A 'rolling Bear Market' - has been a hallmark of technical indicators revealing internal (and insider) distribution, virtually throughout most of 2015. Starting in the 1st Quarter, when the market ran-into a projected 'brick-wall of resistance'; dropped and rebounded into the Spring in-line with our S&P pattern calls; and then gradually saw greater pockets of selling, while they rationalized optimism.

We called-out this market as an historic distribution masked by a 'rearranging of deck chairs' on a potential Titanic; and expected the most notable correction to commence after early-mid July, while I would be cruising the Mediterranean (and not on the White Star Line.. operator of Titanic). The market complied in late July and August; projected to decline more aggressive upon my return (it was kind to wait, though I did regular daily commentary while traveling); result: a superb series of downside gains; despite encountering stronger than typical rebounds I called 'automatic rally' in September and October. That bolstered a feeling of market immortality which became even more 'reckless abandon' by the Bulls in recent weeks; so we forewarned November wouldn't be October. 

It was not 'sudden onset' of North Atlantic chills near ice floes; this was clearly telegraphed as an 'SOS' from the narrower universe of stocks (one momentum favorite after another falling overboard) all through the recent so-called upward thrust. Why are people acting 'as if' this is a surprise or something new? The rolling Bear is at least 8 months old; perhaps why many frigid funds melted.

That iceberg ahead was shielded by 'pretending' a solid domestic growth rate (in earnings and USA GDP) was coming; which never materialized. And just incidentally, all year we pointed-out no factual basis existed for the outlandish bullish guidance many relied upon. The charts (like the Atlanta Fed GDP Now) warned for many months that strong growth was the mirage, not the iceberg. I shared all this not as an 'opinion' but as evidence that the illusive big recovery wasn't there; any more than last week's Jobs number was 'really' bullish.  

That's because the largest leveraged advance in history, unaccompanied by a comparable advance in 'real' profitability; had an associated 'canine aroma', as a bull market in buybacks, often leveraging shareholders with indirect debt by the associated bond offerings, reducing floating supply or enhancing earnings superficially (often even if top-line revenue was mediocre), in many cases just saw sector-by-sector the market lose it's 'mojo' as we had assessed all along.

As the year evolved, through a series of 'range-bound' up and down moves (a lot of them around 2100 S&P close to where we are now), we primarily tended to short spikes rather than buy for them; and surprise, it worked superbly most of the time. Yes we maintained a bias, but a bias based on facts, not fiction. Of course markets without valid underpinnings, but with 'controlled' institutional or banking support, won't turn on a dime, but historically do so in time. 

That's why I termed the distribution a 'process', recalling our 'Epic Debacle' call of 2007 (escalated from a liquidity & credit crisis warning after 5 solid years of bullishness, coming off a crash low in 2002, which followed our 2000 call for a Spring break collapse) ... as that 2007 call preceded the Bear Stearns break, a rebound, and then the Lehman moment; all of which was also a process. As it unfolded, and even though the derivatives mess was evident and documented, it was almost impossible to get media or analysts to talk about it because they had a good thing going (after doubting our solid 5 years of bullishness) and did not want to consider it was drawing to an end. Slightly like this year perhaps.  

In sum- this year featured stocks (nearly invisibly unless you looked) 'dropping off' (lifeboat exits a money manager might use) while 'rotation' perpetuated the illusion of a sort of 'monster bull market'; a status the market was loosing even before the Fed's telegraphed decision to 'taper'. Wall Street tried to ignore, or even fight the Fed all through this; and even today some hold-out hope that a petrified Fed (they are because they waited too long to normalize as it's called) will be so scared of blame that they'll not move. Ah; but the majority guidance 'jig is up'; everyone knows how sloppy the global economic situation really is. 

In this environment, the risk is over-rotation (some even pitching 'Submerging' Asian markets, which are cheaper; but we warned of the 'crash in Shanghai', and don't see a stable foundation there or elsewhere for much recovery.. yet. If it were otherwise, you'd not have 'Baltic Dry' and shipping rates at new lows; a rather basic look we provided at 'facts' not wishful thinking. If there's icebergs, or a hurricane out there (thinking of the sad sailors on the American ship); one might not presume his navigational systems, or after-the-fact market analysis, will allow you to weave a course through the treacherous waters. Better to go around, or in our case, successfully fade rallies, not try to stretch old upside.

Bottom-line: it's not just Alcoa (AA) or Caterpillar (CAT), not just WholeFoods (WFM) or Twitter (TWTR); and not just Apple (AAPL) (though we've warned of delusions, high prices in Europe impacting sales even when I was in Paris and Amsterdam and focused on the impact of countering the currency rates... and on Apple we pounded often that with a split-adjusted bullish view from 57, we thought it a sale at 128-132 and said so virtually daily, with a goal of 80-100. Got it and after the rebound said it will likely be seen again; and we've pointed out the deteriorating technicals). 

