Global Economic Downturn Ahead?

Interesting Charts from the World of Economics and Financial Markets-1

1) The first chart comes from Bloomberg which captures the entire set of events around China’s stock market crash:

2) The second chart is from Craig Hemke at goldseek.com highlighting a death candle on the long term S and P 500 chart that typically forms during major market tops as was the case in 2000 and 2008:

3) The third chart is from Adam Hamilton at Zealllc.com that suggests the recent spike up in the #Vix is a warning that the Fed’s grip on the markets may be reducing:

4) The last chart is from Clive Maund at clivemaund.com that shows the massive 7 year rising wedge in the S and P 500 breaking, suggesting further downside ahead:

You can see some more interesting charts here.

Interesting Charts from the World of Financial Markets http://t.co/EXI5sDDNlb pic.twitter.com/TA2IspAPrj

— samuelR (@RajveerRawlin) September 7, 2015

Early Signs of a Deflationary Collapse?

Some interesting developments are playing out in long term charts that make me feel comprehensively bearish over the long term:

a) Firstly a massive rising wedge  has formed on the long term S and P 500 chart. This is much bigger than that observed in 2000 or 2008 and has started to break to the downside which could have profound consequences. A major bear market could ensue post the break. Chart courtesy StockTwits.com:

b) Secondly Margin Debt is at record levels and has eclipsed levels seen during the maniacal peaks of 2000 and 2008. Once the above rising wedge breaks you could have a rush for the exit triggered by margin calls. Chart courtesy advisorperspectives.com:

c) Thirdly despite multiple dosages of Quantitative easing (#QE) from global central banks the velocity of money is below the levels observed during the Great Depression. This implies that changes in money supply will have little impact on the economy going forward. Further QE's are likely but won't really stimulate the global economy. Chart source armstrongeconomics.com.

The above developments taken together with ongoing bear markets in several key asset classes  make for a deflationary collapse increasingly likely in the not too distant future.

Why I am Ultra Bearish Long Term from Rajveer Rawlin

Deflationary collapse up coming? http://t.co/wiJoi1PQfi pic.twitter.com/Z7otAmPEF5

— samuelR (@RajveerRawlin) September 7, 2015

The Very Scary Rising Wedge on the US Stock Market S and P 500 Index

This is a chart originally highlighted on Stocktwits.com, the rising wedge on the S and P 500 with eerie parallels to 2000 and 2008. What is worth noting here is the current rising wedge is much bigger than that observed in 2000 or 2008. The consequences could be severe as and when the break occurs and could trigger a major bear market: