S&P 500 - Complete farce since 2009 based solely on Fed QE
I completely redid my wave analysis of the S&P 500. Turns out it has only supported two successful 5 wave motive sequences since 2009. All other stock market gains have been Fed induced via QE and show up as a 3 wave sequences (purple). Clearly the economy has not been terrible the whole time, but the stock market's value is clearly over-valuated because of it (not that most of you did not already know this). I find it interesting the one time the Fed started to unwind its balance sheet was the one of the times that market actually took off and completed 5 waves. However, it seems that in the face of even the slightest trouble the Fed tries to pump the economy/market.
It also brings new light to the S&P 500 showing corrective looking 3 wave sequences. I assumed that the market was still in correction from the March crash, but it could just as easily be the same motive sequence of 3 waves that we saw back in 2009. If that is true, then there is potentially no limit to how high or how long the Fed can pump the market (see Trump's recent tweets). Another round of stimulus and the market could take off again just like March/April. However, note that from 2009-2012 the amount of stimulus grew but the subsequent rise in the market was noticeably less. Will we see the same thing this time around? With a boost in 2019 and one already in 2020, what will a 3rd one do and how big will it need to be to have a noticeable effect?
FYI, the NASDAQ seems to be not having this problem and strongly shows 5 wave motive sequences. I am sure that the prices see the bump but not the 3 wave issue. However, the NASDAQ has successfully completed a full 5 wave "cycle" sequence since 2009. Will the NASDAQ go into correction and drag the S&P with it even with more stimulus? The NASDAQ has held the S&P up so far. It seems fair to think it could just as easily bring it down. Add in the rising challenges of COVID and lack of stimulus package agreement in congress, then the Fed may not be able to stop it this time.
Hope this helps and good luck.
It also brings new light to the S&P 500 showing corrective looking 3 wave sequences. I assumed that the market was still in correction from the March crash, but it could just as easily be the same motive sequence of 3 waves that we saw back in 2009. If that is true, then there is potentially no limit to how high or how long the Fed can pump the market (see Trump's recent tweets). Another round of stimulus and the market could take off again just like March/April. However, note that from 2009-2012 the amount of stimulus grew but the subsequent rise in the market was noticeably less. Will we see the same thing this time around? With a boost in 2019 and one already in 2020, what will a 3rd one do and how big will it need to be to have a noticeable effect?
FYI, the NASDAQ seems to be not having this problem and strongly shows 5 wave motive sequences. I am sure that the prices see the bump but not the 3 wave issue. However, the NASDAQ has successfully completed a full 5 wave "cycle" sequence since 2009. Will the NASDAQ go into correction and drag the S&P with it even with more stimulus? The NASDAQ has held the S&P up so far. It seems fair to think it could just as easily bring it down. Add in the rising challenges of COVID and lack of stimulus package agreement in congress, then the Fed may not be able to stop it this time.
Hope this helps and good luck.
