Charts of the Market

Will cash flow growth for 2017 stablize or continue the recent downtrend in rate of growth?

Given the +10% growth in cash flow this year, and the projected 12% growth in the year 2018 over 2017, we would expect the anticipated future price of the market to be materially higher than the price today to justify making an investment today.  If we value the stock market based on current cash flows and cash flow growth we find that the projected future price, applying historically normal levels of risk, is actually below the current price.  In order to eliminate that negative difference between today’s price and the future price, the normal discount rate to account for risk should be 12.25%, yet the market is only reflecting an 8.8% discount rate.  Either the price today is too high, or the world has much less risk then history would suggest is the norm.

 

 

 

 

Contrast this chart with the one below from April 2017.  Economic malaise is setting in

 

With such great employment statistics you would think the United States economy would be running hot.  It is time to be very careful.

 

The turn down in the overall summation index and in the specific economic metric raise a large cautionary flag of sustainability in U.S. economic expansion

Is the current turn lower a sign of future weakness?

 

The over-stretched nature of the NASDAQ Index is very apparent from this Oscillator presentation that reveals the topping out area is where we presently are residing.