Carter Worth On The Markets.
This from Carter Worth over at Oppenheimer yesterday. Carter is a very good technician so it pays to listen to what he says. {Excerpt}
"An impressive 40-session advance... one of the most impressive in history. Two months straight up... March 6th to May 6th (where are we right now). S&P 500 from 666.79 to 907.70... +241 points... +36.1%.
{Below we}....attempt to 'dissect' the underlying performance of the S&P 500... the performance of the stocks in the index based on several key indicators.
To wit: We've divided the 500 stocks into quartiles based on Profitability (return on equity and net profit margin), based on Earnings Growth, based on Revenue Growth, based on Balance Sheet leverage (long-term debt as a % of total Capital), based on Sector and so forth and so on.
What you will find is how clearly 'delineated' the performance has been. To wit:
The companies with the lowest profitability have performed the best while the companies with the highest profitability have performed the worst. The companies with lowest quality balance sheets have performed the best, while those with the highest quality balance sheets have performed the worst. And it goes on... the companies with the lowest profit margins have performed the best, while those with the highest profit margins have performed the worst... the companies with the lowest EPS growth over the past 12 months have performed the best, while those with the highest EPS growth have performed the worst.....
What you will find is how clearly 'delineated' the performance has been. To wit:
The companies with the lowest profitability have performed the best while the companies with the highest profitability have performed the worst. The companies with lowest quality balance sheets have performed the best, while those with the highest quality balance sheets have performed the worst. And it goes on... the companies with the lowest profit margins have performed the best, while those with the highest profit margins have performed the worst... the companies with the lowest EPS growth over the past 12 months have performed the best, while those with the highest EPS growth have performed the worst.....
....... As to where we ourselves stand right now: we "got off the ride" when the S&P 500 touched the 875 level.
Because... 1) that is the level of the well-defined intermediate tops since January (see chart below and green line drawn. And 2) that is the level where the declining 150-Day moving average first came into play (see second chart below).
Because... 1) that is the level of the well-defined intermediate tops since January (see chart below and green line drawn. And 2) that is the level where the declining 150-Day moving average first came into play (see second chart below).
Full report:
posted by CR English at 3:32 PM
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