Things are once again deteriorating in Europe at a rapid pace. The ten-year Italian bond is right back to where it was before LTRO 2 (just one month ago).
This is the end result of central bank intervention in the markets: the impact of each new intervention diminishes as the markets become ever more reliant on more stimulus/ intervention.
With that in mind, European financials are once again flashing danger signals:
When we take this line out, the next round of the European banking crisis will have begun. Speaking of which, both Italy and Spain’s markets are on the verge of a breakdown:
Watch those lines, when we take them out the next collapse is here.
In the US, the S&P 500 continues to cling tenaciously to the 1,400 level based largely on overblown earnings expectations (take out Apple’s results and the picture is not especially pretty) as well as the fact that investors ironically tend to get more bullish as stocks rise. And we’ve just staged on heck of a rise.
On that note, we’re forming a very dangerous looking rising bearish wedge:
If we break the lower trendline here we’re going down hard.
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Best Regards,
Graham Summers
Chief Market Strategist
Phoenix Capital Research
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