment Bears/Bulls Triggered a BUY at the recent market lows ........................................................ 222
NEW-BOUNCE Percent of S&P 500 Stocks above 50 and 200 DMA ..................................................................................................... 222
NEW-BOUNCE NYSE Overbought / Oversold......................................................................................................................................... 223
NEW-BOUNCE Trend Channel Now Down ............................................................................................................................................. 223
NEW-BOUNCE Important Overhead Resistance ..................................................................................................................................... 224
RESEARCH OF NOTE .................................................................................................................................................................................... 225
NEW-BOUNCE Key Equity Index (VLG) Climbs Back Up the Elevator Shaft ......................................................................................... 225
NEW-BOUNCE Is This Whole Rally Just One Big TRAP? ...................................................................................................................... 227
NEW-BOUNCE Famed Short Seller Muddy Waters Says It's Just A "Dead Cat Bounce" ...................................................................... 228
NEW-BOUNCE The "Smart Money" Is Quietly Getting Out Of Dodge: Sells for A Sixth Straight Week ................................................ 229
NEW-BOUNCE JPM's Head Quant Explains Who Unleashed The S&P Rally, And What May Happen Next ....................................... 230
Q1 EARNINGS Earnings Estimate Reductions .................................................................................................................................................. 233
STUDY: Q1 EARNINGS - ...................................................................................................................................................................................... 233
CHARTS OF NOTE ......................................................................................................................................................................................... 233
NEW-Q1 EARNINGS Largest S&P Q1 EPS Drop in first 2 Mo of a Quarter Since Q1 2009 .................................................................. 233
NEW-Q1 EARNINGS S&P 500 Earnings Growth Q1 2016 Down -8.3% ................................................................................................ 233
NEW-Q1 EARNINGS S&P 500 EPS: GAAP vs. Non-GAAP ................................................................................................................... 234
NEW-Q1 EARNINGS S&P 500 EPS: GAAP vs. Non-GAAP for FY 2015 vs. 2014 ................................................................................ 234
NEW-Q1 EARNINGS Non-GAAP EPS Writeoffs ..................................................................................................................................... 235
NEW-Q1 EARNINGS 2015 Y-o-Y % Change in EPS GAAP vs Non-GAAP ........................................................................................... 235
NEW-Q1 EARNINGS S&P Trailing 4-Quarter GAAP vs. Non-GAAP Net Margins ................................................................................. 236
RESEARCH OF NOTE .................................................................................................................................................................................... 236
NEW-Q1 EARNINGS Why Companies Don't Want You To Look At GAAP Earnings ............................................................................ 236
NEW-Q1 EARNINGS Largest Drop in S&P 500 EPS Estimate Over First Two Months of a Quarter since Q1 2009 ............................ 241
NEW-Q1 EARNINGS Non-GAAP Earnings Are About To Plunge The Most Since 2009; As For GAAP Don' Even Ask ...................... 242
BUYBACKS Slowing Due to Debt-Credit Rating Concerns ............................................................................................................................... 248
STUDY: BUYBACKS ............................................................................................................................................................................................. 248
CHARTS OF NOTE ......................................................................................................................................................................................... 248
NEW-BUYBACKS Cost of Buybacks In Increasing .................................................................................................................................. 248
NEW-BUYBACKS BoAML Corporate Clients Buybacks in the First 9 Weeks of Each Year ............................................................... 248
NEW-BUYBACKS BoAML Corporate Clients 4 Wk Average Buybacks Y-o-Y % Change ..................................................................... 249
NEW-BUYBACKS Buybacks Have Accounted for Around 1/3 of EPS Growth Since Q3 2011 .............................................................. 249
BUYBACKS Net Cash Companies Are Increasingly Scarce .................................................................................................................. 250
BUYBACKS EBITDA Growth Is the Worst Since 2000 ............................................................................................................................ 250
BUYBACKS Buybacks v SPX Total Return Indices ................................................................................................................................. 252
BUYBACKS Proof that Buybacks Mainly Funded By Debt ...................................................................................................................... 252
BUYBACKS US Companies Continuing to Borrow To Buyback Stock .................................................................................................... 253
BUYBACKS Debt/EBITDA v FCF-Cost of Debt - 2013 ............................................................................................................................ 253
BUYBACKS Debt/EBITDA v FCF-Cost of Debt 2015 ........................................................................................................................... 254
BUYBACKS Buybacks & Dividends as a Percentage of Net Income ...................................................................................................... 255
BUYBACKS After Historic Buybacks the Y-o-Y Change in 12 Month Profits Per Share Still Shrinks! .................................................... 255
BUYBACKS Buybacks & Dividends as a Percentage of Net Income Against Spending on Buybacks................................................... 256
BUYBACKS Outperformance of Stocks with Large Buybacks Programs vs S&P 500 ............................................................................ 256
BUYBACKS Gross Leverage for Typical IG/HY Non-Financial Debt-EBITDA ..................................................................................... 256
BUYBACKS Equity Market Performance v S&P 500 Uses of Cash ........................................................................................................ 258
BUYBACKS Default Rate v Net Equity Buybacks .................................................................................................................................... 258
BUYBACKS S&P 500 Buyback Index 200 DMA ................................................................................................................................... 259

MARCH 2016 Edition


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Restricted & Confidential


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BUYBACKS S&P 500 v Buyback Index Performance.............................................................................................................................. 259


BUYBACKS S&P 500 Annualized Share Buybacks, Dividends and Earnings ........................................................................................ 260
BUYBACKS Falling Investment Grade Spreads Hurting Buybacks ......................................................................................................... 260
BUYBACKS Quarterly Share Repurchases & No. of Companies Repurchasing Shares Slows ............................................................. 260
BUYBACKS Dollar-Value Buybacks to Free Cash Flow Trailing Twelve Month Basis ........................................................................ 261
BUYBACKS Nearly 25% of Annual Buybacks Occur in November & December .................................................................................... 262
RESEARCH OF NOTE .................................................................................................................................................................................... 263
NEW-BUYBACKS Buybacks Soar ........................................................................................................................................................... 263
NEW-BUYBACKS Buybacks Must Continue: AAPL, IBM Unveil Major Debt Issuance to Fund Shareholder-Friendliness .................... 264
BUYBACKS This Is the Biggest EBITDA Drop Outside Of A Recession Since 2000 .............................................................................. 265
BUYBACKS Stock Buybacks In Jeopardy: Investment Grade Bond Funds See Biggest Outflow In 17 Weeks ...................................... 267
BUYBACKS MacroStrategy Explains Why Most Stocks Have Already "Crossed The Rubicon" ............................................................ 270
BUYBACKS The Cannibalized Corporation- Corporate America is undermining itself. ........................................................................... 275
BUYBACKS The Fly In The Buyback Ointment- Corporate Leverage Is At Record Levels .................................................................... 282
BUYBACKS Why Stocks Are Sliding: For The First Time Since 2009 Spending On Buybacks Surpasses Free Cash Flow ................ 287
BUYBACKS When Buybacks Fail... ......................................................................................................................................................... 291
BUYBACKS "Risky Business": Companies Are Now Funding Share Buybacks By Selling Bonds To Other Companies ...................... 292
GOVERNMENT STOCK BUYING Governments Increasingly Buying the Equity Markets ............................................................................... 296
STUDY: MANIPULATION ...................................................................................................................................................................................... 296
RESEARCH OF NOTE .................................................................................................................................................................................... 296
NEW- MANIPULATION Hungary Central Bank Will Prop up Economy By Boosting Stock Market ........................................................ 296
NEW- MANIPULATION China is getting into the venture capital business in a big way ......................................................................... 297
NEW- MANIPULATION JPMorgan: "The ECB Could Purchase Equities Next" ...................................................................................... 298
US RECESSION RUMBLINGS ............................................................................................................................................................................. 300
CHARTS OF NOTE ......................................................................................................................................................................................... 301
NEW-RECESSION A US Recession is now a VERY Likely Outcome! ................................................................................................... 301
NEW-RECESSION Manufacturing Indicators & Industrial Production In Recession Territory ............................................................... 302
NEW-RECESSION The Real Employment Economic Picture & Recessionary Driver ........................................................................... 302
NEW-RECESSION Inflation Creeping Into Recessionary Statistics ....................................................................................................... 303
NEW-RECESSION 15-month Continuous Y-o-Y drop in Factory orders Historically Has Signaled A Recession for 60 Years ............. 304
NEW-RECESSION Productivity Slows As Recoveries Age (Y-o-Y%) ..................................................................................................... 304
NEW-RECESSION St.Louis Recession Probability ................................................................................................................................. 305
NEW-RECESSION Recession Probability Based on Probit Model ......................................................................................................... 305
NEW-RECESSION Recession Probability The Economic Output Composite Index ............................................................................ 306
NEW-RECESSION Recession Probability HY Spreads Have not Traded at Current Levels Outside a US Recession ...................... 306
NEW-RECESSION Recession Probability Market Sentiment Can Become A Driver of Recessions .................................................. 307
NEW-RECESSION Recession Probability Inflation tends to Rise Into and During a Recession ......................................................... 307
NEW-RECESSION Wholesale Inventories -to - Sales ............................................................................................................................. 308
NEW-RECESSION S&P Trailing 4-Quarter GAAP vs. Non-GAAP Net Margins ..................................................................................... 308
NEW-RECESSION We are already in a US GDP Recession .................................................................................................................. 309
NEW-RECESSION HY Close to 2001 Recession Levels ........................................................................................................................ 309
NEW-RECESSION Industrial Production Is Rolling Over ........................................................................................................................ 310
NEW-RECESSION US Recession Cycle Suggests Economic & Earnings Cycle May Be Close To Ending.......................................... 311
RECESSION US Recession Cycle Suggests Cycle May Be Close To Ending ....................................................................................... 311
RECESSION Current Economic Cycle Is Getting Old In The Tooth ..................................................................................................... 312
RECESSION Average Monthly Job Growth Deteriorating ....................................................................................................................... 312
RECESSION Annual Percent Change In Real GDP ................................................................................................................................ 313
RECESSION US Manufacturing Sector Recession ................................................................................................................................. 313
RECESSION Large Profit Margin Declines Coincides With Recessions ................................................................................................. 314
RECESSION Buybacks Drop on Reduced Free Cash Flow Drop Compared to Previous Recession ................................................. 314
RECESSION Annual % Change in 12Mo Forward EPS Expectations Turn Negative ............................................................................ 315
RECESSION US Recession Estimates Pop ............................................................................................................................................ 315
RECESSION US Recession Indicator & Relative Performance of Stocks & Bonds................................................................................ 316
RECESSION Real S&P 500 Index with Historical Recessions ................................................................................................................ 316
RECESSION September Survey Data versus Non Farm Payrolls .......................................................................................................... 317
RECESSION Regional Surveys for September versus ISM PMI (August) .............................................................................................. 317
RECESSION Regional Manufacturing Surveys versus Forward EPS Estimates .................................................................................... 318
RECESSION Historical Regional Index Comparisons Last Seen in 2008 ............................................................................................ 318
RECESSION Global Oil Consumption Leads Economic Growth Trend is Down Global Headwinds ................................................ 319
RECESSION Gross Domestic Income versus Wilshire 5000 Tells the Story ....................................................................................... 320
RECESSION CT 2015 Revenue Recession ............................................................................................................................................ 320
RECESSION Q2 2015 Revenue Recession ............................................................................................................................................ 321
RECESSION 4 Consecutive months of y/y Spending Declines ............................................................................................................... 321
RECESSION BOA: Retail sales ex-autos, plunged 0.8% mom seasonally adjusted............................................................................ 322
RECESSION Top 10 US Market Areas Signal Retail Problem Underway .............................................................................................. 322
RECESSION Wholesale Inventories to Sales Spiking To Areas Seen During Recession Trends ......................................................... 323
RECESSION Wholesale Inventories Less Wholesale Sales ................................................................................................................... 324
RECESSION Wholesale Inventories vs GDP Trends .............................................................................................................................. 324
RECESSION Auto Inventories to Sales ................................................................................................................................................... 325
RECESSION Falling Collateral and Residuals Undermine Real Growth .............................................................................................. 325
RECESSION Coincident / Lagging Indicator Ratio versus Recessions ................................................................................................... 326
RECESSION Annual Change in Durable Goods Orders v Recessions ................................................................................................... 326
RECESSION Durable Goods v Core-Durable Goods (Ex Defense) versus Recessions ........................................................................ 327
RECESSION Real Gross Domestic Investment versus Recessions ....................................................................................................... 327
RECESSION Total Real Private Fixed Investment as % of Real GDP versus Recessions .................................................................... 328
RECESSION Businesses Operate Against Actual Demand versus Recessions .................................................................................... 328

