The globalized economy is a colossal Ponzi Scheme in which the vast majority survive on the bread crumbs falling off the table. The possibility of 7 billion people achieving a consumption-oriented lifestyle is zero, so the World Bank conveniently set the poverty line at $1.25/day to legalize global slavery. As long as someone else's children are doing the suffering, it's "all good". Post-2008, this illusion was extended merely by plundering all future generations.
Tuesday, February 16, 2016
Wave 3 At All Degrees of Trend aka. Bull Trap
This is classic wave 3 action. Bulls are trapped and inventing every reason possible to be optimistic. Now they say that "sentiment is too negative". Let's see, positive sentiment reigned for 7 years during the bull market, but now negative sentiment in a stock rout means it will go up again? Sure. There's a reason why investors are bearish... "over 80% of the companies issued negative guidance for future earnings."
The Wilshire Count. Each retracement is a nested fractal overlapping the prior rally...
Sentiment follows the market. Here is bearish sentiment inverted, to show that it tracks the trend of the market - up, and down...
As we see, in the last cycle bearish sentiment (red line, inverted) reached its low point in 2007, and then remained at the current extreme bearish levels for over a YEAR. The vertical blue line shows when monthly momentum was at current (negative) levels...
Momentum is back to overbought levels...
S&P :15 Minute
A 62% retracement so far, taking back 1880 on nominal volume
With JPY aka. "Overnight risk"
The Nasdaq is the weakest link now
The sharpest 2-day rally since August, and before that October 2014