Bear Froth

Here's a couple of points worth noting as the S&P 500 is bouncing off the 50 day moving average.

Over the last week or so we've seen a handful of fresh data points to lure sloppy market participants to the bearish side.

Check out the new high in margin debt

ChOTD-6/1/15 NYSE Margin Debt Spikes To Record High; Net Cash To Record Low $SPY pic.twitter.com/gjIFLa4LhZ

— Dana Lyons (@JLyonsFundMgmt) June 1, 2015

This seems to be getting construed as bearish.  A new high in margin debt isn't in itself bearish.  I think of it in terms of flows and any other market divergence.  As long as there is flow supporting new highs, there is no divergence.  

@hercapital lays out a great chart and clear take on margin debt momentum

Margin debt on a y-o-y basis is positive again. Rarely IT - LT market bearish. Never hooked over. $SPX pic.twitter.com/pmJNqp1OBt

— Sheldon McIntyre (@hertcapital) June 2, 2015

Now let's move on towards another interesting chart.  The % of IPO's that are unprofitable.

The last time this many IPOs were unprofitable, the Dot Com bubble was bursting -> http://t.co/5F1Kuc8TKT $SPY pic.twitter.com/YB9qQ6C7YT

— StockTwits (@StockTwits) May 31, 2015

I think it's worth noting how much IPO activity has slowed down in 2015.  It just so happens that a large percent of these IPOs are your biotech stocks.

Via Renassaince Capital:

The 34 IPOs raised $5.4 billion, making it the least active quarter by IPO count since the 1Q 2013 and the smallest by proceeds raised since the 3Q 2011. Led by biotechs, the health care sector stayed active, accounting for half of all IPOs. While recognizable brands like Box, GoDaddy and Shake Shack became publicly listed, technology, consumer and energy offerings fell below their historical averages and unlike recent years there were few large LBO exits. Technology IPO issuance was likely dampened by the widespread availability of private funding at very high valuations, which produced little urgency for companies to seek IPO capital. Volatile currency markets, global interest rate movements and heightened follow-on activity also competed for the attention of institutional investors. 

So yeah that's a high % but it's also half the amount of IPOs from the back half quarters of 2014.  So dispersion

Anyways, you always have to challenge the data presented to you.  It's usually never a slam dunk for either case.  If you just take the information presented to you and listen to the crowd, you've just built up quite a slanted view that doesn't really jive with reality.

Maybe the market's trapped enough folks to get us back to the top of the range or even break over that key 2140 level.

Trade 'em well!