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RECESSION ISM Composite Index versus Recessions.......................................................................................................................... 329


RECESSION Capacity Utilization versus Industrial Production versus Recessions ............................................................................... 329
RECESSION Retail Sales (NSA) Annual % Chg of 12 Month Average versus Recessions ................................................................... 330
RECESSION Monthly Retail Control Purchases Y-o-Y % Chg versus Recessions........................................................................... 330
RECESSION Major Economic Trends...................................................................................................................................................... 331
RESEARCH OF NOTE .................................................................................................................................................................................... 332
RECESSION Economists are starting to warn about the risk of a new U.S. recession........................................................................... 332
RECESSION Economists Finally Admit, Odds Of A US Recession Are On The Rise ............................................................................ 335
RECESSION Retail Sales Slump on Deck ............................................................................................................................................... 337
RECESSION This Is another "Subprime" Waiting To Blow ..................................................................................................................... 340
RECESSION Record Gap between US Inventories and Sales Screams Recession .............................................................................. 343
RECESSION August spending was the weakest in nominal dollar terms since 2012 ............................................................................. 345
RECESSION The Next Recession Will Definitely Not Happen In 2018 ................................................................................................... 350
SUPPORT & RESISTANCE .................................................................................................................................................................................. 352
Gann Analysis .................................................................................................................................................................................................. 352
Boundary Conditions ....................................................................................................................................................................................... 353
Channels & Regressions ................................................................................................................................................................................. 354
Fibonacci - Controlling Time Extensions ......................................................................................................................................................... 357
Fibonacci - Controlling Price Extensions ......................................................................................................................................................... 362
Elliott Wave ...................................................................................................................................................................................................... 362
The Bottom Line............................................................................................................................................................................................... 365

SHORT TERM SENTIMENT ..................................................................................................................................................... 368


BUSINESS CYCLE - CONSUMER & BUSINESS SENTIMENT ........................................................................................................................... 368
SENTIMENT & CONFIDENCE Shifting Trend ................................................................................................................................................... 368
NEW-SENTIMENT - Consumer, Investor & Trader ............................................................................................................................................... 369
NEW-Consumer Confidence - Conference Board .......................................................................................................................................... 369
NEW-Consumer Sentiment - Michigan ........................................................................................................................................................... 372
NEW-Consumer Comfort - Bloomberg ............................................................................................................................................................ 374
NEW-American Association of Independent Investors ................................................................................................................................... 376
NEW-Investors Intelligence ............................................................................................................................................................................. 376
NEW-National Association of Active Investment Managers (NAAIM) ............................................................................................................ 377
NEW-Small Business Optimism ...................................................................................................................................................................... 378
NEW-Percentage Stocks above 50 & 200 DMA ............................................................................................................................................. 380
NEW-Margin Levels ......................................................................................................................................................................................... 381
Real Margin Debt as % of GDP ....................................................................................................................................................................... 386
Margin Debt versus S&P 500 .......................................................................................................................................................................... 386
Mutual Fund Cash Levels v S&P 500 .............................................................................................................................................................. 387
NEW-OSCILLATORS & BREADTH: Indicators of Importance ............................................................................................................................ 389
NEW-NYSE Overbought / Oversold ................................................................................................................................................................ 389
NEW-OEX Open Interest (Puts/Calls) ............................................................................................................................................................. 390
NEW-TRIN ....................................................................................................................................................................................................... 391
NEW-McClellan Oscillator ............................................................................................................................................................................... 392
CHARTS OF NOTE ............................................................................................................................................................................................... 393
CHARTS Small Business Sentiment Trending Down Strongly .................................................................................................................... 393
CHARTS Small Business Sentiment Margin Squeeze ............................................................................................................................. 393
CHARTS Bloomberg Consumer Comfort versus Nasdaq ........................................................................................................................... 394
CHARTS Goldmans Short Term Sentiment Indicator Shows Low Suggests Near Term Counter Rally Likely ...................................... 395
CHARTS Global Consumer Confidence Begins Reversal from Trend Resistance ..................................................................................... 396
CHARTS US Economic Index Steadily Eroding ........................................................................................................................................... 397
CHARTS UMich Consumer Confidence with Biggest Miss on Record ........................................................................................................ 397
CHARTS Economic Surprise Index lower highs, lower lows and a reluctant bounce .............................................................................. 397
CHARTS Cumulative Flows by Client Type - YTD ....................................................................................................................................... 399
CHARTS Historical Risk versus Returns ...................................................................................................................................................... 399
CHARTS Cumulative Flows by Client Type January 2008-Present ......................................................................................................... 400
CHARTS Q Ratio Since 1900 ....................................................................................................................................................................... 400
CHARTS Nominal & Real Household Spending Expectations .................................................................................................................... 401
CHARTS Household Spending Expectations by Income Bucket ................................................................................................................ 401
CHARTS A Very Neutral (Highly Unusual) Bull Market ............................................................................................................................... 402
CHARTS Historical Swings in Sentiment ..................................................................................................................................................... 402
CHARTS Investors Intelligence Bulls & Bears ............................................................................................................................................. 403
CHARTS A/D Line Diverging from Price, Suggesting Weakening Momentum ........................................................................................... 404
CHARTS Smart Money OEX Open Interest Put/Call Ratio Now Off the Charts! .................................................................................... 404
CHARTS UMich Consumer Sentiment Tumbles Most In 16 Months ........................................................................................................... 405
CHARTS Consumer Comfort Plunges Most In 10 Months .......................................................................................................................... 406
CHARTS Only 16% Think Future Employment Opportunities Will Be Better .............................................................................................. 407
CHARTS Inequality Eventually Leads to Economic Adjustments Often Precipitously ............................................................................. 407
CHARTS - NFIB Small Business Sentiment ................................................................................................................................................... 408
CHARTS - Orange Book .................................................................................................................................................................................. 408
CHARTS Asset Allocation Global Equities ................................................................................................................................................ 409
CHARTS Asset Allocation Global Bonds .................................................................................................................................................. 409
CHARTS Active versus Passive Funds Allocation ....................................................................................................................................... 410
CHARTS Investors Intelligence Survey of % Bears ..................................................................................................................................... 410
CHARTS Sentiment at Post 2008 Crisis Highs ............................................................................................................................................ 411
CHARTS CNBC Viewership Steadily Falling ............................................................................................................................................... 412

