S&P 500 - The Big Short 2.0 (0% interest rates bubble is poppin)
Macro factors: QE and 0% FED rates created a lot of excess liquidity in the market and money that would have otherwise been in savings accounts or bonds into higher risk equities chasing yields. Welcome to the beginning of the end of the 0% rate bubble. The FED's QT is starting to have an effect on the risk assets. The market is currently overweight in risk assets so money is flowing in increasing quantities into safer assets that are getting more appealing by the day. Money will continue to flow out of equities and into Treasuries for the foreseeable future. If it leads to a serious correction or crash the FED will of course back off the gas pedal. The market is overdue for a hangover. The business expansion cycle is ending. Recession is less than 18 months away.
TA: SPX -0.92% has formed large bearish divergences on monthly charts across all of 2018 and is extremely overbought on longer time-frames. We've just created a 10 month long failure swing. This plus FED QT, FED rate increases, market cycle nearing it's end, will lead to less stock buybacks which will lead to more money flowing out of equities. The market has topped...the rest of the world is already entering a bear market ... the US market will figure out that it's in a bear market probably within the next 60-90 days. No more free Wall Street money from corporate tax cuts. We've broken 2016 trend-lines on this chart and many others.
How far could we fall? Well no one really knows and it depends on many many many factors. What we do know is this time around the FED has less ammunition to stop the bleeding.
Check out the rest of the world...it's in a bear market...how long until the US catches up?
www.tradingview.com/...ndices/quotes-major/
TA: SPX -0.92% has formed large bearish divergences on monthly charts across all of 2018 and is extremely overbought on longer time-frames. We've just created a 10 month long failure swing. This plus FED QT, FED rate increases, market cycle nearing it's end, will lead to less stock buybacks which will lead to more money flowing out of equities. The market has topped...the rest of the world is already entering a bear market ... the US market will figure out that it's in a bear market probably within the next 60-90 days. No more free Wall Street money from corporate tax cuts. We've broken 2016 trend-lines on this chart and many others.
How far could we fall? Well no one really knows and it depends on many many many factors. What we do know is this time around the FED has less ammunition to stop the bleeding.
Check out the rest of the world...it's in a bear market...how long until the US catches up?
www.tradingview.com/...ndices/quotes-major/
Comment:
We may have found a short term bottom. FAANG and NDX market very oversold for the most part. RSI's on daily and weekly are in the extreme oversold levels and prices have been holding up so expecting a rally...possibly a prolonged multi-week rally from here.
Comment:
Updated targets.