The S&P 500 has gained 211% since this bull market started, but stocks haven’t risen much since the Fed stopped QE in October 2014.

While the mainstream analysis remains quite bullish, the ongoing deterioration of MARKET INTERNALS & FUNDAMENTALS suggests something more pervasive.

The S&P 500 (with its 108x P/E Facebook and 928x P/E Amazon) is practically back to record highs but underlying breadth remains a disaster…

Without “FANG” and “NOSH”, the S&P 500 would be down year-to-date…

Margin debt is at all-time highs!

U.S. economic data unequivocally indicates a recessionary environment on par with 2001 and 2008.

The import/export data is suggesting that the global weakness has now impacted the U.S. economy.

The October figure was clearly not an exceptional number, and the jobs growth is clearly trending down off the January high.

The strong US dollar, as compared to other currencies racing for the bottom, is having a negative effect on companies with international exposure.

Rising Spreads Are A Very Bearish Signal For Stocks

For profitability to surge, despite rather weak revenue growth, corporations have resorted to using debt to accelerate share buybacks.

As you can see, REVENUE GROWTH is now NEGATIVE for the first time since 2008.

We know from history that the dates when profits rolled over coincide very much with the slide into recession.

http://www.gold-eagle.com/sites/default/files/rambus082415-5.jpg

CONCLUSION There is a probability that the markets could

rally through the end of the year. However, without a strengthening of the earnings and economic backdrop, such a rally will likely be a continuation of the current market topping process over the intermediate term.

While none of this means that a major market reversion is imminent, it does suggest taking on an accelerated risk profile in the current environment will likely not be greatly rewarding.