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CHARTS Investor Allocation Trends for Stocks, Bonds and Cash .............................................................................................................. 413
CHARTS Uptick in Feds Financial Stress Index Composite ....................................................................................................................... 414
CHARTS Fear Barometer Diverges with VIX, CDS IG Index ...................................................................................................................... 415
CHARTS Extreme Complacency Seen Near End of Cycles ........................................................................................................................ 415
CHARTS Complacency Seen In PE/VIX ....................................................................................................................................................... 416
CHARTS Post Crisis Sentiment Profile Shows a Clear Ending Pattern ...................................................................................................... 416
CHARTS Smart Money Flows ...................................................................................................................................................................... 417
CHARTS Fed Assets versus Bullish Sentiment ........................................................................................................................................... 417
CHARTS Macro Support Has Technically Broken Down ............................................................................................................................. 418
CHARTS US Surprise Index Setting Up for Downturn ................................................................................................................................. 418
CHARTS The Public No Longer Trusts the Market Feel it is Manipulated and Ineffectively Regulated ............................................... 419
RESEARCH OF NOTE .......................................................................................................................................................................................... 420
NEW-SENTIMENT: NFIB Slams Fed, Obama As Small Business Optimism Crashes To 2 Year Lows ....................................................... 420

INTERMEDIATE TERM RISK ANALYSIS ................................................................................................................................. 422


UPDATED-AGGREGATED GLOBAL FINANCIAL RISK INDEX .......................................................................................................................... 422
NEW-BANKING RISK - LIBOR-OIS SPREAD ................................................................................................................................................ 423
NEW-BANKING RISK - TED SPREAD ........................................................................................................................................................... 423
NEW-CREDIT RISK - GLOBAL CREDIT DEFAULT SWAPS ....................................................................................................................... 424
NEW-CREDIT RISK - EU CREDIT DEFAULT SWAPS .................................................................................................................................. 424
NEW-CONSUMER RISK - HOUSING - RATE OF CHANGE ......................................................................................................................... 425
NEW-ECONOMIC RISK - ECRI LEADING INDEX ......................................................................................................................................... 425
NEW-INFLATION RISK - MONEY SUPPLY GROWTH - M3 ......................................................................................................................... 427
NEW-INFLATION RISK - MONEY VELOCITY ............................................................................................................................................... 427
MONETARY RISK - BANK LIABILITIES ......................................................................................................................................................... 428
NEW-COST OF MONEY RISK - INTEREST RATES .................................................................................................................................... 429
AGGREGATED RISK LEVEL ................................................................................................................................................................................ 430
STUDY OF IMPORTANCE .................................................................................................................................................................................... 432
NEW-STUDY - The Killer Wave Confirms a Big Bear Market Lies Ahead ................................................................................................. 432
CHARTS OF NOTE ............................................................................................................................................................................................... 438
NEW-RISK Nasdaq risk is dramatically higher than S&P risk .................................................................................................................. 438
NEW-RISK Draghis ECB Announcement Triggers Bull Reversal To Evercore ...................................................................................... 439
NEW-RISK High Probability US Recession in 2016 ................................................................................................................................. 440
NEW-RISK Price-to-Sales Presently Second Highest to the Dotcom Bubble Collapse .......................................................................... 440
NEW-RISK Industrial Production Is Rolling Over ..................................................................................................................................... 441
NEW-RISK NYSE Margin Debt at Record Levels .................................................................................................................................... 442
NEW-RISK Margin Debt to GDP Higher then 2000 and 2007 ................................................................................................................. 443
NEW-RISK Margin Debt to GDP and 3-Year Stock Returns ................................................................................................................... 444
NEW-RISK Margin Debt to GDP and 3-Year Stock Returns ................................................................................................................... 445
NEW-RISK Investors Sell Dividend Funds, MLPs, REITs and High Yield ............................................................................................... 446
NEW-RISK Bull to Bear Ratio Unprecedented Optimism ..................................................................................................................... 447
NEW-RISK Turmoil in High Yield Bonds .................................................................................................................................................. 448
NEW-RISK New Global Risk US Growth European Financial Conditions .......................................................................................... 449
NEW-RISK Leveraged Loans and HY Corporate Bond Yields Warn of Possible SPX of 1100 .............................................................. 449
NEW-RISK Global Financial Risk ............................................................................................................................................................. 450
NEW-RISK US Financials Stocks versus Credit ................................................................................................................................... 450
NEW-RISK Something Is Seriously Wrong Somewhere in Deutsche Bank 5Y Sub CDS ................................................................... 451
NEW-RISK Something Is Seriously Wrong Somewhere in Deutsche Bank Lehman Comparison ...................................................... 451
NEW-RISK Something Is Seriously Wrong Somewhere in Deutsche Bank Ending Diagonal Goes Lower ......................................... 452
NEW-RISK Small Cap Stocks versus HY Bond Spread .......................................................................................................................... 452
NEW-RISK Net Cash Companies Scarce EBITDA Cash Flow .......................................................................................................... 453
NEW-RISK Falling Animal Spirits - Sinking CEO Confidence .................................................................................................................. 453
NEW-RISK Bull-Bear Ratio Collapses ...................................................................................................................................................... 454
NEW-RISK SPX Percent off 2009 High .................................................................................................................................................... 455
NEW-RISK SPX Price-Earnings-PE Ratio ............................................................................................................................................... 455
NEW-RISK Stock market more Over-valued than prior to Previous Crashes!......................................................................................... 456
NEW-RISK Coppock Signaling Problems Ahead ..................................................................................................................................... 456
NEW-RISK Junk Bond Movements Have Been Dependable Warning Indicators Since Dotcom Bubble Burst ..................................... 457
NEW-RISK Corporate Profits and Wages Diverge ................................................................................................................................... 457
NEW-RISK Russell 1000 Equal Weight: Cap-Weight Ratio .................................................................................................................. 458
NEW-RISK Long Term Monthly Reversal Signal ..................................................................................................................................... 458
NEW-RISK Markets Historically Fail after Three months of Falling Margin Debt We Have 2 Months ................................................. 459
NEW-RISK Margin Debt Channel is Pretty Clear High Odds of Troubles Ahead ................................................................................. 459
NEW-RISK Goldman Joins the Chorus Warning on Bond Market Liquidity ............................................................................................ 460
NEW-RISK So Goes Retail So Goes the US Economy ........................................................................................................................ 460
NEW-RISK Consumer Discretionary Sending Signals ............................................................................................................................. 461
NEW-RISK Net EBITDA 2x Highest since 2006 % of companies with net cash Lowest since 2006 ...................................................... 463
NEW-RISK US Corporate Net Debt Has Exploded & Now Massively Exceeds EBITDA ........................................................................ 463
NEW-RISK CBOE Skew Index ................................................................................................................................................................. 464
NEW-RISK Gap Between Uncertainties Priced in the Debt & Equity Markets ........................................................................................ 464
NEW-RISK Beware of EPS manipulation ................................................................................................................................................. 465
NEW-RISK Total NYSE Short Interest & Monthly Change ...................................................................................................................... 466
NEW-RISK Contrasting Post October Market Drawdowns 1973s Slow Pain versus 1987 Crash ..................................................... 466
NEW-RISK Historical Post-Crash Price Actions 1950 to 2015 ............................................................................................................. 467
NEW-RISK Historical Post-Crash Price Pattern Has Taken an Average of 27 days to Double Bottom .................................................. 467

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NEW-RISK Credit Fleeing IG,HY & EM .................................................................................................................................................... 468


