Saturday, 16 January 2016

The mainstream are starting to wake up

US equity indexes saw a third consecutive net weekly decline, with a new cycle low of sp'1857. The mainstream are finally starting to awaken to the notion that this is no correction like Aug'2015 or Oct'2014. Given another month or two, they'll start to consider that the situation is even more serious than the decline from May-Oct'2011.

sp'monthly1b - 10MA issue

sp'monthly2b - Guppy


*It has been a long week, I'm tired, and I shall try to keep this brief.

As ever, I watched a fair amount of clown finance TV today, in this case, channel'1..aka, CNBC. It was pretty amusing to see how many of the hosts and guests were getting a little twitchy with yet another very significant opening decline.

Increasingly, we're seeing the old arguments resurface, that of the 'fed saving the market'. No doubt the lower the market falls into the spring, calls for reducing rates back to zero, along with QE4 will appear.

It will be interesting to see what Cramer, Cashin, Santelli, Guy Adami, Josh Brown, and Steve Grasso have to say when we're in the sp'1600s.

Ohh, and of course... from Fed chair Yellen. I don't envy her. Unlike Bernanke who walked away into the sunset, Yellen is already facing the embarrassing likelihood of having to back track on raising rates.

As for equities...

Regardless of any bounce in the short term - which is clearly viable, not least if the Chinese leadership take action (cut rates, change RRR, etc) this weekend, the broader trend is clearly BEARISH.

The default trade remains to the short side, with the sp'1600s a rather straight forward target.

Right now, the 'prime' downside looks to begin in April. As the year proceeds, I'll try to refine the time frame.

Goodnight from London

Doomer chat from Dr Doom himself... Faber

I certainly don't agree with everything Faber says, but I always think he is worth listening to, not least as he has a rather good sense of humour.

Econ chatter, Gordon T Long with Mish Shedlock

For those with an interest in macro economics, this is good listening.

*the weekend post will be on the US weekly indexes