Posts filed under “Contrary Indicators”
Jack Duval of Original forensic analysis + visualization points out the inverse correlation between FINRA arbitrations and market peaks:
“[Above] is a visualization of annual Finra Arbitration Filings as compared to the S&P 500 annual closing value. Since 1999, there is a significant negative correlation of -0.594 between the two. When arbitration filings have peaked it has been a buy signal, and vice versa.
On the lower pane of the viz, I have plotted the annual Finra Arbitration Filings and colored the marks by the number of claims involving suitability. Clearly, as suitability claims have waned, the market has topped out. (Note the 2012 data is through September.)”
It looks to be a cycle that accidentally relies on mean times between market peaks, and an attenuating number of new arbs filed by disgruntled customers. Regardless, its an unusual indicator and one worth watching.
Jack blogs at ofav.pro/blog/.
Warning! Finra Arbitration Filings Down, S&P 500 Up
Original forensic analysis + visualization October 17th, 2012
Each year on the Big Picture, the blog I call home, I update my top trading rules and aphorisms. It’s a collection I have gathered over the years of my favorite trader, analyst, economist and investor viewpoints on what — and what not — to do when it comes to investing in the capital markets….Read More
Way back in the Summer of 2003, I wrote a report that analyzed the Contrary Indicators 2000 – 2003 Bear market. It consisted of both internal and external signals that strongly suggested that the 2000 crash was over, and it was safe to get back into equities. The second of the external signals was that…Read More
The only major global equity index which we monitor — and it is a big one – that is down for the year is the Shanghai Composite. The chart looks ugly and ready to break to new lows after its post crash peak of 3,477, way back in August 2009. The Shanghai is down 39.2…Read More
Yesterday in the office, we were discussing when to take a little something off of the table. This upthrust has been very strong (itself a positive), but we tend to be wary when rallies are seemingly built on rumors. The 19th trial balloon of some new ECB intervention should not trump slowing fundamentals and peaking…Read More
So I am still catching up with some of the more interesting reads from while I was away, and this THIS damned cover made me fall off my chair: Source: Barron’s A few words about this: The classic magazine cover contrary indicator is a non-business press issue. This is because by the time…Read More
Over the years, debate has waxed and waned over the effects of the minimum wage and/or immigration policy on employment, particularly teen/youth employment. When the issue flared up most recently, a couple of years ago, I posted a rebuttal to that argument here, my point being that it was – at least this time around…Read More
Following up on a previous matter, Karl Denninger posted what is supposed to pass for a rebuttal to my recent post on government spending. To my eyes, as Jay Bookman so aptly put it, it looks like “the octopus trick, squirting black ink to cloud your retreat.” True enough. Anyway, done with that discussion. Paul…Read More
>; Update: the Gallup poll used the word “Best” not “Safest”. Jordan Weissmann has a fascinating discussion going on at the Atlantic about a recent Gallup poll regarding “safe investments.” (The full discussion is well worth your time). Its appears that a plurality of “Americans believe Gold is the single safest long term investment option.”…Read More