NEW-RISK Credit Fleeing IG,HY & EM .................................................................................................................................................... 468
NEW-RISK Margin Debt in NYSE Accounts versus S&P 500 ................................................................................................................. 469
NEW-RISK Credit Risk Increasing ............................................................................................................................................................ 470
NEW-RISK TED Spread Increasing ......................................................................................................................................................... 470
NEW-RISK VIX Pricing in Credit Problems .............................................................................................................................................. 471
NEW-RISK Credit Always Leads Markets Its the Life Blood!............................................................................................................. 471
NEW-RISK The Pattern is Clear QE the Market Driver......................................................................................................................... 472
NEW-RISK Internal deterioration in the market is more consistent with the development of more major bull market peaks .............. 473
NEW-RISK A huge gap has opened up between reality and perceptions ............................................................................................... 474
NEW-RISK Economic Surprise Index lower highs, lower lows and a reluctant bounce ....................................................................... 475
NEW-RISK Weekly Equity Outflows ......................................................................................................................................................... 475
NEW-RISK Weekly EM Fund Outflows .................................................................................................................................................... 476
NEW-RISK Net Outflows as a % of AUM by Year ................................................................................................................................... 477
NEW-RISK HG Spread Per Point of Equity Volume ................................................................................................................................ 478
NEW-RISK Widening Gap between Debt & Equity .................................................................................................................................. 478
NEW-RISK HY Bond ETF (HYG) versus S&P 500 .................................................................................................................................. 479
NEW-RISK HY Credit versus 2007-2008 Credit Always Leads Equity .............................................................................................. 479
NEW-RISK Leutholds High/Low Logic Index Sending a Clear Signal .................................................................................................... 480
RISK: Only a Few Key Stocks Holding Up the Market .................................................................................................................................... 481
RISK: Economic Output Composite Failing .................................................................................................................................................... 482
RISK: 5 Year Cyclically Adjusted P/E Ratio versus S&P Price ....................................................................................................................... 483
RISK: Margin Debt Shrinking .......................................................................................................................................................................... 483
RISK: Leutholds High/Lpw Logic Index Warns .............................................................................................................................................. 484
RISK: Megaphone Top with Confirming Oscillator .......................................................................................................................................... 484
RISK: We Have Confirmed and Unusual Hindenburg Omens ........................................................................................................................ 485
RISK: It's been a while since we corrected! .................................................................................................................................................... 486
RISK: "Seven Signs" Flash Red ...................................................................................................................................................................... 488
RISK: When these Two Charts Appear Simultaneously, Bad Things Normally Follow!................................................................................. 489
RISK: Well That's Never Happened Before - Exhibit 1 US Macro versus S&P 500 .................................................................................... 489
RISK: Well That's Never Happened Before - Exhibit 2 Long- and Short-end of the Treasury yield curve so anti-correlated. ................... 490
RISK: Well That's Never Happened Before - Exhibit 3 Fed-Fueled, Mal-Investment Boom ....................................................................... 491
RISK: Well That's Never Happened Before - Exhibit 4 Market breadth diverge from performance for such an extended period.............. 492
RISK: Well That's Never Happened Before - Exhibit 5 More trades per second in stocks ......................................................................... 494
RISK: Well That's Never Happened Before - Exhibit 6 The "Smart Money" Has Never Been More Bearish .............................................. 495
RISK: Well That's Never Happened Before - Exhibit 7 Big decoupling in recent weeks between US equity flows and prices ................... 495
RISK: Well That's Never Happened Before - Exhibit 8 Cumulative 3 Mo net flows out of equities, is now the largest on record ............... 496
RISK: World Stocks versus World 2015 GDP Estimate.................................................................................................................................. 498
RISK: World Stocks versus World 2014 & 2015 GDP Estimates ................................................................................................................... 498
RISK: World Stocks versus 10Y UST Yield, WTI Crude 2015 GDP Estimates .............................................................................................. 499
RISK: Fat Tails Have Disproportionately Large Impact on Returns................................................................................................................ 500
RISK: Statistically We Are Due for a Drawdown ............................................................................................................................................. 501
RISK: The Buffett Indicator .............................................................................................................................................................................. 502
RISK: Speculation Has Taken Control of the Markets .................................................................................................................................... 503
RISK: MSCI versus World GDP Divergence - Unsustainable ........................................................................................................................ 503
RISK: High Yield Credit Risk At Elevated Levels ............................................................................................................................................ 503
RISK: Active Hindenburg Omen ...................................................................................................................................................................... 504
RISK: An Over-Levered Hedge Fund Index Ending ABC Consolidation Pattern ........................................................................................... 504
RESEARCH OF NOTE .......................................................................................................................................................................................... 506
RISK: Expert That Correctly Predicted Market Moves In July, August And September Says Stocks Will Crash In November .................... 506
RISK: 4 Warnings And Why You Should Pay Attention .................................................................................................................................. 508
RISK: According To Bank of America, This Is "The Biggest Risk to Global Equities" .................................................................................... 513
RISK: The "Smartest Money" Liquidating At a Record Pace: "Selling Everything ........................................................................................ 515
RISK: Top CEO Warns Of Global Reset: "It's In The Cards For Sure... It Could Happen This Year" ........................................................... 518
RISK: $140 Billion Bond Fund Goes To Cash As It "Braces For Bond-Market Collapse" ............................................................................. 519
RISK: "It's Time To Hold Physical Cash", Fidelity Manager Warns Ahead Of "Systemic Event" ................................................................... 522
RISK: Sweden's Largest Fund Manager Is Quietly Dumping Stocks Before The "Herd" Is Caught In A Selling Vortex ............................... 524
RISK: 12 Signs That An Imminent Global Financial Crash Has Become Even More Likely .......................................................................... 525
RISK: World's Largest Sovereign Wealth Fund Is About To Become A Seller .............................................................................................. 526
RISK: When Hindenburg Omens Are Ominous .............................................................................................................................................. 530
RISK: The Canaries Continue To Drop like Flies ............................................................................................................................................ 532
RISK: Deutsche Suggests 'Caution' As "Seven Signs" Flash Red ................................................................................................................. 534
RISK: "The Top's In" David Stockman Warns Of "Epochal Deflation" ............................................................................................................ 535
RISK: When Hindenburg Omens Are Ominous .............................................................................................................................................. 536
RISK: Two Point Three Sigmas Above the Norm ........................................................................................................................................... 538
RISK: No Really, Who is Buying? ................................................................................................................................................................... 546
RISK: Curious Sightings .................................................................................................................................................................................. 547
RISK: Even the BIS Is Shocked At How Broken Markets Have Become ....................................................................................................... 554
RISK: The Line between Rational Speculation and Market Collapse ............................................................................................................. 558
RISK: Global Economy Will Shrink By $2.3 Trillion In 2015 ........................................................................................................................... 563
RISK: Market Action Suggests Abrupt Slowing in Global Economic Activity.................................................................................................. 563
RISK: Warnings Signs Are Everywhere .......................................................................................................................................................... 567
RISK: Hindenburg Signals a Warning ............................................................................................................................................................. 568
RISK: Americans say they're too broke to invest ............................................................................................................................................ 570
RISK: The Biology of Risk ............................................................................................................................................................................... 574
RISK: More Signs Of Bullish Excess ............................................................................................................................................................... 578

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Restricted & Confidential


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RISK: Markets Have Left the "Complacency" Phase, Have Entered Full Blown "Mania" .............................................................................. 580
RISK: VIX Sends Message of Complacency ................................................................................................................................................... 581
RISK: CS Warns Volume & DeMark Raise "Topping Threat" In Stocks ......................................................................................................... 582
RISK: No One Will Ring the Bell at the Top .................................................................................................................................................... 586
Cassandra's - New Additions to the List ................................................................................................................................................................ 593
CASSANDRA: "Severe Correction Or Cyclical Bear" Ahead: Leuthold Major Trend Index Turns Negative ................................................. 594
CASSANDRA: CANARIES - Warnings Everywhere! ...................................................................................................................................... 595
CASSANDRA: Stephen Schork: The Commodity Crash Is "A Canary In The Coal Mine For The Global Economy" ................................... 597
CASSANDRA: Emerging Market Mayhem: Gross Warns Of "Debacle" As Currencies, Bonds Collapse ..................................................... 599
CASSANDRA: "Another Crisis Is Coming": Jamie Dimon Warns Of the Next Market Crash ........................................................................ 606
CASSANDRA: Steen Jakobsen: Get Ready For The Biggest Margin Call In History .................................................................................... 607
CASSANDRA: Wynn Calls "Big" Recovery "Complete Dream" As Gaming Revenues Collapse .................................................................. 609
CASSANDRA: Stan Druckenmiller's "Horrific Sense" Of Deja Vu: "This Will End Very Badly" ..................................................................... 611
CASSANDRA: Hedge Fund Legend Julian Robertson Warns Of A "Complete Explosion" Unless Fed Contains "Boiling, Bubble" ............ 616
CASSANDRA: Kyle Bass Warns "The Fed Is Backed Into A Corner... Equities Are My Biggest Liquidity Worry" ........................................ 617
CASSANDRA: Paul Tudor Jones Warns "Disastrous Market Mania" Will End In "Revolution, Taxes, or War" ............................................ 618
CASSANDRA: John Hussman - A Who's Who Of Awful Times To Invest ..................................................................................................... 620
CASSANDRA: Carl Icahn - One Day You'll See A Break Like A Few Weeks Ago But The Market Won't Come Back ................................ 623
CASSANDRA: Sam Zell Warns Of Stock Market Correction On CNBC ........................................................................................................ 624
CASSANDRA: Billionaire Carl Icahn warns on US stock prices ..................................................................................................................... 624
CASSANDRA: Soros Bets $2 Billion on Stock Market Collapse .................................................................................................................... 625
CASSANDRA: Dont Ignore Janet Yellens Stock Market Warnings 07-21-14 Fiscal Times ......................................................................... 626
CASSANDRA: Doug Kass: We're Heading for a Bear Market So Plan Accordingly ...................................................................................... 629
CASSANDRA: Comstock Funds Weighs In .................................................................................................................................................... 631
CASSANDRA: Michael Lombardi Weighs In ................................................................................................................................................... 633
CASSANDRA: Ron Paul Portfolio, 'Craziest' we've ever seen? ..................................................................................................................... 635
CASSANDRA: John Mauldin Goes Negative .................................................................................................................................................. 636
CASSANDRA: Hayman Capital Dramatically Reduces Risk .......................................................................................................................... 644
CASSANDRA: Byron Wien Warns "Oblivious Markets" Of 20% Correction ................................................................................................... 645
CASSANDRA: Harry Dent Warns Stocks to Sink More than 60% by End of 2014 ........................................................................................ 645
CASSANDRA: Stanley Druckenmiller: "When You Get This Kind Of Rigging, It Will End Badly".................................................................. 646
CASSANDRA: Mohamed El-Erian: "Prices Are Artificially High - Its Time to Take Profits" .......................................................................... 647
CASSANDRA: Felix Zulauf: World Headed Toward 1987 Style Market Collapse .......................................................................................... 648
CASSANDRA: Doug Kass: 'I'm Getting The Summer Of 1987 Feeling' In The Market Right Now ............................................................... 648
CORRELATION & COMPLACENCY A PROBLEM .............................................................................................................................................. 650
EVENT RISK A PROBLEM .................................................................................................................................................................................... 653
Q2 EARNINGS & THE R WORD .............................................................................................................................................................. 653
POLITICAL-ECONOMIC TENSIONS .......................................................................................................................................................... 653
CENTRAL BANK POLICY MISCUES.......................................................................................................................................................... 653
ASIAN ECONOMIC SLOWDOWN SPILLAGE ............................................................................................................................................ 653
PETRO$ CRISIS BREWING IN BRIICS...................................................................................................................................................... 653

LONGER TERM - FUNDAMENTAL ANALYSIS .............................................................................................................................. 654


