Over the years I've highlighted a few of the major "turning point" indicators I've watched over the course of my involvement with the equity markets. One of those that I found years back was the relationship that has held between the overall markets and that of Sotheby's. I guess Sotheby's is a perfect example of disposable income at its best sort of like a Tiffany's or other high end retailer.
The redish line is (BID), while I've added the SPX behind in black. BID seems to be an early turn indicator in the last two major swoons in early 1999 and also in late 2007, I've marked those in blue. Late in 2012 again has presented us with a major turn signal where BID certainly has fallen, yet in this Fed stimulated world.... SPX continues to fly (marked in red at the far right of the chart).
While the overall markets "should" according to this two instance example begin to turn, it might just be a safer bet to short BID and just forget about shorting the overall market. Are we even allowed to short anything? Tomorrow's employment report will be interesting as we've heard from the Fed that they are willing and able to pump to the moon, as labor participation rates continue to decline, unemployment figures seem to improve as well. I'm very interested to see what happens when the unemployment trap is set and the Fed needs to restate that they didn't really mean that they would really stop stimulating when the unemployment rate actually gets in the high 6% range.
As with everything, I'm sure we'll just have a new set of rules or a new boogey man that will require unlimited printing and liquidity-less liquidity.
GOATMUG
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