SPX500 might be facing next recession? All we know for now is...
After the Great Recession of 2008-09, when famous investment banks evaporated along with the deeds to homes for hundreds of thousands of Americans, the S&P 500 got a shot in the arm. It was a one-two punch of falling interest rates and a Federal Reserve buying up once-toxic mortgage-backed securities. The Fed helped prop up the bond market too, keeping rates in constant decline. Equities were the only place to make money. Bonds were treated like stocks, with fixed income investors giving up on yield and just hoping a bond priced at 101 can one day hit 120. Everything was sky high. That was the story for about nine years.
The U.S market has had only one major correction since 19% drop in 2011. Since then, this has been one raging bull market.
This is not bear market yet for SPX (It's like teddy bear market right now). A bear market is when stocks fall 20% or more from their 52-week peak over a two-month period. In other words, the S&P 500 has to fall another 12.36% between now and April before we're in a bona fide bear market. Until then, investors will be paying attention to the usual economic fundamentals, and the algorithm-based funds and technical guys will be paying attention to the moving averages.
Those fundamentals might be changing, by Turnill's own admission.
-A budget deal approved by Congress last week will significantly increase government spending on defense and other items by roughly $300 billion over two years. The big spending bill, together with tax cuts, will widen the federal deficit.
- "We could see net Treasury coupon issuance more than doubling this year," he says.
- Bad for U.S. Treasury bonds. The bond market is bigger than the equity market.
- Turnill estimates that the combined effect of government spending and corporate tax cuts could add roughly 1% to GDP this year, compared to the 0.8 percentage point they forecast in his last outlook report.
- The stronger economy could easily raise inflation expectations and cause the Fed to hike interest rates faster, and that, with central banks unwinding their QE programs, could drive the S&P much lower than it is today. If the bears finally get their day in the sun.
From Technical Side of SPX500 as you can see on chart, we have Monthly chart, Momentum indicator and RSI indicator (which you probably everyone knows).
First down we could see in year 2000. Q1 and Q2 were losing momentum and were struggling to go higher, with confluence of RSI, which very ranging for a two quarters.
Second was economic crisis in 2008, where SPX were losing momentum since mid of 2007 and then in 2008 came the final knockout for SPX and whole market crash.
We are now in the third speculation of recession, where we can see huge overbuying in RSI indicator and since October 2018, its losing a lot of momentum with correction, which begun, we saw 2 big losing months from 3 since October, so are we facing next Recession? Or is it only small correction in huge bull market?
Let me know what you guys think. Let's discuss on this theme.
The U.S market has had only one major correction since 19% drop in 2011. Since then, this has been one raging bull market.
This is not bear market yet for SPX (It's like teddy bear market right now). A bear market is when stocks fall 20% or more from their 52-week peak over a two-month period. In other words, the S&P 500 has to fall another 12.36% between now and April before we're in a bona fide bear market. Until then, investors will be paying attention to the usual economic fundamentals, and the algorithm-based funds and technical guys will be paying attention to the moving averages.
Those fundamentals might be changing, by Turnill's own admission.
-A budget deal approved by Congress last week will significantly increase government spending on defense and other items by roughly $300 billion over two years. The big spending bill, together with tax cuts, will widen the federal deficit.
- "We could see net Treasury coupon issuance more than doubling this year," he says.
- Bad for U.S. Treasury bonds. The bond market is bigger than the equity market.
- Turnill estimates that the combined effect of government spending and corporate tax cuts could add roughly 1% to GDP this year, compared to the 0.8 percentage point they forecast in his last outlook report.
- The stronger economy could easily raise inflation expectations and cause the Fed to hike interest rates faster, and that, with central banks unwinding their QE programs, could drive the S&P much lower than it is today. If the bears finally get their day in the sun.
From Technical Side of SPX500 as you can see on chart, we have Monthly chart, Momentum indicator and RSI indicator (which you probably everyone knows).
First down we could see in year 2000. Q1 and Q2 were losing momentum and were struggling to go higher, with confluence of RSI, which very ranging for a two quarters.
Second was economic crisis in 2008, where SPX were losing momentum since mid of 2007 and then in 2008 came the final knockout for SPX and whole market crash.
We are now in the third speculation of recession, where we can see huge overbuying in RSI indicator and since October 2018, its losing a lot of momentum with correction, which begun, we saw 2 big losing months from 3 since October, so are we facing next Recession? Or is it only small correction in huge bull market?
Let me know what you guys think. Let's discuss on this theme.
Comment:
Daily Timeframe possible trend continuation. Or break upside
Comment:
Now we are stuck in the area between support at 0.618
and between trendline a possible next lower high.
Awaiting break of the trendline or bounce back! Patience guys
and between trendline a possible next lower high.
Awaiting break of the trendline or bounce back! Patience guys
Comment:
Comment:
HERE WE GO ;-)