HIGHLIGHTS ......................................................................................................................................................................................................... 654
ASSET & LIABILITY OWNERSHIP ................................................................................................................................................................. 654
PANIC TOTAL RETURN DISTRIBUTION SINCE 1974 ................................................................................................................................. 654
PANIC CHASE FOR YIELD ............................................................................................................................................................................ 655
REAL S&P MARKET CAP / REAL GDP ......................................................................................................................................................... 655
UNSUSTAINABLE GAP BETWEEN PROFITS AND INCOME ...................................................................................................................... 656
ADJUSTED CORPORATE PROFITS FROM DOMESTIC OPERATIONS .................................................................................................... 656
TRAILING 10Y 12 MONTH NET MARGINS ................................................................................................................................................... 657
INVESTMENT CLASS PERFORMANCE ....................................................................................................................................................... 658
NEW-VALUATION SUMMARY ....................................................................................................................................................................... 659
VALUATION: Alternative Methodologies ............................................................................................................................................................... 664
NEW-FOUR SET CONSOLIDATED MARKET VALUATION INDICATORS .................................................................................................. 664
NEW-Crestmont from the Arithmetic ............................................................................................................................................................... 668
NEW-Cyclical PE 10 Ratio............................................................................................................................................................................... 673
NEW-Q Ratio ................................................................................................................................................................................................... 680
NEW-S&P Composite Regression-to-the-Trend ............................................................................................................................................. 685
NEW-Reference Methodologies Analysis ....................................................................................................................................................... 687
CHARTS OF NOTE ......................................................................................................................................................................................... 694
NEW- VALUATIONS Price-to-Sales Presently Second Highest to the Dotcom Bubble Collapse .......................................................... 694
NEW- VALUATIONS Cumulative Flows ................................................................................................................................................... 694
NEW- VALUATIONS GAAP versus Non-GAAP Net Margins .................................................................................................................. 695
VALUATIONS Forward 12-Month P/E Ratio 10 Years.......................................................................................................................... 695
VALUATIONS Forward 12-Month EPS versus Change in Price 10 Years ........................................................................................... 696
VALUATIONS Net Margin Growth ............................................................................................................................................................ 697
VALUATIONS 10 Year Trailing 12 Mo Net Margin Growth Historically High ........................................................................................ 697
VALUATIONS Record Profits Yet Historically Low Capital Asset Growth ............................................................................................... 698
VALUATIONS Historical Ranking of PE Values ....................................................................................................................................... 699
VALUATIONS Median Price/Cash Flow Multiple for US Stocks .............................................................................................................. 700
VALUATIONS Median Price/Earnings Multiple for US Stocks ................................................................................................................. 701
VALUATIONS Median Price to Book Multiple for US Stocks ................................................................................................................... 702
VALUATIONS Price/Book; Price/Cash flow; Price/Sales ......................................................................................................................... 703
VALUATIONS Global Equities Reported PE, PE before XO & Fwd PE ............................................................................................... 704

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NEW-2016 EARNINGS Earnings Projections .................................................................................................................................................... 705


STUDY: 2016 EARNINGS - ................................................................................................................................................................................... 705
CHARTS OF NOTE ......................................................................................................................................................................................... 705
2016 EARNINGS Historical Global Consensus Earnings Estimates ....................................................................................................... 705
2016 EARNINGS 12 Month Forward EPS Consensus ............................................................................................................................ 705
2016 EARNINGS SPX Earnings CY 2016 ............................................................................................................................................ 706
2016 EARNINGS A 2016 Hockey Stick Forecast Only the Nave Would Believe ................................................................................. 706
2016 EARNINGS US Forward PE versus Fed Funds Rate ..................................................................................................................... 707
2016 EARNINGS US Operating Profit Margin versus US Monetary Indicators ....................................................................................... 707
RESEARCH OF NOTE .................................................................................................................................................................................... 708
2016 EARNINGS 2016 EPS Growth Estimates Slashed By 50% Just One Month Into The Year ......................................................... 708
2016 EARNINGS Another Data Point To Ignore: Dividend Cuts Have Surpassed 2008 ........................................................................ 710
2016 EARNINGS Profit, Multiple & Margin Trouble Are In Store For Global Equities In 2016 ................................................................ 712
NEW-YE EARNINGS 2015 Forecasts ................................................................................................................................................................ 714
CHARTS OF NOTE ......................................................................................................................................................................................... 714
2015 EARNINGS 2015 & 2016 Annual Earnings EPS Estimate v Historical........................................................................................... 714
2015 EARNINGS Q3 Earnings Estimate Revisions v Change in Price ................................................................................................... 715
2015 EARNINGS Consumer Staples & Discretionary are sending a Pretty Clear ( Worsening Since Q1) Message ............................ 716
2015 EARNINGS Consensus Long-Term Growth versus Forward PE ................................................................................................... 717
2015 EARNINGS Consensus Analysts Estimates 1979-1995 ............................................................................................................. 718
2015 EARNINGS Consensus Analysts Estimates 1995-2014 ............................................................................................................. 718
2015 EARNINGS CY 2015 Earnings Growth ........................................................................................................................................... 719
2015 EARNINGS CY 2015 Revenue Growth ........................................................................................................................................... 719
2015 EARNINGS Q2 Forward 12 Mo EPS versus Change in Price ..................................................................................................... 720
2015 EARNINGS Q1 Forward 12 PE Ratio ........................................................................................................................................... 721
RESEARCH OF NOTE .................................................................................................................................................................................... 722
2015 EARNINGS Q1 Earnings Guidance: Negative Guidance (84%) Above Average ........................................................................... 722
NEW-2015 Q4 EARNINGS Earnings Recession ............................................................................................................................................... 723
STUDY: Q4 EARNINGS - ...................................................................................................................................................................................... 723
CHARTS OF NOTE ......................................................................................................................................................................................... 723
Q4 EARNINGS SPX Earnings 2007-2009 versus 2014-Today ............................................................................................................ 723
Q4 EARNINGS Dividend Cuts Accelerate ................................................................................................................................................ 723
Q4 EARNINGS EBITDA Growth Is the Worst Since 2000 ....................................................................................................................... 724
Q4 EARNINGS All Country World Earnings and BCAs EPS Model ....................................................................................................... 724
RESEARCH OF NOTE .................................................................................................................................................................................... 725
Q4 EARNINGS Avondales CEO Feedback Company Notes Digest 02.12.15 .................................................................................... 725
Q4 EARNINGS Avondales CEO Feedback Company Notes Digest 02.05.15 .................................................................................... 729
Q4 EARNINGS Avondales CEO Feedback Company Notes Digest 01.29.15 .................................................................................... 735
Q4 EARNINGS Here's How Much The Strong Dollar Hurts US Companies ........................................................................................... 742
Q4 EARNINGS Q4 Will Be The Worst U.S. Earnings Season Since The Third Quarter Of 2009........................................................... 746
Q3 2015 EARNINGS Earnings Recession ......................................................................................................................................................... 749
STUDY: Q3 EARNINGS - ...................................................................................................................................................................................... 749
CHARTS OF NOTE ......................................................................................................................................................................................... 749
Q3 EARNINGS Y-o-Y Change in 12 Month Profits Per Share ................................................................................................................. 749
Q3 EARNINGS Goldman Now Forecasts Flat Margin Growth in 2016 ................................................................................................... 749
Q3 EARNINGS US Corporate Profit Growth Turns Negative .................................................................................................................. 750
Q3 EARNINGS Technology Sales Growth (ex AAPL & GOOG) ............................................................................................................. 750
Q3 EARNINGS Percentage of US Companies Losing Money ................................................................................................................. 751
Q3 EARNINGS The stock market more Over-valued than prior to Previous Crashes! ........................................................................... 751
Q3 EARNINGS Biggest Drop in Profits Since 2009 ................................................................................................................................. 752
Q3 EARNINGS Negative Sales Surprise Ran Significantly Higher than Average ................................................................................... 752
Q3 EARNINGS Y-o-Y Change in Quarterly Earnings and Revenue for S&P 500 ................................................................................... 753
Q3 EARNINGS Forward Earnings being Brought Down Rapidly............................................................................................................. 753
Q3 EARNINGS # S&P 500 Companies Citing Negative Q3 Impacts - Reasons ..................................................................................... 754
Q3 EARNINGS Q4 15 Estimated Earnings Growth Rate ........................................................................................................................ 754
Q3 EARNINGS Revenue & Earnings Consensus Estimated Growth Rate ............................................................................................ 755
Q3 EARNINGS Q3 EPS Expected to Fall -4.5% According to Factset ................................................................................................... 756
Q3 EARNINGS S&P 500 Average Earnings Growth Y-o-Y Not a Good Pattern .................................................................................. 756
Q3 EARNINGS Revenue Recession and Flat EPS Consensus .............................................................................................................. 757
Q3 EARNINGS Forward EPS Consensus Matches Manufacturing Surveys Declines ........................................................................... 757
Q3 EARNINGS Q3 Earnings Growth (Decline): Ex-BAC ......................................................................................................................... 758
Q3 EARNINGS IT Sector Q3 Earnings Forecast to be Down -5.9% Without Apple (-0.4% With) .......................................................... 758
Q3 EARNINGS A Good Sign that Goldman Must Be Selling? ................................................................................................................. 759
Q3 EARNINGS It Should Be Expected that Earnings Will Begin to fall ................................................................................................... 759
RESEARCH OF NOTE .................................................................................................................................................................................... 760
Q3 EARNINGS The Most Important Earnings Report You Should Know About ..................................................................................... 760
Q3 EARNINGS Q3 Earnings -Where We Stand - 4 Main Themes From Calls ....................................................................................... 762
Q3 EARNINGS Goldman's 4 Word Summary Of Q3 Earnings Season- -Adequate Earnings, Dismal Sales ......................................... 770
Q3 EARNINGS Do You See What Happens, Alcoa, When Your "Restructuring" Non-GAAP Add-backs Tumble ................................. 776
Q3 EARNINGS Q3 Earnings Bloodbath-Terrible Monsanto Results- Company Fires 2,600 - ................................................................ 777
Q3 EARNINGS Wall Street is preparing for the worst earnings season since 2009 ............................................................................. 779
Q3 EARNINGS The Truth About S&P 500 Earnings: No Growth For 7 Quarters, With A Revenue Recession On Top ........................ 783
Q3 EARNINGS Earnings Now Surfacing as a Problem ..................................................................................................................................... 784
CHARTS OF NOTE ......................................................................................................................................................................................... 784

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Q3 EARNINGS Biggest Drop in Profits Since 2009 ................................................................................................................................. 784


