Danger In The Markets? Part V

This is the last blog post (Part V of V) in this "Danger In The Markets?" blog series.

I would like to end this blog series with another look at the daily 1-year S&P500 chart. This chart depicts a Rising Wedge from the March lows. As well, I have indicated a potential H&S (Head and Shoulders) pattern in red. For those unaware, both of these patterns are bearish. I believe more in the Rising Wedge than the H&S, as it is more established. Additionally, the VIX can be found along the bottom of the chart:



Chart Courtesy of StockCharts.com

One will note that in yesterday's post (Part IV) there was a daily S&P500 chart that showed a Rising Wedge pattern as well. The difference in appearance between that chart and the one above is that the bottom trendline is drawn differently - the chart above incorporates the early October low. Regardless, should this Rising Wedge pattern be validated through future price action, conventional Technical Analysis methods would "measure" a resulting price far below the March low of 666.

As I have mentioned repeatedly on the blog (and these commentaries can be found under the "Stock Market" and "Investor" categories) I strongly believe the rally from the March low of 666 is a Bear Market Rally. The implications of this belief, should it prove accurate, are profound both from a financial markets perspective as well as an economic one.

As I have stated previously, I do hope that my analysis and conclusions as to where the markets and economy are heading are incorrect, and that we are on the path to true Sustainable Prosperity. However, I am firmly convinced from both an economic and markets perspective that we face an array of difficult problems in our economic future and resolving them will likely prove most vexing.

It should be noted that, as mentioned repeatedly on this blog, my views are very contrarian in nature. As such, they are quite at odds with those held by the vast majority of economic and financial professionals who are firmly convinced that we are currently experiencing a recovery with little or no risk of further economic damage...



SPX at 1066.63 as this post is written

Peril In The Markets? Part IV

The price action in the S&P500 since the March low at ~666 has struck me as being very "impulsive." This is certainly a cause for concern. Also, there certainly has not been any significant "wall of worry" that one would expect given the fundamentals.

The charts seen in this post are from Maurice Walker, http://thechartpatterntrader.com. First, a daily chart of the S&P500. As seen in this chart, the 1050 area is certainly one of great significance from a chart pattern perspective. Don't ask where the large rising wedge would project to on the downside, if it indeed proves a legitimate bearish pattern. Also, the large broadening pattern is notable, as is the smaller one, as seen by the dotted line. Also, of immediate concern is the potential bear flag pattern of the last few days:








Chart Courtesy of StockCharts.com









Also, here is the Weekly chart. I don't have much to comment on with regard to this chart, other than to say it gives a good longer-term perspective:









Chart Courtesy of StockCharts.com









Lastly, here is a weekly chart of the QQQQ. Again, the same rising wedge pattern seen in the SPX...additionally, the price is right at the downtrend line from the all-time highs, so this is a very important juncture:











Chart Courtesy of StockCharts.com






Now onto Part V...



SPX at 1049.34 as this post is written