Unicorns, a moniker applied to private startups valued at over $1 billion or more, are supposed to be mythical in nature. 

At best, there are supposed to be so few of them that venture capital firms would be absolutely elated to have a stake in any unicorn out there. (Or even their Canadian narwhal equivalents)

However, the truth is that unicorns are simply not rare or mythical anymore. According to the real-time list that CB Insights hosts, the number is now at 145 unicorns globally. In other words, the once exclusive Unicorn Club is becoming increasingly crowded.

That said, the odd member of the club does find the door.

“Facts do not cease to exist because they are ignored.” ― Aldous Huxley

“That men do not learn very much from the lessons of history is the most important of all the lessons that history has to teach.” ― Aldous Huxley

“Sooner or later we all sit down to a banquet of consequences” ― Robert Louis Stevenson

Felix Zulauf Zulauf Asset Management in Switzerland, has certainly earned his right as a long-running member of the Barron’s Roundtable.

In his August interview with Financial Sense, Felix explained to our audience why the mini-devaluation of the Chinese currency a week prior would likely spill over into other markets and raised the risk of a very sudden and sharp decline. Only a few days later, stocks around the globe fell by double digits.

With the reversal in stocks charted intraday, the S&P 500 Index closed marginally below its 50-day moving average, reaching towards horizontal support around 2040. 

Oil inventories declined by 3.6 million barrels surprising analysts that had anticipated another build.  The days of supply of oil declined and is now 6.0 days above the 32-year average for this time of year.

While 2040 remains the lower limit of the longer-term trading range that supported the benchmark in the spring and early summer, the more critical level to watch may be the November low around 2020.  A break of this lower level would suggest a short-term trend of lower-highs and lower-lows below the November peak of 2116, possibly confirming the conclusion to the positive intermediate trend that originated from the September low.  From a seasonal perspective, the present tax-loss selling period continues through to December 15th, on average, leading to appealing buying opportunities in beaten down sectors.  The 50-day moving average on the S&P 500 Index continues to point higher, implying a positive intermediate trend.   As of yet, there is little reason to suggest that the yearend rally will fail to materialize, suggesting patience is warranted.  Continue monitoring those levels of support, mainly the 50-day moving average around 2050 and the November low around 2020 and reanalyze the market direction should a break occur.

…..for an extensive report with 45 Seasonal Charts go HERE

Over the past month (and year) the market may appear rangebound driven mostly by a handful of top stocks, but below the surface the “smart money” continues to sell.

According to Bank of America last week, during which the S&P 500 was essentially flat, BofAML clients were net sellers of $1.3bn of US stocks, following two weeks of net buying. Net sales were led by institutional clients, who have sold US stocks for the last five consecutive weeks. Hedge funds were also net sellers following two weeks of buying, while private clients were the sole net buyers. Private clients have bought US stocks in four of the last five weeks, and net buying by this group last week was the biggest in two months (chiefly due to ETFs).