Weekend Charts: Rollover

NorthmanTrader

bullStocks rolled over on Friday and the context matters. And the context was good news in jobs was bad news. The market is sending one message loudly and clearly: It does not like coming rate rises. Why not? After all, past experience shows that initial rate raises are accompanied by raising stock prices. The simple truth is that we’re not seeing the growth that usually accompanies a rate raising environment.

Earnings expectations have come down hard for 2015. Yet ZIRP remains the principle backbone of this rally primarily by enabling the buyback bonanza. We have spoken about them ad nausea in recent weekend chart segments so I won’t rehash the concept here, but in many cases CEO’s are loading up company balance sheets with debt to reduce the public float of shares, thereby artificially inflating earning growth while personally enriching themselves selling their stock options into the rising prices. All under the auspice of shareholder value…

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