CESI: Surprise!

Citi Economic Surprise Index continues to flash a stark warning

Not that it has mattered (as with other bubble indicators) but the CESI is and has been guiding the S&P 500 lower since 2020, and said S&P 500 refuses to listen. SPX is aloft in CESI terms by both its proximity to its 200 day moving average and by analysts’ lofty forward P/E projections.

What could go wrong?

It’s not a call to abandon all stocks but it is most assuredly an ongoing call to respect risk management while we also respect the current trends in play. Markets irrational longer than you can remain solvent and all.

With all these new brokerages opening up in the wake of Robinhood, ‘brokerages for the people’, I think that multitudes of people who’ve never had access or wanted access are now involved and that makes it a dangerous market for the ages. It also makes it still bullish (as of 9:00 AM US Eastern time on Thursday September 2nd).

I think a segment of the global population may have gotten off the couch, put its video game addiction on hold and flipped on the red and green blinking lights of the stock market. Well, maybe they are still on the couch while they do it, bag of Doritos at their side. All fun and games.

Editorial comments aside, it’s a gruesome picture when taken at face value. From yardeni.com:

citi econonomic surprise index and s&p 500

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