Q3 EARNINGS Negative Sales Surprise Ran Significantly Higher than Average ................................................................................... 784
Q3 EARNINGS Y-o-Y Change in Quarterly Earnings and Revenue for S&P 500 ................................................................................... 785
Q3 EARNINGS Forward Earnings being Brought Down Rapidly............................................................................................................. 785
Q3 EARNINGS # S&P 500 Companies Citing Negative Q3 Impacts - Reasons ..................................................................................... 786
Q3 EARNINGS Q4 15 Estimated Earnings Growth Rate ........................................................................................................................ 786
Q3 EARNINGS Revenue & Earnings Consensus Estimated Growth Rate ............................................................................................ 787
Q3 EARNINGS Q3 EPS Expected to Fall -4.5% According to Factset ................................................................................................... 788
Q3 EARNINGS S&P 500 Average Earnings Growth Y-o-Y Not a Good Pattern .................................................................................. 788
Q3 EARNINGS Revenue Recession and Flat EPS Consensus .............................................................................................................. 789
Q3 EARNINGS Forward EPS Consensus Matches Manufacturing Surveys Declines ........................................................................... 789
Q3 EARNINGS Q3 Earnings Growth (Decline): Ex-BAC ......................................................................................................................... 790
Q3 EARNINGS IT Sector Q3 Earnings Forecast to be Down -5.9% Without Apple (-0.4% With) .......................................................... 791
Q3 EARNINGS A Good Sign that Goldman Must Be Selling? ................................................................................................................. 791
Q3 EARNINGS It Should Be Expected that Earnings Will Begin to fall ................................................................................................... 791
RESEARCH OF NOTE .................................................................................................................................................................................... 792
Q3 EARNINGS The Most Important Earnings Report You Should Know About ..................................................................................... 792
Q3 EARNINGS Q3 Earnings -Where We Stand - 4 Main Themes From Calls ....................................................................................... 794
Q3 EARNINGS Goldman's 4 Word Summary Of Q3 Earnings Season- -Adequate Earnings, Dismal Sales ......................................... 802
Q3 EARNINGS Do You See What Happens, Alcoa, When Your "Restructuring" Non-GAAP Add-backs Tumble ................................. 807
Q3 EARNINGS Q3 Earnings Bloodbath-Terrible Monsanto Results- Company Fires 2,600 - ................................................................ 808
Q3 EARNINGS Wall Street is preparing for the worst earnings season since 2009 ............................................................................. 810
Q3 EARNINGS The Truth About S&P 500 Earnings: No Growth For 7 Quarters, With A Revenue Recession On Top ........................ 814
Q2 2015 EARNINGS Reported Results ............................................................................................................................................................. 815
CHARTS OF NOTE ......................................................................................................................................................................................... 815
Q2 EARNINGS Q2 Earnings Growth by Sector ....................................................................................................................................... 815
Q2 EARNINGS Q2 Revenue Growth by Sector ....................................................................................................................................... 815
Q2 EARNINGS Q2 Earnings Growth by Sector - Estimates .................................................................................................................... 816
Q2 EARNINGS Q2 Revenue Growth by Sector Estimates ................................................................................................................... 816
RESEARCH OF NOTE .................................................................................................................................................................................... 818
Q2 EARNINGS Q2 Summary ................................................................................................................................................................... 818
Q2 EARNINGS Percentage of Companies Beating Revenue Estimates (52%) is Below 5 Year Average ............................................. 819
Q2 EARNINGS Forward Earnings, Revenue and Margins ...................................................................................................................... 820
Q2 EARNINGS First Decline in Earnings (-1.3%) Since Q3 2012 (-1.06%) ............................................................................................ 821
Q2 EARNINGS First Back-to-Back Declines in Revenue Since Q2 2009 and Q3 2009 ......................................................................... 822
Q1 2015 EARNINGS Reported Results ............................................................................................................................................................. 823
CHARTS OF NOTE ......................................................................................................................................................................................... 823
Q1 EARNINGS Q1 Earnings Growth by Sector ....................................................................................................................................... 823
Q1 EARNINGS Q1 Revenue Growth by Sector ....................................................................................................................................... 823
Q1 EARNINGS Q1 Earnings Growth by Sector - Estimates .................................................................................................................... 824
Q1 EARNINGS Q1 Reveue Growth by Sector - Estimates ...................................................................................................................... 824
RESEARCH OF NOTE .................................................................................................................................................................................... 825
Q1 EARNINGS Q1 Summary ................................................................................................................................................................... 825
Q1 EARNINGS Fewer Companies Beating Estimates and Sales Estimates Than Average .................................................................. 825
Q1 EARNINGS Forward Earnings, Revenue and Margins ...................................................................................................................... 827
Q1 EARNINGS First Decline in Earnings (-0.4%) Since Q3 2012 (-1.06%) ............................................................................................ 828
Q1 EARNINGS First Decline in Revenues (-2.6%) Since Q3 2012 (-11.5%) .......................................................................................... 829
BUYBACKS Widening Credit Spreads Become A Problem ............................................................................................................................... 830
CHARTS OF NOTE ......................................................................................................................................................................................... 830
NEW-BUYBACKS Cost of Buybacks In Increasing .................................................................................................................................. 830
NEW-BUYBACKS BoAML Corporate Clients Buybacks in the First 9 Weeks of Each Year ............................................................... 830
NEW-BUYBACKS BoAML Corporate Clients 4 Wk Average Buybacks Y-o-Y % Change ..................................................................... 831
NEW-BUYBACKS Buybacks Have Accounted for Around 1/3 of EPS Growth Since Q3 2011 .............................................................. 831
NEW-BUYBACKS Net Cash Companies Are Increasingly Scarce ........................................................................................................ 832
NEW-BUYBACKS EBITDA Growth Is the Worst Since 2000 .................................................................................................................. 832
NEW-BUYBACKS Buybacks v SPX Total Return Indices ....................................................................................................................... 833
NEW-BUYBACKS Proof that Buybacks Mainly Funded By Debt ............................................................................................................ 833
NEW-BUYBACKS US Companies Continuing to Borrow To Buyback Stock .......................................................................................... 834
NEW-BUYBACKS Debt/EBITDA v FCF-Cost of Debt - 2013 .................................................................................................................. 834
NEW-BUYBACKS Debt/EBITDA v FCF-Cost of Debt 2015 ................................................................................................................. 835
NEW-BUYBACKS Buybacks & Dividends as a Percentage of Net Income ............................................................................................ 836
NEW-BUYBACKS After Historic Buybacks the Y-o-Y Change in 12 Month Profits Per Share Still Shrinks! .......................................... 836
NEW-BUYBACKS Buybacks & Dividends as a Percentage of Net Income Against Spending on Buybacks ......................................... 837
NEW-BUYBACKS Outperformance of Stocks with Large Buybacks Programs vs S&P 500 .................................................................. 837
BUYBACKS Gross Leverage for Typical IG/HY Non-Financial Debt-EBITDA ..................................................................................... 838
BUYBACKS Equity Market Performance v S&P 500 Uses of Cash ........................................................................................................ 839
BUYBACKS Default Rate v Net Equity Buybacks .................................................................................................................................... 839
BUYBACKS S&P 500 Buyback Index 200 DMA ................................................................................................................................... 840
BUYBACKS S&P 500 v Buyback Index Performance.............................................................................................................................. 840
BUYBACKS S&P 500 Annualized Share Buybacks, Dividends and Earnings ........................................................................................ 841
BUYBACKS Falling Investment Grade Spreads Hurting Buybacks ......................................................................................................... 841
BUYBACKS Quarterly Share Repurchases & No. of Companies Repurchasing Shares Slows ............................................................. 841
BUYBACKS Dollar-Value Buybacks to Free Cash Flow Trailing Twelve Month Basis ........................................................................ 842
BUYBACKS Nearly 25% of Annual Buybacks Occur in November & December .................................................................................... 843
BUYBACKS Outperformance of Stocks with Large Buybacks Programs vs S&P 500 ............................................................................ 844
BUYBACKS Gross Leverage for Typical IG/HY Non-Financial Debt-EBITDA ..................................................................................... 844

