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Stocks, Symmetry, & A Significant Threat To The Global Economy
Submitted by NorthmanTrader.com,
If you been following our technical chart segment you have seen the evolution of one particular chart: That of the daily $SPX. The rejection of price on Friday, after yet another push higher, occurred at the level of an arch that we have been observing unfold over the past year. Now there is no technical pattern called the “arch”, but one cannot deny that since September 2014 price rejections have taken place along very specific points that now offer stunning symmetry.
It is not only the arch here which has proved superbly precise, but the confluences of price rejections are incredible.
Consider:
September 2014: 2019.25 September 2015: 2020.32
December 2014: 2093.55 October 2015: 2094.32:
Coincidence? Hardly:
One can’t help but wonder if all of January – July 2015 was simply the building of a giant head.
Consider also that the MACD is at its most extended since the year 2000 top and the RSI actually made a lower high versus the December 2014 2093.55 peak. Also of note is that the $SPX is the furthest disconnected from its 50MA to the upside in years.
Taking these facts into consideration, especially in context of the weekly and monthly charts we’ve been highlighting, the potential for a giant heads and shoulders pattern remains fully in play.
What will break the pattern? Likely a decisive and confirmed close above 2094 on a weekly basis and/or new highs.
What will confirm the pattern? New lows and a break of the lower neckline.
The target? Depending on how you define the neckline (were it to break) it invites a visit back to 2007 highs. Yes the pattern is indeed this large:
That would be a drop of over 25%. A very steep correction into 2016 and something that central banks are clearly desperate to avoid. Central banks, as academia, know the truth:
“It is unclear whether the sell-off is over or has slightly paused; in the latter case we could be headed for a potentially very serious equity slump by historic standards,” economists Adam Slater and Melanie Rama said in their report. “A sharp correction in global equity prices would pose a significant threat to the global economy. By reducing wealth, Oxford’s economic models suggest a 15 percent drop in the MSCI could cut the level of world gross domestic product by as much as 0.7 percent after two years. A 30 percent shock would knock off as much as 1.5 percent.”
Central banks can’t afford a big correction to take place as it goes counter to their mandate, a stable growing economy, hence they interfere every single time a correction of size is about to unfold. And any threat to the global economy must be prevented. So it’s no accident that we have seen all price expansion since $SPX 2020 in October come on the heels of Mario Draghi hinting at additional QE coming in December and the PBOC cutting rates just a day later. Now that fiscal year end mark-ups are over for many funds buyers have to prove how committed they are to driving markets higher.
Price will ultimately confirm how this will play out, but altogether this $SPX chart is an amazing construct of symmetry and, as a fan of structures and symmetry, it certainly has my attention. I can’t recall ever seeing such a precise structure.
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Only threat to global economic is corruptable fiat currency.
Insanity cannot tolerate even the threat of sanity. Therefore the only way out is gloriously righteous self immolation.
This chart is indeed stunning in its symmetry. Ergo, it will fail because the CB's have now been notified and they will bust it to the topside come hell or high water. Ve kant haf ein mutiny in ze ranks!
All central banks now must double and triple down or admit their policies don't work.
So it's a question of:
A) Stocks go way the fuck higher
B) Stocks revisit the 2009 lows
Central banks will print money until they bankrupt their respective countries and meet their ego's need to be right so I'm going with A.
Are you suggesting crash and burn?
If you squint just right, you can kinda see three peaks and a domed house, a very classic topping pattern which the "arch" reinforces for the untrained eye.
Chart porn.
this trade would work unless QE madness occurs in Japan and/or US.
So now "economy" means stawks
Of course, THE SECOND MOST EXPENSIVE MARKET IN HISTORY (1929) is to be ignored. FOOLARSES.
Off the top of my head, I would suggest that the author refer to the 1961-1962 top in the DJIA - use weekly charts for both indexes when comparing. His current illustration mirrors Symmetry, H&S development and Stochastic profile with that historical pattern. However, other factors now (e.g. wave structure; momentum) imply other alternative scenarios.
Charts are meaningless when the fed prints money to buy stock and short gold/silver. The "breakout" will come when they lose control, and no chart can predict that.
I can't believe you unless you, perhaps, have a chart showing why no chart can predict the Fed's loss of control.
Also - I suspect they lost control some time ago. The fuck have they been doing but staring at a spinning plate?
1929 was different as market was tied to gold.
this time we crack up.
we also have far less of a need for unskilled labor with more unskilled labor than ever.
in a basic sense, the economy is good to the extent, on average, people can readily sell or buy, theres a market for same, etc. You know better than me.
But we just have... a shitload of extra people - **from the perpective of economists' reduction of people to 'homo economicus'.
I'm not sure why we couldn't all work less and leave more room for education, {re}training, leisure, etc. 6 hour day, or split the week for somethings.
Certainly the military/wars and costs attendant thereto represent MASSIVE misallocations of productive labor and time and energy.
Yet analysis of "the economy" takes this spending {and sure, the wild excesses of the safety nets - where most people now take out more than they put in and the worker/beney ratio is bleeding out} for granted.
How many fucking bases do we maintain around the globe? what's the cost of having th epublic currency issued by private bankers as a loan at interest, and the arbitrage/diff down the frac reserve debt money creation scheme?
Wealth, via compound interest, insider trading, frac lending.... is misallocated more and more away from 'work' and more and more to 'capital' - passive/no work done.
Human societies need to eliminate excess humans instead of subsidizing them and especially promoting and subsidizing their continued excess breeding. In antiquity, wars were a useful way of accomplishing this because wars then meant killing and enslaving large numbers of the non-combatants.
Just imagine what the economic conditions would be if a virus spread around the earth that quickly killed off all the excess humans - all the so-called "poor", the unemployed, the malnourished, the mentally defective, etc. Then the unemployment rate would be zero, all the entitlement programs that are draining the earnings and government budgets of developed countries would be obsolete because there would be no excess and defective humans to justify them. Every working person whose earnings are being plundered under the euphemism of "income taxation" by political regimes to buy votes with entitlement programs would have their net income surge by as much as 70% (eg France, Denmark, Finland, Sweden) and they would be able to pay all of their living and retirement expenses themselves.
It would be utopia. In the absence of such a wonderful welcome virus, kulling the herd using simple mechanical methods would be just as effective in eliminating the parasitic burden and establishing an era of genuine prosperity.
With markets near record highs yet Americans, on average, have little to no retirement savings, the answer is simple -- you just set up stock accounts for those that don't have them and transfer assets from the 0.0001% to those new accounts. The brokers could even earn commissions, which would make them very happy.
Here, read Paul Mason in The Guardian, who suggests that the next economic crisis may already be under way:http://www.theguardian.com/commentisfree/2015/nov/01/financial-armageddo...
"A sharp correction in global equity prices would pose a significant threat to the global economy."
That is not what is posing a significant threat to the global economy.
one of my less sucky friends played this at the wedding, if its not your cup of tea then suck it
xhttps://www.youtube.com/watch?v=xDZgw7lC1T4
Stocks, symetry, BLA.. BLA.. BLAAA...
Dude. If you're playing casino's, with monopoly moneys? You'll get bitten, in your ASS, sooner or later..