However, the correction of the Bear Market expected for the reasons I have just mentioned will not be the beginning of the recession; But rather a deep breath of the mad run, which the equity markets have started since the Trump government's accession to Power. The markets have fed on expectations based on its program of taxation and deregulation of the banking sector. The big bosses of the SP & 500 and the DJIA30 thought that with President Trump's tax gifts, This would allow them to finance their production Costs. They ignored the FED completely with its monetary tightening policy program begun since 2014. And today it seems to catch up with them!
FUNDAMENTAL FACTOR: abrupt increase or overrun of the BTP-BUND spread 10 years beyond 3.50% + increase in the ratio of Italian and German bond yields 10 years + increase in US interest rates + increase in VIX (Bear Market, Major correction Risk)
TECHNICAL FACTOR: at the level of the 10-year German - Italian ratio, we see that one has come down from a but it is likely not to do its theoretical objective since it seems to validate a which would strengthen a bull signal that was at the Bear base When we got out of the Canal. If this scenario materializes, it is also possible to see that the SP500 break its yellow line of peak of its tendency, and also with its summit channel to aim its theoretical objective illustrated on the Graph. As you will have understood they are inversely correlated. One shows a performance of + 84% ( SP & 500) and the other-83% (DE10YT/IT10YT)