Money and Finance
- Hussman Weekly Market Comment: A Hint Of Advance Warning
Link to: A Hint of Advance Warning The key point is this: after an extended and extreme compression of risk premiums, we’re now observing increasing divergences across a variety of market internals and security types (e.g. breadth, leadership,...
- Hussman Weekly Market Comment: Low-water Mark
As of Friday, our estimates of prospective return/risk for the S&P 500 have dropped to the single lowest point we’ve observed in a century of data. There is no way to view this as something other than a warning, but it’s also a warning that I...
- Hussman Weekly Market Comment: No... Stop... Don't.
As of Friday, the S&P 500 was at about the same level as at the end of February. I noted then that our estimate of potential market losses over an 18-month window was in the worst 1.5% of historical observations. More recently, we've observed...
- Hussman Weekly Market Comment: Hard-negative
With the exception of extreme market conditions (see Warning- Examine All Risk Exposures , and Extreme Conditions and Typical Outcomes ), I try not to wave my arms around about near-term market risks, but I think it's important to cut straight to...
- Hussman Weekly Market Comment: Don't Mess With Aunt Minnie
Over the years, I've noted that certain subsets of market conditions - occurring together - are associated with very specific outcomes, such as oncoming recessions, abrupt market weakness, strength in precious metals, and so forth. Such indicator...
Money and Finance
Hussman Weekly Market Comment: A Warning Regarding Broken Speculative Peaks
Frankly, I wonder whether any amount of arm-waving will incline investors to actually examine their risk exposures here, much less consider the prospect of a 40%+ decline in the S&P 500 Index that would be required simply to bring stocks to historically run-of-the-mill valuations. But at a time when our estimates of prospective risk are surging, I would be remiss not to observe that fact.
At present, we have what might best be characterized as a broken speculative peak, in that market internals (particularly interest-sensitive groups), breadth and leadership have broken down uniformly following an extreme overvalued, overbought, overbullish syndrome. If you recall, the market also recovered to new highs in October 2007, weeks after the initial, decisive break in market internals at that time. Presently, we’re looking at the same set of circumstances. On some event related to tapering or the Fed Chair nomination, we may even see another push higher. It isn't simply short-term risk, but deep cyclical risk that is of concern.
My main goal here is to encourage investors to look carefully at their investment positions, before they lose the chance to alter them advantageously. As I noted in the October 15, 2007 market comment Warning – Examine All Risk Exposures:
“Whatever market exposure investors accept today ought to be the same market exposure that investors are committed to maintain for the duration of a bear market, without abandoning their investment plan. Investors with no plan to own stocks through a market decline, holding them only in the hope of selling at market highs, may discover in hindsight that these were them.”
- Hussman Weekly Market Comment: A Hint Of Advance Warning
Link to: A Hint of Advance Warning The key point is this: after an extended and extreme compression of risk premiums, we’re now observing increasing divergences across a variety of market internals and security types (e.g. breadth, leadership,...
- Hussman Weekly Market Comment: Low-water Mark
As of Friday, our estimates of prospective return/risk for the S&P 500 have dropped to the single lowest point we’ve observed in a century of data. There is no way to view this as something other than a warning, but it’s also a warning that I...
- Hussman Weekly Market Comment: No... Stop... Don't.
As of Friday, the S&P 500 was at about the same level as at the end of February. I noted then that our estimate of potential market losses over an 18-month window was in the worst 1.5% of historical observations. More recently, we've observed...
- Hussman Weekly Market Comment: Hard-negative
With the exception of extreme market conditions (see Warning- Examine All Risk Exposures , and Extreme Conditions and Typical Outcomes ), I try not to wave my arms around about near-term market risks, but I think it's important to cut straight to...
- Hussman Weekly Market Comment: Don't Mess With Aunt Minnie
Over the years, I've noted that certain subsets of market conditions - occurring together - are associated with very specific outcomes, such as oncoming recessions, abrupt market weakness, strength in precious metals, and so forth. Such indicator...