View: SPX Weekly - 9.22.2015.png
SPX Weekly - 9.22.2015.png
SPX Weekly. What are the odds that the market has topped and we are entering a bear market? Low. Why? Because most of the time markets are trending; they only top and bottom...at tops and bottoms! Everyone knows that the market screws as many people as possible and the best way to do that is to neither fall nor rise, but instead form a consolidation to digest the gains over the last 2 years. After the consolidation, the market should blast higher to a target of 2500.
PE multiples would have to inflate with hopium to maintain a flat and current level, let alone to actually increase.
China's production is slowing down because they are exporting less = less revenue + need to purchase raw goods from suppliers to turn into finished goods.
The nations that supply raw materials to China will ALSO not be receiving that cash (mostly US trade deficit dollars.)
There is a cascade effect in the above just on basic mechanical fundamentals.
Now, when the US housing market topped out with over production the problem morphed into a financial crisis that went waaaaaaaaay beyond the housing sector & it's immediately related industries like furniture and refrigerators.
Likewise, with China's overcapacity to build products a lot of Chinese employees will have diminished incomes, thus spending power, and the whole cascade begins there, too.
Back to the US again, when money simply STOPS going into the market it will decline.
When money begins being pulled out en mass it will drop like a rock.
How's the math work out on SPX 2100 - 2300 in the next 12 months?