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BUYBACKS Equity Market Performance v S&P 500 Uses of Cash ........................................................................................................ 845
BUYBACKS Default Rate v Net Equity Buybacks .................................................................................................................................... 845
BUYBACKS S&P 500 Buyback Index 200 DMA ................................................................................................................................... 846
BUYBACKS S&P 500 v Buyback Index Performance.............................................................................................................................. 846
BUYBACKS S&P 500 Annualized Share Buybacks, Dividends and Earnings ........................................................................................ 847
BUYBACKS The real reason for the slowdown has to do with the spread on investment grade debt .................................................... 847
BUYBACKS Falling Investment Grade Spreads Hurting Buybacks ......................................................................................................... 848
BUYBACKS Quarterly Share Repurchases & No. of Companies Repurchasing Shares Slows ............................................................. 848
BUYBACKS Dollar-Value Buybacks to Free Cash Flow Trailing Twelve Month Basis ........................................................................ 849
BUYBACKS Nearly 25% of Annual Buybacks Occur in November & December .................................................................................... 849
RESEARCH OF NOTE .................................................................................................................................................................................... 851
NEW-BUYBACKS Buybacks Soar ........................................................................................................................................................... 851
NEW-NEW-BUYBACKS Buybacks Must Continue: AAPL, IBM Unveil Major Debt Issuance to Fund Shareholder-Friendliness .......... 852
NEW-BUYBACKS This Is the Biggest EBITDA Drop Outside Of A Recession Since 2000 ..................................................................... 853
NEW-BUYBACKS Stock Buybacks In Jeopardy: Investment Grade Bond Funds See Biggest Outflow In 17 Weeks ............................ 855
BUYBACKS MacroStrategy Explains Why Most Stocks Have Already "Crossed The Rubicon" ............................................................ 858
NEW-BUYBACKS The Cannibalized Corporation- Corporate America is undermining itself. ................................................................. 863
NEW-BUYBACKS The Fly In The Buyback Ointment- Corporate Leverage Is At Record Levels .......................................................... 870
NEW-BUYBACKS Why Stocks Are Sliding: For The First Time Since 2009 Spending On Buybacks Surpasses Free Cash Flow ....... 875
NEW-BUYBACKS When Buybacks Fail... ................................................................................................................................................ 879
NEW-BUYBACKS "Risky Business": Companies Are Now Funding Share Buybacks By Selling Bonds To Other Companies ............ 880
BUYBACKS The Fly In The Buyback Ointment- Corporate Leverage Is At Record Levels .................................................................... 883
BUYBACKS Why The Stock Buyback Party Is Ending ............................................................................................................................ 887
BUYBACKS Goldman Finds Buybacks No Longer Work To Boost Stock Prices: Two Reasons Why ................................................... 889
BUYBACKS Why Stocks Are Sliding: For The First Time Since 2009 Spending On Buybacks Surpasses Free Cash Flow ................ 892
BUYBACKS When Buybacks Fail... ......................................................................................................................................................... 896
BUYBACKS "Risky Business": Companies Are Now Funding Share Buybacks By Selling Bonds To Other Companies ...................... 897
BUYBACKS 94% of total S&P in 2015 will go back to shareholders, as dividends and buybacks ......................................................... 900
BUYBACKS CEO Pay Boosted from Giving Shareholders Cash ............................................................................................................ 901
BUYBACKS Investor-CEO Feedback Loop ............................................................................................................................................. 902
BUYBACKS Buybacks Account for Substantial Share of Corporate Profits ............................................................................................ 903
BUYBACKS Quarterly History of Buyback Announcments ...................................................................................................................... 903
BUYBACKS Buybacks as a Percentage of Total Cash Use at the Highest Level Since 2007................................................................ 904
BUYBACKS Weekly Buybacks and Rolling 3 Month Sum ....................................................................................................................... 904
BUYBACKS What Sustained Buybacks Look Like To Rating Agencies IBM Example ........................................................................ 905
BUYBACKS Dollar Volume of Share Buybacks and Dividends at Record Levels ................................................................................... 905
BUYBACKS Buybacks & Dividends Hurdle $900B in 2014 ..................................................................................................................... 905
BUYBACKS The Growth of Stock Buybacks............................................................................................................................................ 906
BUYBACKS Buybacks & Dividends as a Percentage of Operating Earnings ......................................................................................... 907
BUYBACKS Executive Compensation Structure...................................................................................................................................... 907
BUYBACKS During 2014 virtually 100% of S&P 500s reported profits of $1T were disgorged as shareholder distributions ................ 908
BUYBACKS 2015 US Equity Flows Forecast ........................................................................................................................................... 908
BUYBACKS Announced Gross Share Buybacks ..................................................................................................................................... 909
BUYBACKS Global IPO /Secondary Offerings versus Announced Gross Share Buybacks ................................................................... 909
BUYBACKS Actual Net Share Buybacks ................................................................................................................................................. 910
BUYBACKS US IPOs-Actual Buybacks and LBO .................................................................................................................................... 910
BUYBACKS Cash to Stockholders Exceeds 90% of Profits .................................................................................................................... 911
BUYBACKS Stock Repurchases Surge 30% in Q3 ................................................................................................................................. 911
BUYBACKS Stock Repurchases 2nd Highest on Record at $145B.......................................................................................................... 911
BUYBACKS 2914 YTD Stock Repurchases By Corporation 20 Corporations Over $4B ..................................................................... 912
BUYBACKS Operating EPS With / Without Buybacks ............................................................................................................................. 912
BUYBACKS Sales & Revenue Doesnt Support Reported EPS Due to Buyback Distortion ................................................................... 913
BUYBACKS S&P 500 Buyback Index versus S&P 500 ........................................................................................................................... 914
BUYBACKS The New S&P 500 Buyback Index TR ................................................................................................................................. 914
BUYBACKS The New S&P 500 Buyback Index Since Start of QE ......................................................................................................... 915
BUYBACKS IBM Total Debt to Equity (to Fund Buybacks) ..................................................................................................................... 915
BUYBACKS IBM Debt Issuance v Buybacks ........................................................................................................................................... 916
BUYBACKS Global FDI into Finance versus Productive Assets ............................................................................................................. 917
BUYBACKS Total Corporate Debt 35% Higher than 2008 Peak Used for Buybacks .......................................................................... 917
BUYBACKS Buyback Bonanza ................................................................................................................................................................ 918
BUYBACKS Buybacks Have Made a 1% Earnings Growth Distortion to Median S&P 500 Company ................................................... 918
BUYBACKS Top 10 Buyback Companies ................................................................................................................................................ 919
BUYBACKS Intel Buybacks ...................................................................................................................................................................... 919
BUYBACKS Shares Outstanding Back at 2000 Level ............................................................................................................................. 920
BUYBACKS Largest Volumes of Buybacks by US Listed Corporation in Last Year ............................................................................... 920
BUYBACKS Corporations Are No Longer Investing But Rather Financial Engineering Stock Prices ..................................................... 921
BUYBACKS Q2 Drop-Off Closer to Normal .......................................................................................................................................... 922
BUYBACKS Borrowing to Buy back Shares ............................................................................................................................................. 922
BUYBACKS Cyclical Nature of Buybacks Evident ................................................................................................................................... 922
BUYBACKS Major Q2 Repurchases ........................................................................................................................................................ 923
BUYBACKS Major Q1 Repurchases ........................................................................................................................................................ 923
BUYBACKS Quarterly Repurchase & Buyback Yield ............................................................................................................................... 924
BUYBACKS US Corporate Cash versus Buybacks .................................................................................................................................. 925
BUYBACKS Net Debt/EBITDA of American Non-Financial Corporations ............................................................................................... 925
BUYBACKS Stock Buybacks To Grind To A Halt Following Massive Credit Fund Outflows, "Bond Carnage" ....................................... 926
BUYBACKS"The End Of The Road" - Debt-Funded Buyback Boosts Are Finite ..................................................................................... 928
BUYBACKS Why There Is No Growth: The Entire S&P 500 Free Cash Flow Is Going Back To Shareholders ...................................... 931

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BUYBACKS Do Share Buybacks Create Value? (Spoiler Alert: No) ........................................................................................................ 932
BUYBACKS Surprise! CEOs Are Getting Rich by Buying Back Stock ..................................................................................................... 934
BUYBACKSThe End of Buybacks? Goldman Warns Political Pressure On Share Repurchases Is Rising ............................................ 939
BUYBACKSCorporate Buybacks: Connecting the Dots to the F-Word .................................................................................................... 941
BUYBACKS Capex Recovery Is Worst In History, BoAML Says .............................................................................................................. 946
BUYBACKS Stock Buybacks Move to the "Terminal" Next Stage ............................................................................................................ 949
BUYBACKSOne Heckuva Bull Market ...................................................................................................................................................... 951
BUYBACKS - The US Equity Bubble Depends On Corporate Buybacks; Here's the Proof ....................................................................... 952
BUYBACKS - Why Markets Are Manic - The Fed Is Addicted To the "Easy Button" ................................................................................. 956
BUYBACKS - When $140 Billion In Buybacks Isn't Enough... .................................................................................................................... 958
BUYBACKS - "Obsessive" Buybacks Could Be Big Mistake, "Serious" People Tell Unserious People .................................................... 958
BUYBACKS - Q3 Buybacks Surging, These Are The Top 20 Repurchasers Of Their Own Stock ............................................................ 962
BUYBACKS - Accounting Magic .................................................................................................................................................................. 964
BUYBACKS - The largest source of overall US equity demand in recent years......................................................................................... 966
BUYBACKS - Has Boosted Median Earnings Growth by 100 bps for S&P 500 ......................................................................................... 969
BUYBACKS - Companies Spend Almost All Profits On Buybacks ............................................................................................................. 974
BUYBACKS - Buyback At Biggest Pace Since 2007 .................................................................................................................................. 979
BUYBACKS - Buyback Party Slowing ......................................................................................................................................................... 981
BUYBACKS - Buyback Party Slowing ......................................................................................................................................................... 986
THE $2T TAX RUSE Its a Free Ride for US Corporations ......................................................................................................................... 991
UNPRECEDENTED BUYBACKS LEVELS ................................................................................................................................................. 991
A FREE TAX RIDE....................................................................................................................................................................................... 993
GENERIC TAX EXAMPLE ........................................................................................................................................................................... 993
CHARTS OF NOTE ............................................................................................................................................................................................... 998
CHARTS Finance the Biggest Source of Corporate Funds rising from 19% to 30% .................................................................................. 998
CHARTS Average Age of Private Fixed Assets ........................................................................................................................................... 999
CHARTS Percent of Families With Business Equity .................................................................................................................................... 999
CHARTS Percent of Families With Business Equity .................................................................................................................................. 1000
CHARTS New England Patriots NFL Franchise Valuation ....................................................................................................................... 1001
CHARTS US Equity Market is Not Outgrowing the Economy AS Measured by the Coincident Indicator ................................................ 1002
CHARTS Deviation of Earnings Above / Below Long Term Growth Trend ............................................................................................... 1003
CHARTS S&P 500, Moodys Baa Corporate & 30Y UST Yields ............................................................................................................... 1003
CHARTS Corporations Carrying Higher Levels of Leverage than a Few Years Ago ................................................................................ 1004
CHARTS US Corporate CFROI (Cash Flow ROI) ..................................................................................................................................... 1005
CHARTS Weakening Sector Retunrs ......................................................................................................................................................... 1005
CHARTS SPX, Corporate Profits versus Employed Population % ............................................................................................................ 1006
CHARTS Executive Incentives Distort Earnings ........................................................................................................................................ 1006
CAPITALIZATION Market Capitalization as a % of Nominal GDP ............................................................................................................ 1007
CAPITALIZATION Market Capitalization Adjusted by Gold and CPI ......................................................................................................... 1008
CAPITALIZATION Market Capitalization versus Total Federal Reserve Assets ....................................................................................... 1009
CAPITALIZATION Total Market Capitalization versus M2 ......................................................................................................................... 1010
CAPITALIZATION Total Market Capitalization versus Monetary Base ..................................................................................................... 1011
CAPITALIZATION Total Market Capitalization versus Gross Federal Debt .............................................................................................. 1012
CAPITALIZATION Market Capitalization Ratios ........................................................................................................................................ 1013
CAPITALIZATION Regional Corporate Loss Comparisons Problems in Japan..................................................................................... 1013
CHARTS 7 Year Total Return Cycle .......................................................................................................................................................... 1014
CHARTS Profit Margins Shrink as Proportion of GDP ............................................................................................................................... 1014
CHARTS Q1 Earnings Pre-Announcements .............................................................................................................................................. 1015
CHARTS Q1 Earnings Taken Down Dramatically ..................................................................................................................................... 1015
CHARTS Q1 Earnings Already Taken Down By 5% since January .......................................................................................................... 1016
CHARTS Positive & Negative Q1 Pre-Announcements ............................................................................................................................ 1016
CHARTS Q1 Revenue Slippage in Last 60 Days ...................................................................................................................................... 1017
CHARTS Forward 12 Month EPS vs Price: 10-Year ................................................................................................................................. 1018
CHARTS Forward 12 Month EPS vs Price: 10-Year ................................................................................................................................. 1018
RESEARCH OF NOTE ........................................................................................................................................................................................ 1020
FUNDAMENTALS A Bad Equilibrium & How Speculative Distortion Ends ............................................................................................... 1020
FUNDAMENTALS Valuations .................................................................................................................................................................... 1028
FUNDAMENTALS Corporate Profits Vaporizing ........................................................................................................................................ 1033
FUNDAMENTALS Fundamentals No Longer Currently Matter - Proof ..................................................................................................... 1037
FUNDAMENTALS Profit Margins - Is the Ladder Starting to Snap? ......................................................................................................... 1038
FUNDAMENTALS The Great PE Multiple Expansion of 2011-2014 ......................................................................................................... 1045
FUNDAMENTALS Stocks Have Never Been More Expensive Based On Long-Term Growth Forecasts ................................................ 1049
FUNDAMENTALS Long Term Return Trends ........................................................................................................................................... 1051
FUNDAMENTALS Profit Margins Contract as a Percentage of GDP ........................................................................................................ 1053
FUNDAMENTALS Stagnant Wages a Major Contributor to Profits ........................................................................................................... 1055
FUNDAMENTALS Worsening risk/reward fundamentals in US corporate credit ...................................................................................... 1057