Oh..and it's a bellwether stock. Apple will do great with iPhone 7 late next year I'm sure; and I love the 6sPlus for now. But in Asia and Europe it's too pricey outside of the elites (20% higher plus a 17-20% VAT tax in most places; so my roughly $900 US model is nearly $1400 in Paris; even higher in India now). Do I love Apple? Sure; at 57. With everyone on the same side of the ledger in it or any stock (or the market); guess what they do next even if not realizing? Hold or sell. Remember: 'Greater Fool Theory'. That's why we wouldn't buy it or any normal stock (or the S&P) at the highest levels; especially absent great growth on an accelerating rather than decelerating basis. Point made. 

So it's just 'spin' to hear people say 'well Apple will be a source of funds'. OK; but not so simple. Everything is a source of funds; and with fund fiscal years at this point behind, but not 'record dates' for distributional dividends, no money is coming in of consequence other than perhaps 'flight capital' from a nervous Saudi Arabia (sponsor of too much terror along with nemesis Iran for differing groups) or maybe China.

Where that leaves us is with the ongoing (longer-than-common) retention of a guideline 'trading' short-sale from December S&P / E-mini 2109 a week ago. I believe market behavior makes clear why we retain this status (see video and below), and believe that the bulls are trying to hold this last technical level for no other reason that concern a new 'vacuum' may lie below, and for which no lifeboat will be serviceable, since a newly sober Fed won't bail them out.            

Daily action -  reiterates that October's rebound gave a renewed false sense of security, as during this time many rating agencies and others that faltered in the Summer, decided to become candid and began lowering GDP and growth targets that made no sense previously, but which they had massaged heavily. 

As I grew fond of saying: the longer the distribution; the greater the risk if you pile excess equity prices back on, but don't remotely have concurrent gains in household income growth or corporate profitability. 'Facts' pushed us to fade rallies more than buy dips; a realization of the distribution; and we successfully caught virtually every drop this year, missed some rallies (but took preceding gains), and have no hindsight regrets, as we knew a 'monster bull' doesn't roll over easy; but like a dinosaur, nothing's protected from demise whether it's so bad as to result in extinction or not. 

(Discussion of intraday tactics for Wednesday and the implications; reserved for regular subscribers. In fairness to members; we also redact prior remarks.)

Prior highlights follow:  (these gave members a basis for the stance).

Technical deterioration - preceded the accelerated Monday decline, which is why I pointed-out the 'narrow universe of stocks' carrying most of the weight of the preceding early November ramp, which tried (to be other than hollow). 

Further, they won't talk much about the increasingly narrow group holding-up; it is convenient to blame this on 'Fed expectations', rather than reveal mostly a majority of money managers and strategists are well aware of a ever-narrower leadership profile, and all the internal 'bearish divergences' we recently noted.

Technically - we observed the unsustainable accelerated rising-tops pattern of the preceding first days of October; maintained our rather persistent (for an intraday trade) December S&P / E-mini guideline 2109 short-sale (more).

In Sum -  we won't be surprised to see more jockeying and infighting; but the contention that November would NOT replicate October is very much alive; as is the ongoing 2109 Dec. S&P short-sale, for now.            

Similarly our forecast Dollar strength renewal blossomed; I warned Friday that it again became a 'crowded trade' approaching 'par', so it would be normal to consolidate (duration redacted), as you don't get huge days like Friday, every day. Though bullish for over 2 years since 79-80 on the Index, while bearish on the Euro from 1.38-1.40 (now near 1.07) we also called dips and rallies earlier this year, when looking for consolidation; indicating 'no chance' for a big Dollar collapse or sustainable Gold rally (redacted) until otherwise noted.

Incidentally I was stunned at candor from none other than Paul Krugman in the New York Times. Rather than defend political correctness and a numbing of the entrepreneurial spirit, he actually tried (but couldn't specify) deep issues making the middle class uncomfortable. He actually inferred 'throwing more money' at issues may be insufficient to address creeping despair. Wow.    

The needle that may 'pop' the bubble - at least in credit markets is now the biggest of all bubbles globally; may not be obvious ones in rates or for China, or expanding parameters of global war against Islamist Jihadist barbarism. (Risks off radar screens, including charts on 'swaps', shipping etc.). 

Swap-spreads, that hardly anyone notices, are unambiguous indications of credit market malfunctions, if not outright distress.      

Treacherous times; processes evolve.

Enjoy the semi-holiday (bonds closed), and take a moment to become a daily member on this Veteran's Day, as imminent market battles loom;