This indicator flashed warnings in 2000 and 2007 — and it’s buzzing now

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They don’t ring the bell at the top, the expression goes, but here’s an indicator that 2000 and 2007 topped.

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It has to do with margin loans. Margin loan growth falls from higher levels, triggering a sell alert, according to Ned Davis, senior investment strategist at Ned Davis Research. When the 15-month rate of change in margin loans falls below 48%, the market was down on average three to 18 months later.

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Another warning sign is that the price-to-earnings ratio is inflated on what firms call institutional grade stocks.

Yet Davis can’t bring himself to completely cover himself in pessimism. He says the short-term sentiment is still negative, which is generally a good sign for the markets.

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“However, I will note that after any rally, breaking the December lows is often a warning sign. So we will be watching the year-end rally closely.” The S&P 500 touched its 12th month low on December 3, when it peaked at 4,495.12.

Chart

This is already out of date, but this chart is showing the all time highs for the S&P 500 SPX,
+0.14%
The chart of the year was chosen by Ryan Detrick, chief market strategist at LPL Financial. The benchmark US index hit a record high of 70, the highest number since 1995. “At the end of the day, the fact that 2021 had the second highest ever level probably tells the story better than almost any other,” he said.

buzz

US President Joe Biden and Russian President Vladimir Putin are scheduled to call at 3:30 p.m. Eastern according to a White House schedule to discuss tensions in Ukraine.

Johnson & Johnson JNJ,
+1.11%
said its vaccine as a booster shot was 85% effective in preventing hospitalizations in South Africa as Omicron became the dominant coronavirus variant.

Wearing an outdoor mask will be mandatory in Paris, as England prepares hospitals for an Omicron wave. The daily average of US coronavirus cases topped 300,000, with hospitalizations at a two-month high.

The final economic indicators of the year with weekly jobless claims are due and the December Chicago Purchasing Managers Index Report is scheduled for release.

Samsung Biologics 207940,
+1.46%
denied a report that it was in talks to buy Biogen BIIB,
+9.46%,
That sent the biotech stock 5% lower in premarket action after a 9% jump on Wednesday.

Didi Global Didi,
-8.18%
said revenue fell 11% from the previous quarter, as its operating loss widened.

Credit Suisse CS,
-1.23%
The second violation of COVID-19 rules by its chairman was found, Reuters reported, citing sources.

Ghislaine Maxwell was convicted of five of six charges in the Jeffrey Epstein sexual assault case.

Market

US Stock Futures ES00,
+0.18%

NQ 00,
+0.25%
There were a touch more. Yield on 10 Year Treasury TMUBMUSD10Y,
1.532%
was 1.53%.

With Bitcoin BTCUSD, the cryptocurrency space continues its month-long struggle,
+0.57%
is trading below $47,000.

top ticker

Here are the top tickers on Businesshala as of 6am.

anchor

security name

TSLA,
-0.21%

Tesla

AMC,
+0.83%

AMC Entertainment

GME,
+5.10%

GameStop

DXY,
+0.15%

US Dollar Index

TMUBMUSD10Y,
1.532%

US 10 Year Treasury

DJIA,
+0.25%

Dow Jones Industrial Average

NIO,
-4.66%

NIO

NAKD,
+14.57%

nude brand

ES00,
+0.18%

E-mini S&P 500 Futures

AAPL,
+0.05%

Apple

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