Topley’s Top Ten – November 6, 2017

1.Momentum Factor has Dominated 2017….MTUM Up Over Double the S&P YTD

But has the gap between the performance of the two indexes grown too big? MKM Partners technical analyst Jonathan Krinsky compared how big that gap is relative to its 200-day average, and found it’s at a level that often signals a peak in momentum. Sometimes it’s simply a pause—that was the case in 2005—but sometimes it can signal an impending peak, as it did in 2008. “Momentum names are stretched relative to the market,” Krinsky says. “But they can become more stretched.”

2.Short-Term Volatility Usually Follows New Fed Chair.

Chart from Ned Davis Research..Average 6 month drawdown 10%

3.Retail Gas Prices Hit 2 Year High

Unleaded Gas chart breaks 2 year sideways pattern

Oil and Gas Rallying…Energy stocks still worst performing sector YTD.

XLE SPDR energy ETF vs. S&P

 4.Total Value of Leveraged Buyouts Still Less than Half the 2007-2008 Bubble.

5.Weekly Sentiment Review…Some Euporia Setting In….Bulls Spike in AAII Poll.

Richard Hastings, macro strategist at Seaport Global, noted that aside from bullish sentiment, which soared to 45% in a recent American Association of Individual Investors survey, other positive developments such as job growth, hopes for tax cuts, and higher crude-oil prices are coming into focus.

6.Weekly Sentiment Update…Percentage of Households Who Believe Stocks will Go Up Next Year Above 2006 Highs.

Equity Markets: Here is the percentage of US households who believe that stock prices will be up next year.

Source: Balyasny Asset Management (BAM)

Fear and Greed Index Settling From 91 Score Last Month.

7.Average Hourly Earnings Increases Not Near Increases of Last Cycles….Robots Coming.

Robots will Start to Disrupt the Labor Market in a Big Way Going Forward….Further Pressuring Hourly Wages?

BAML Big Picture

Tech disruption a potential deflationary headwind for economy

8.Huge Year Over Year Spike in Lumber Framing Prices…..20% of Construction Cost for Home.

9.Medicare Opiod Spike.

Medicare Part D has long been suspected as a way for opioid and other prescription drug abusers to cheat the system and get their high. In 2015, Medicare spending for regularly abused opioid medications was more than $4 billion. In fact, spending for these drugs rose by 165 percent from 2006 to 2015, though the number of patients who received Medicare Part D medications only increased by 76 percent.

10.Scientists have found an exciting new clue about how ‘super-agers’ stay sharp as they age

Erin Brodwin

  • Scientists are fascinated by a rare group of people known as super-agers — people over age 80 who retain certain cognitive abilities that are similar to people in their 50s.
  • Previous research on super-agers found differences in the sizes of certain areas of their brains.
  • A new study found that super-agers also differ in their social networks. 

So much for not being able to teach an old dog new tricks.

Some older people can remember things just as well as peers who are nearly half their age. Scientists are calling them “super-agers” for their unique ability to stay sharp into old age

Several months ago, researchers discovered at least one physical basis for these differences that has to do with the thickness of the outer layer of the super-agers’ brains.

But in a small study published in October in the journal PLOS One, researchers took a look at whether there was a social side to these differences as well. Sure enough, after studying 31 super-agers over age 80 as well as 19 cognitively average people of the same age, the scientists found that the super-agers tended to have significantly more satisfying, high-quality relationships than their normal peers.

“You don’t have the be the life of the party, but this study supports the theory that maintaining strong social networks seems to be linked to slower cognitive decline,” said Emily Rogalski, an associate professor of cognitive neurology at Northwestern’s Feinberg School of Medicine and the lead author of the study, in a statement.

To arrive at their results, the researchers had all of the study participants complete a standard questionnaire designed to assess their general happiness and level of life satisfaction. Despite getting similar scores overall on the questionnaire compared to their peers, the super-agers stood out in terms of how they evaluated their friendships with others.

“It’s not as simple as saying if you have a strong social network, you’ll never get Alzheimer’s disease,” said Rogalski. “But if there is a list of healthy choices one can make, such as eating a certain diet and not smoking, maintaining strong social networks may be an important one on that list.”

Super-ager brains are physically different than normal brains

Thanks to a spate of previous research, scientists already knew that the brains of super-agers were different — physically speaking — from normal brains belonging to people of the same age group. They were slightly larger, especially in the outer cortex — the part of the brain that’s made up chiefly of gray matter and is rich in neurons. What scientists didn’t know until a few months ago, however, was whether that was because super-agers had bigger brains to begin with (perhaps from birth) or if they were somehow protected from the decay associated with aging.

After comparing the brains of 24 super-ager men and women to those of 12 of their normal peers using MRI, the researchers found the answer came down to age-related shrinkage. Over the course of their 18-month study, the scientists saw the brains of the average study participants atrophy at more than twice the rate of the brains of the super-agers.

Together, the two recent findings add several important new pieces to the puzzle of what makes a super-ager — and provides some insight into how age and social networks may affect the brains of regular people, too.

There are things the average person can do to stay sharp 

As we age, our brain’s gray matter — the stuff we rely on for seeing, hearing, processing emotions, exerting self-control, learning new information, and more — shrinks and degrades. So too does our brain’s white matter, which contains the complex web of twisting fibers (wiring, essentially) that carries information across different parts of the brain.

A small 2014 study published in the journal Nature Communications suggested that in some older people, white matter may act as a sort of backup generator that can fire up when gray matter reserves run down. If that doesn’t happen, however, people experience the typical effects of aging — fuzzier memory, a harder time paying attention, and difficulty learning new skills.

Super-agers and people gifted with extra-flexible white matter are rare, but some research suggests there are things the average person can do to stay keen with age as well. These include getting regular exercise, maintaining strong bonds with friends or family, quitting or not starting smoking, and learning new things or being intellectually challenged. So if you’ve been meaning to meet up with some old friends or have been putting off joining that yoga studio, there’s no time like the present.