Cross-Asset Strategist & Quantitative Analyst, Pennock Idea Hub

Cam Hui

Cam Hui has been professionally involved in the financial markets since 1985 in a variety of roles, both as a quantitative equity portfolio manager and as a sell-side analyst. He graduated with a degree in Computer Science from the University of British Columbia in 1980 and obtained his CFA Charter in 1989.

Cross-Asset Strategist & Quantitative Analyst

RRG Proprietary Measure of Sentiment @ Unsustainable Level - Set to Fall Dragging Equities Lower

Pennock Idea Hub

We are creators of independent equity research. The Pennock Idea Hub team are veterans of the investment industry. Much of our team has spent their careers at Merrill Lynch, Deutsche Bank, RBC Capital Markets and Wood Gundy. We have taken every aspect of research back to the studs and returned to first principles. The Pennock Idea Hub marries the interests of the sell and buy side. 

We offer the best research for institutional investors by:

-Only publishing research from veteran analysts
-Eliminate the inherent conflicts of the traditional sell and buy side relationship
-Ensure our team is always accessible; collaboration with clients nurtures our collective success

Cross-Asset & Quantitative Research

Thematic (Sector/Industry)

United states / Thematic (Sector/Industry)

We continue to encounter resistance to our recent bearish calls (see <a href="https://www.smartkarma.com/insights/a-major-market-top-ahead" target="_blank">A Major Market Top Ahead</a>), and that was even before the major indices broke out to fresh record highs. To reiterate, the cautiousness was triggered by both technical and macro considerations. Most importantly, the Wilshire 5000 is exhibiting a negative divergence on the monthly chart, which has foreshadowed important market tops in the past.<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/061/898/original/WLSH.png?1535375493" class="editor-image img-responsive" data-smartkarma-image-id="61898"></figure>In addition to the bearish technical indicators we cited three weeks ago, a number of other warnings have appeared indicating intermediate-term cautiousness for equity investors.We find there are at least 10 separate and distinct technical warning signs that a major market top is forming. One of the adages of technical analysis is while bottoms are events (because of emotionally laden panics seen at bottoms), tops are processes (as complacency and technical deterioration set in). We interpret current conditions as the U.S. equity market undergoing a topping process. While stocks are unlikely to crash tomorrow, investors should be prepared for the bears taking control of the tape in the not-too-distant future.

We continue to encounter resistance to our recent bearish calls (see A Major Market Top Ahead), and that was even before the major indices broke out to fresh record highs. To reiterate, the cautiousness was triggered by both technical and macro considerations. Most importantly, the Wilshire 5000 is exhibiting a negative divergence on the monthly chart, which has foreshadowed important market tops in the past.In addition to the bearish technical indicators we cited three weeks ago, a number of other warnings have appeared indicating intermediate-term cautiousness for equity investors.We find there are at least 10 separate and distinct technical warning signs that a major market top is forming. One of the adages of technical analysis is while bottoms are events (because of emotionally laden panics seen at bottoms), tops are processes (as complacency and technical deterioration set in). We interpret current conditions as the U.S. equity market undergoing a topping process. While stocks are unlikely to crash tomorrow, investors should be prepared for the bears taking control of the tape in the not-too-distant future.

10 Or More Technical Reasons To Be Bearish