Many forecasters and economists talk about incoming MARKET.
I totally agree with them.
The is controlling the stage, and China is driving this pair.
Look at on the chart, the fitst time SMA100 cut SMA200 was in February, 2012, then I see SMA100 cut SMA200 again ( I show on the chart).
The first cut signaled for market for 3 years.
This rally of stock market was contributed by 2 elements:
- Low interest rate .
- Quantitative Easing of FED, this liquidity mainly flowed into Equity market.
Unfortunately, those two elements were eliminated by FED, now there is no fuel for market.
The second cut absolutely signals for market.
It's just the beginning.
I draw Fib retracement from the low of first cut to the high of second cut.
SPX tested 23.6% Fib retracement, I think it would retest this level next week.
At least I hope SPX would test 38.2% Fib retracement level in the medium term.
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