Crescast Happy Holidays With Some Bearish Charts

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Crescat Capital holiday letter to investors

Read This Message in PDF Form

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Individual investors have the lowest allocation to cash since the 2000 market peak:

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Source: FBN Securities

Active investment managers have their highest ever long equity exposure in history of this series. Even the bears are net long:

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Schwab’s overall client cash is at the lowest levels in the history of the data. This was a key indicator at prior market tops in Q1 2000 and Q3 2007, also prior to the 2015 selloff:

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BAML fund manager survey shows record risk taking:

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The put/call ratio is a great contrarian market timing signal and is signaling extreme bullish over-crowding:

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Source: FBN Securities

Intra-day trading action in December has deteriorated, much more selling into the close compared to most months all year:

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Source: FBN Securities

Hedge funds are the most leveraged and the most net long in the last five years and may be starting to sell.

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Volatility in corporate credit is signaling the top of a business cycle:

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We have shown across six different measures encompassing the totality of the income statement, balance sheet, and cash flow statement why the US stock market is at all-time high valuations, higher than 1929 and higher than 2000:

https://www.crescat.net/wp-content/uploads/Crescat-Capital-Q3-2017-Quarterly-Letter.pdf

We have established that China is the largest currency and credit bubble of our lifetime:

https://www.crescat.net/wp-content/uploads/Crescat-Capital-Q2-2017-Quarterly-Letter.pdf

We have illustrated the importance of selling at or before an historical market top and the fruits to be gained by selling short:

https://www.crescat.net/wp-content/uploads/Dec-2017-1929-Revisited.pdf

Investors today are the most net long and the most bullish they have ever been. These set-ups happen but a few times in a hedge fund manager’s career.

We wish you and your families the best this holiday season.

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