TARGETS .............................................................................................................................................................................. 1061


CONCLUSIONS..................................................................................................................................................................... 1066
MARKET MESSAGE ........................................................................................................................................................................................... 1066
I DEFINING CHARTS ....................................................................................................................................................................................... 1075
Defining Chart #3 - The Big M and Super Cycle b ................................................................................................................................... 1076
Defining Chart #4 Intermediate Term Topping Process ............................................................................................................................. 1077
II TARGETS ...................................................................................................................................................................................................... 1088

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III QUARTERLY SENTIMENT RISK AND FUNDAMENTALS ......................................................................................................................... 1093


NEW-SENTIMENT ........................................................................................................................................................................................ 1093
NEW-RISK ANALYSIS - Complacency ........................................................................................................................................................ 1101
NEW-FUNDAMENTAL ANALYSIS Valuation Summary............................................................................................................................ 1102
IV STUDIES ...................................................................................................................................................................................................... 1103
MARKET BOUNCE A Retracement or Market Turn?....................................................................................................................................... 1103
CHARTS OF NOTE ....................................................................................................................................................................................... 1103
NEW-BOUNCE Credit and Equity Will Converge. ................................................................................................................................. 1103
NEW-BOUNCE Value Line Geometric Composite Short Term A 38.2% Retracement ................................................................... 1104
NEW-BOUNCE Value Line Geometric Composite Long Term A 38.2% Retracement with 23.6% Bounce ................................... 1104
NEW-BOUNCE Bear Market Rally Trend Support Line Is Gone ........................................................................................................... 1105
NEW-BOUNCE AAII Investor Sentiment Bears/Bulls Triggered a BUY at the recent market lows ...................................................... 1106
NEW-BOUNCE Percent of S&P 500 Stocks above 50 and 200 DMA ................................................................................................... 1106
NEW-BOUNCE NYSE Overbought / Oversold....................................................................................................................................... 1107
NEW-BOUNCE Trend Channel Now Down ........................................................................................................................................... 1107
NEW-BOUNCE Important Overhead Resistance ................................................................................................................................... 1108
Q1 EARNINGS Earnings Estimate Reductions ................................................................................................................................................ 1109
STUDY: Q1 EARNINGS - .................................................................................................................................................................................... 1109
CHARTS OF NOTE ....................................................................................................................................................................................... 1109
NEW-Q1 EARNINGS Largest S&P Q1 EPS Drop in first 2 Mo of a Quarter Since Q1 2009 ................................................................ 1109
NEW-Q1 EARNINGS S&P 500 Earnings Growth Q1 2016 Down -8.3% .............................................................................................. 1109
NEW-Q1 EARNINGS S&P 500 EPS: GAAP vs. Non-GAAP ................................................................................................................. 1110
NEW-Q1 EARNINGS S&P 500 EPS: GAAP vs. Non-GAAP for FY 2015 vs. 2014 .............................................................................. 1110
NEW-Q1 EARNINGS Non-GAAP EPS Writeoffs ................................................................................................................................... 1111
NEW-Q1 EARNINGS 2015 Y-o-Y % Change in EPS GAAP vs Non-GAAP ......................................................................................... 1111
NEW-Q1 EARNINGS S&P Trailing 4-Quarter GAAP vs. Non-GAAP Net Margins ............................................................................... 1112
BUYBACKS Slowing Due to Debt-Credit Rating Concerns ............................................................................................................................. 1113
STUDY: BUYBACKS ........................................................................................................................................................................................... 1113
CHARTS OF NOTE ....................................................................................................................................................................................... 1113
NEW-BUYBACKS Cost of Buybacks In Increasing ................................................................................................................................ 1113
NEW-BUYBACKS BoAML Corporate Clients Buybacks in the First 9 Weeks of Each Year ............................................................. 1113
NEW-BUYBACKS BoAML Corporate Clients 4 Wk Average Buybacks Y-o-Y % Change ................................................................... 1114
NEW-BUYBACKS Buybacks Have Accounted for Around 1/3 of EPS Growth Since Q3 2011 ............................................................ 1114
GOVERNMENT STOCK BUYING Governments Increasingly Buying the Equity Markets ............................................................................. 1115
STUDY: MANIPULATION .................................................................................................................................................................................... 1115
RESEARCH OF NOTE .................................................................................................................................................................................. 1115
NEW- MANIPULATION Hungary Central Bank Will Prop up Economy By Boosting Stock Market ...................................................... 1115
NEW- MANIPULATION China is getting into the venture capital business in a big way ....................................................................... 1116
NEW- MANIPULATION JPMorgan: "The ECB Could Purchase Equities Next" .................................................................................... 1117
US RECESSION RUMBLINGS ........................................................................................................................................................................... 1119
CHARTS OF NOTE ....................................................................................................................................................................................... 1120
NEW-RECESSION A US Recession is now a VERY Likely Outcome! ................................................................................................. 1120
NEW-RECESSION Manufacturing Indicators & Industrial Production In Recession Territory ............................................................. 1121
NEW-RECESSION The Real Employment Economic Picture & Recessionary Driver ......................................................................... 1121
NEW-RECESSION Inflation Creeping Into Recessionary Statistics ..................................................................................................... 1122
NEW-RECESSION 15-month Continuous Y-o-Y drop in Factory orders Historically Has Signaled A Recession for 60 Years ........... 1123
NEW-RECESSION Productivity Slows As Recoveries Age (Y-o-Y%) ................................................................................................... 1123
NEW-RECESSION St.Louis Recession Probability ............................................................................................................................... 1124
NEW-RECESSION Recession Probability Based on Probit Model ....................................................................................................... 1124
NEW-RECESSION Recession Probability The Economic Output Composite Index .......................................................................... 1125
NEW-RECESSION Recession Probability HY Spreads Have not Traded at Current Levels Outside a US Recession .................... 1125
NEW-RECESSION Recession Probability Market Sentiment Can Become A Driver of Recessions ................................................ 1126
NEW-RECESSION Recession Probability Inflation tends to Rise Into and During a Recession ....................................................... 1126
NEW-RECESSION Wholesale Inventories -to - Sales ........................................................................................................................... 1127
NEW-RECESSION S&P Trailing 4-Quarter GAAP vs. Non-GAAP Net Margins ................................................................................... 1127
NEW-RECESSION We are already in a US GDP Recession ................................................................................................................ 1128
NEW-RECESSION HY Close to 2001 Recession Levels ...................................................................................................................... 1128
NEW-RECESSION Industrial Production Is Rolling Over ...................................................................................................................... 1129
NEW-RECESSION US Recession Cycle Suggests Economic & Earnings Cycle May Be Close To Ending........................................ 1130
V - TRIGGER$ ZONES ........................................................................................................................................................................................ 1131
VI - DRIVER$ & BIA$ ........................................................................................................................................................................................... 1132

15

MARCH 2016 Edition


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