Buying or Owning Stocks Is Now Dangerous: Stockman

Stockman seems to be a (legitimate) voice of reason amongst the crowd.

Mixed Economic Signals- The Trouble With Dividends

Despite the rosy outlook by economists and the Street, I think if you looked at little deeper than just the headlines you would see an economy that was just putting along. Although economic growth probably remains positive, that positioning looks precarious and all it could take to move into a retrenchment is some external event. For instance, a Fed tapering.

For instance, one measure I look at is the rolling three month summation of the number of S&P 1500 companies cutting dividends. The theory behind this is that companies will only cut dividends for one reason, pressure on their current business conditions and an outlook for these conditions to persist. A rolling three month summation is used to smooth out the quarterly fluctuations in the data. The following is the latest run of companies cutting dividends through the end of November.

The economy appears to be under stress whenever the count of companies cutting dividends is 50 or greater, This is clearly evident in the previous two recessions. Currently the count of the companies cutting dividends remains above 50 and continues to suggest an economy under stress if not full recessionary conditions.

Volume Off the High- Dec. 6 Trading Day Edition

A number of interesting movers on today's list. Aside from a few energy movers coming after the announcement of various and rumored asset sales, I wanted to mention one company in particular, COO. COO's shares declined after reporting earnings, missing EPS estimates by $0.32 and also missing revenue estimates. The stock may soon be shortable (if not already) with the gap open some $10+ lower from current prices.

Inflation/Deflation- Harry Dent vs. Peter Schiff

For a debate, Schiff and Dent appear to agree more than not. Still good though.

Federal Reserve, Not Free Market, Caused Crisis- Reason TV

I have not seen the movie but the film maker probably does not realize that the Philips curve has been disapproved time and again.

High Volume High- Dec. 6 Trading Day Edition

A few interesting moves, all of which I will not going over here. First, KMT moved to new highs on no apparent news outside of a better economic outlook with the upbeat jobs report. KMT is a economic sensitive company and the belief in a continued improvement probably sent the shares higher. However, 20% of the float is sold short. Someone does not believe in the story here. Second, DMND initially sold off after reporting earnings that missed estimates. However, the share price turned around and closed significantly higher on much higher volume.

One Step Back/One Step Forward- S&P Price/Volume Heat Map For Dec. 6 Trading Day and Week

In the last trading day of week, the S&P 500 soared, gaining about 110 basis points, after an apparently good jobs report was released. However and as I will detail later, the number of employed people continues to show negative acceleration versus the same period last year. More so, I think Friday's move was more of a relief rally that followed days on continued equity price losses. The data table below shows the extent of the snap back. 

Additionally, the price/volume heat map shows that extent of the volume gains and demand experienced across most of the market. That is except for some pockets of losses in the energy sector.

Week ending Dec. 6

Looking at the weekly figures, bears out that Friday's rally was more of a reversion to the mean event, as the S&P 500 essentially ended flat.

More so, the weekly supply/demand dynamics were muted at best. Technology shares showed some signs of strength on the trading week. The same goes for staples. This was while discretionary and energy shares saw an influx on the supply side. The latter was probably due to negative sentiment building for the retailers and talk of bloated holiday inventories.