Is a crash still possible at all?
In this screencast I show two charts where crashes could happen. I focus on Wall Street which - affects markets globally including forex markets.
On the weekly time frame US Oil is beginning to struggle at a 61.8% Fib retracement.
Wall Street is possibly struggling at an important structure level. A whole lot depends on China. But dig deeper. See the CSI300 losing steam with some RSI divergence.
So while one bunch of hopefuls are punching north based on news of the China deal coming to fruition, there are distant influences that could come to bear on Wall Street from the Chinese markets.
Then enter the 'inverted yield curve'. https://fred.stlouisfed.org/graph/?g=lwEZ This is the most reliable indicator of recessions (not necessarily market crashes). I am reliably informed that the inverted yield curve has heralded every economic down turn since the second world war. But life is not so simple. Some say that the yield curve needs to remain inverted for 3 months if it is to be meaningful. Well, I don't know. In any event the Wall Street cycle is overdue its 'economic winter' just based on its own cyclical pattern (which is between 5 to 7 years). We're past year 10 at this point in time. Stock markets head south before recessions are realised.
On the weekly time frame US Oil is beginning to struggle at a 61.8% Fib retracement.
Wall Street is possibly struggling at an important structure level. A whole lot depends on China. But dig deeper. See the CSI300 losing steam with some RSI divergence.
So while one bunch of hopefuls are punching north based on news of the China deal coming to fruition, there are distant influences that could come to bear on Wall Street from the Chinese markets.
Then enter the 'inverted yield curve'. https://fred.stlouisfed.org/graph/?g=lwEZ This is the most reliable indicator of recessions (not necessarily market crashes). I am reliably informed that the inverted yield curve has heralded every economic down turn since the second world war. But life is not so simple. Some say that the yield curve needs to remain inverted for 3 months if it is to be meaningful. Well, I don't know. In any event the Wall Street cycle is overdue its 'economic winter' just based on its own cyclical pattern (which is between 5 to 7 years). We're past year 10 at this point in time. Stock markets head south before recessions are realised.
Komen:
Potential nice trouble ahead.
FED balance sheet 42% of GDP @ 2020-01-26. Does money have value anymore? [Different perspective on the virus youtu.be/NjTdvALChwk ]
