It's happened, breach of 2040 and long term uptrend broken. The bull is probably dead.
Sure does look ominous. The Monthly log chart gives perspective, bull and bear markets take years to unfold. The 38.2% fib retrace is uncannily sitting right on the double tops (now support) of the past 15 years. I certainly don't share any of the short term optimism for equities as others amongst us, in fact some have been preparing for this for a while, and now it's happening or certainly appears to be.
Implies that the S&P will go up or down 8% in the next 30 days.
The VIX may have exploded up, but Call Options around 2100 are really cheap. I think we have reached the point of capitulation. Thus I've bought an Oct expiry call option at 2110.
Read somewhere that the Taylor Rule said the Fed should have started raising rates in 2011. Implication by not doing so is pain ahead that could have been avoided
At the top of every bubble, everyone is convinced it's not yet a bubble.
With Q2 earnings largely in the books (over 97% of S&P 500 firms have reported), today's chart provides some long-term perspective on the current earnings environment by focusing on 12-month, as reported S&P 500 earnings. Today's chart illustrates the dramatic nature of the earnings plunge during the financial crisis as well as the recovery that followed -- a recovery that took earnings from levels not seen since the Great Depression to a new record high. Over the past two quarters, however, S&P 500 inflation-adjusted earnings have declined by a significant 12% from their record highs -- a significant concern going forward.
Notes:
Where's the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron's recommended charts of Chart of the Day Plus.
Read somewhere that the Taylor Rule said the Fed should have started raising rates in 2011. Implication by not doing so is pain ahead that could have been avoided
I dont think Fed will raise interest rate in this September. Most probably they will have a systemic and gradual approach to it from 2016 onwards. USD could become number one bullish currency in 2017/18. I believe after this sell off and volalliilty S & P500 could climb back breaking its all time high towards end of this year.
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Originally Posted by noodles
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