Since the beginning of the year FED has gradually lowered its purchases of asset backed securities - QE3. Until it ended the stimulus program on 29th of Oct.
It is interesting, however, to note that the corrections following the FED announcements has been more and more limited. It should be of no surprise as FED sends several upbeat signals to markets that it is not worried about global weakness, low inflation or a wobble in financial markets.
Now when the QE is over the attention is already shifted towards tightening. With current expectations as early as June 2015 there should not be a major tension on the markets for a "considerable time" (using the FED wording).
I continue to observe increased negative divergences between stock prices to rise and indicators that I follow. The sharp rise in recent weeks was parabolic and left several "gaps", days when the indices opened to a value higher than the previous day's closing leaving a space. The parabolic ascents do not end well and this will be no exception. There relevant gaps in the S & P500 in 1905 points, the Dow Jones in 16,401 points and the Nasdaq 100 in 3872. This tells me that the indices will fall substantially in the next relevant decrease for at least these values, then possibly exceed the minimum of 15 October.
The S & P 500 has strong resistance at 2,094 points and the Dow Jones in 18,300 points, the indices can not reach these levels.
The reversal may begin soon, problably in the beginning of January 2015.
Babar
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Nice chart but what is really relevant among all your previous prediction of the year? March, May, September 2014 and now June 2015?? I am not trying to be offensive but my point is nobody exactly knows when. In my opinion You can only keep shorting those peaks until one day prices sell more dramatically than just a previous dip. And the VIX is an excellent indicator for that. News of QE are not as reliable in my trading, and the last announcement OCT 2014 is exactly why. Good luck and happy trading.
ZigaZaga
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Who could have predicted the actions of the fed and the resulting stratospheric performance. One indication of an impeding crash might be the extreme of sentiment - moneyweek.com/wp-content/uploads/2014/11/141121-MWT-01.png - I agree with Babar - one could sell the tops of these rallies and one will turn out to be the beginning of a significant correction.
Thanks for the comment but I don't see why you think that I'm making predictions with that chart. It is actually informative one, showing the past FED announcements and the subsequent reaction. The timing of June is the current market expectation, not mine sole opinion. Please don't take this chart as a recommendation for short selling as it is not such.
Best
CH
vlad.adrian
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Almost everybody was talking about how the market will collapse after the FED will end QE. We are at an all time high, and I expect the stock market to keep climbing slowly.
charttrader
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thank you for the chart!
CoinedByCrypto
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Thanks for Ur chart...One comment though.... I'm not so sure that the FED have stopped QE. Yes officially but the PPT is still there buying MBS and supporting the market when need it . It could become a long discussion back and forth. The only i'am to say is ... the system doesn't function without intervention in the market. If we really had a free market supply and demand would work ...does it?
The S & P 500 has strong resistance at 2,094 points and the Dow Jones in 18,300 points, the indices can not reach these levels.
The reversal may begin soon, problably in the beginning of January 2015.