On the RUT 60 min chart, its RSI-14 is currently above the 70 line.

The last time this occurred was on June 9th, just before a 2.4% short-term pullback in the RUT index that ended early in the morning of the 16th. 

The NDX has an RSI-2 of more than 99.7% and an RSI-4 of more than 92% at the moment - a combination that statistically has lead to a short-term pullback in that index as well. 

Elliot Wave Trader thinks that the top may be near - always interesting to read forecasts like this to see if they have any merit at all. 

http://slopeofhope.com/2017/07/calling-for-market-top-within-the-next-three-weeks.html#more-67666

A lot of today’s strength in the performance of the FANG stocks on an equal-weighted basis is the fact that shares of Netflix (NFLX) are up over 12% following its strong earnings report after the close last night.  NFLX has a much smaller market cap than the three other stocks that make up the FANG group, but even on a market cap weighted basis, the four FANG stocks are still at new highs.  As shown below, a market cap weighted index of the four stocks has also more than erased what in this case was a 7% pullback and is also trading at new highs today.  So much for the death of FANG.

Bespoke developed a proprietary stock strategy to compete with the benchmark S&P 500 - the "Bespoke 50". Since its inception on 3-1-12 it is up 122.1% compared to the S&P's 76.0% (see below). After a one free month introduction, Bespoke will charge you $99 a month for its information. Its website calls this "a great deal".

Without the advisory charge the Bespoke 50 takes $10,000 and turns it into $22,210 since 3-1-12. Recognizing that the current Spy Pro signals weren't in real time back in March 2012, the back tested trading dates do outperform the Bespoke approach by a wide margin. Without the $50 monthly fee for BPT being considered, a $10,000 initial hypothetical investment does compound to $49,202 using the Rydex unleveraged Russell 2000 long/short funds. No benefit was considered for cash, and no trading costs were considered in either example.

Someone willing to take more risk and use the 200% leveraged RUT funds would have seen their hypothetical account grow to $166,925. My understanding  of the Bespoke 50 is that the strategy is invested in 50 stocks 100% of the time. Obviously the Spy Pro approach would have been in cash for a reasonable amount of time during this time frame - helping to reduce the inherent investment risk during this period of time.

Of course, depending on the size of the account vale invested in the Bespoke 50, the $99 monthly fee over the past 5.26 years, and the trading costs could certainly have reduced the net account value to less than just holding an S&P 500 index fund on a buy and hold basis in a low cost no-load fund or etf. Also to be considered is the cost of liquidating 50 individual stocks in case you wanted to redeem the account vs just selling SPY, IWM, QQQ, etc.

Apple could buy Disney and pay CASH

The chart below shows the S&P 500’s current and average annualized total returns over the last one, two, five, ten, and twenty years.  The last year has been fantastic for the bulls.  With a gain of just under 18% on a total return basis, the S&P 500 has exceeded its average 12-month return by more than 800 basis points (bps).  Those are extremely solid returns, but over other time frames, the returns aren’t nearly as good.  For example, in the last two years, the S&P 500 has delivered an annualized gain of 10.7%, or only slightly more than the historical average of 10.4%.  On a five-year time frame, returns are once again above average (14.6% vs 10.3%), but then when we go out over the last ten and twenty years, the 7.2% annualized return falls more than 300 bps short of the historical average.

https://realinvestmentadvice.com/technically-speaking-how-big-could-a-correction-be/

An Ominous Sign for the US Economy

Speaking in an exclusive interview with  Mauldin Economics, Lacy Hunt addressed the Federal Reserve’s current monetary tightening cycle: “Whether they [raise rates] is immaterial because already they have engineered a contraction in [credit]… all major categories of bank lending are slowing.”

“Since 1915, of the 18 recessions, all of them, bar one, were preceded by monetary tightening… the Fed is on very thin ice.”

The  last few days have seen the biggest outflows from S&P 'growth' ETFs
on record, and as Deutsche Bank AG’s chief global strategist, Binky
Chadha, notes  the cheapest U.S. stocks relative to earnings, sales and
assets are poised to turn the tables on faster-growing peers...

In a report Wednesday, Chadha cited three reasons for a rebound. The first was  the ratio between the S&P 500 Pure Value and Pure Growth indexes since 2010, which indicates value shares have room to  recover from a first-half slump.

The $VVX:$VIX ratio is currently below 1.00 - recently this same level appeared on 5-17 and set off a nice rally starting on May 18th

In my post yesterday I indicated that using the listed Spy Pro trades in 2016 with XIV/VXX would have taken $10,000 on 1-1-16 to approximately $100,000 on 12-31-16. I made a calculation error on a trade that needs to be corrected. The actual number on 12-31-16 should have been $69,696.73. My apologies for my Senior moment - it was NOT intentional. 

Since I usually trade Rydex funds instead of etf's for my SPro signals, there is a 10:45 exit time for the index funds that I trade. Looking at the AM history for this Russell 2000 long fund, I found that waiting to exit a Spy Pro long trade until the 4:00 close made more money than the AM trade time 48 of 86 times or 55.8% of the time.

Looking back through history, the evidence is quite compelling that from the time the first rate hike is induced into the system,  it has started the countdown to the next recession.  However, the timing between the first rate hike and the next recession is dependent on the level of economic growth at that time.

When looking at historical time frames, one must not look at averages of all rate hikes but rather what happened when a rate hiking campaign began from similar economic growth levels.  Looking back in history we can only identify TWO previous times when the Fed began tightening monetary policy when economic growth rates were at 2% or less. There is a vast difference in timing for the economy to slide into recession from 6%, 4%, and 2% annual growth rates

With economic growth currently running at THE LOWEST average growth rate in American history,  the time frame between the first rate and next recession will likely not be long.