Monday, January 29, 2024

SPX, BKX, COMPQ: Credit Delinquencies Rise with the Market

Last update noted that it was "still bulls' ball" and SPX made another new high since then, but appears to have done so in three waves so far.  This means that even if it drops a bit immediately, it will probably need to head back up and resolve that imperfect high shortly thereafter:

COMPQ continues to have the same appearance in that regard, but at a slightly larger scale:

Last update showed data indicating that the "bull market" since 2022 has been very narrow, largely being driven by only 7 stocks (AMZN, TSLA, NVDA, MSFT, GOOGL, AAPL, and META), and a look at the chart of, for example, BKX confirms that bank stocks still remain heavily depressed from the 2022 highs.  This chart also serves as a reminder that it's still quite possible for this party to be relatively short-lived.

Another interesting bit of data shows that while mortgage delinquencies remain very low (in keeping with my April 2022 thesis that the fundamentals do not support a "housing crash" anytime soon), delinquencies on credit cards and auto loans have been rising steadily since 2022.

In conclusion, bulls still appear to have more new highs on the horizon one way or another, but whether all this is going to be a (relatively) short-lived celebration remains to be seen.  Trade safe.

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