There are some compelling reasons to believe that the next move down in risk assets across the globe is about to begin:
First and foremost even after the recent bounce the #Euro a good proxy for global risk appetite has completely broken down despite the perceived resolution to the crisis in Greece. The strong dollar could eventually cause the liquidation of carry trades.
Next the USD/YEN often a proxy for carry trades has refused to break significantly above the major resistance of 125 despite the recent up move in the market and has recently broken below the 113 mark.
#Oil and base metals like copper which are barometers of global economic strength have resumed major break downs:
The S and P 500's last few highs have been marked by bearish divergences with non conformations in the transportation index which has not hit new highs in over 11 months and a major break down is under way out of a massive rising wedge:
Finally the #Vix is yet to take out it's 52 week lows and is heading upwards taking out it's recent highs above the 25 level and reaching as high as 53. Currently it has closed near the 20 mark that still suggests complacency:
Yes oversold bounces in the S and P 500 and other indices are possible but the above developments taken together with market cycles peaking make for a possibility of a global market melt down in the not too distant future.
First and foremost even after the recent bounce the #Euro a good proxy for global risk appetite has completely broken down despite the perceived resolution to the crisis in Greece. The strong dollar could eventually cause the liquidation of carry trades.
Next the USD/YEN often a proxy for carry trades has refused to break significantly above the major resistance of 125 despite the recent up move in the market and has recently broken below the 113 mark.
#Oil and base metals like copper which are barometers of global economic strength have resumed major break downs:
The S and P 500's last few highs have been marked by bearish divergences with non conformations in the transportation index which has not hit new highs in over 11 months and a major break down is under way out of a massive rising wedge:
Finally the #Vix is yet to take out it's 52 week lows and is heading upwards taking out it's recent highs above the 25 level and reaching as high as 53. Currently it has closed near the 20 mark that still suggests complacency:
Yes oversold bounces in the S and P 500 and other indices are possible but the above developments taken together with market cycles peaking make for a possibility of a global market melt down in the not too distant future.
Down move upcoming in risk assets ? http://t.co/bD5OqMEw8S pic.twitter.com/Ey032kyjAB
— samuelR (@RajveerRawlin) September 6, 2015
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