E 15 Bear Market Charts

15 Reasons to be a bear:

The only real reason why the markets have gone up since 2009 is the Federal Reserve and its loose monetary policies. But, like any addiction, the phenomenon of tachyphylaxis kicks in, with diminishing returns. That seems to be catching up with the markets, and the bear seems to be waking up from hibernation. Here are 15 charts to demonstrate the bearish picture.

1. Margin Debt. The NYSE margin debt has now exceeded its highs from 2001 and 2007 (from Doug Short)

2. Commodities are signaling a weak global economy. GSG is now lower than the 2001 and 2008 lows (chart from stockcharts.com).

3. Tobin’s Q ratio is at historical highs, only eclipsed by 2001. 

4. Cape-Schiller ratio indicates market is overvalued, only eclipsed by 2001 and 1929.

5. “Buffett indicator” tells it is time to unload.

6. The Junk-debt to Treasury-debt spread suggests weakening economy and rising risk of default. 

7. Market sectors indicate a market top. 

8. Death Cross in the stock markets signal further losses.

9. Dow Theory flashed a sell signal.

10. Market Breadth is deteriorating.

11. Yet, optimism remains strong, which is a negative contrarian indicator.

12. McClellan indicator has gone negative

13. With aging population, the worker participation rate is dropping, leading to less spending down the road.

14. The Federal Reserve is leveraged 77:1, more than Lehman Brothers when it collapsed. How long can this go on?

15. Last, the 7 year itch kicks in in 2015.