S&P500 Long-Term Short

FX:SPX500   S&P 500 Index
504 3 4
The Ending Diagonal at the top is a little too soon to chart or call, but is a possibility. You can see the RSI starting to diverge (red arrows at bottom), just like in 2007...this is showing weakness. This chart fits in with other global charts and patterns. Getting to the bottom could be a multi-year event. Nothing goes straight up or down....although it may feel like it if you are long.

The Dow can be charted in a similar manner. Capital preservation is in order. Bank failures would be expected.

There still may be weeks left to the upside, but this huge bear-market rally is coming to end. In Elliott Wave terms, this entire move has been a multi-year bear market. This is a deflationary crash, as seen by metals and oil             .
impossible unless another lehman sister blows...
+1 Reply
willworknow LastBattle
With $18T in debt and banks loaning out 95-99% of deposits (also called a Ponzi Scheme...for you or I), all these auto loans and student loans/debt you hear about....this can't end well. All the leverage being used will exacerbate this too. This is a credit crash....deflation. We never learn.
BobbyBlueShoes willworknow
Personally, I think it's all about the USD this time round. There is risk on sooooo many carry trades of US bonds owned by foreign investors and soooooo much corporate NZIRP debt ready to cost double with one interest rate increase and the risk of lower earnings due to USD, effecting companies possibly higher future cost of capital.

If it weren't for the tease of QE4 at every negative macro economic and fundamentals indicator over the last 3 months, equities should have risked in price to roughly S&P 1600 -1850 by now.

The Yallen put is a hard drug to shake. Unfortunately or fortunately for some, cold turkey always, and I mean always, comes after drug filled asset bubbles.

Some indicators cannot be seen in a price chart. I see too many price charts and pretty indicators here and too little genuine information.

6 years of newbie traders, that have never seen a market shock, will at some point, learn the way we all did.
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