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:

Stock Market Signals for the US and Indian Stock Markets for the Upcoming Week beginning June 22

Indicator	Weekly Level / Change / Significance	Implication for S & P 500	Implication for Nifty*
S & P 500	2110, 0.76%	Bullish	Bullish
Nifty	8225, 3.03%	Neutral**	Bullish
China Shanghai Index	4478, -13.32%	Bearish	Bearish
Gold	1200, 1.63%	Bullish	Bullish
WTIC Crude	59.69, -0.42%	Neutral	Neutral
Copper	2.57, -3.83%	Bearish	Bearish
Baltic Dry Index	779, 21.34%	Bullish	Bullish
Euro	1.1365, 0.94%	Bullish	Bullish
Dollar/Yen	122.70, -0.95%	Bearish	Bearish
Dow Transports	8412,- 0.06%	Neutral	Neutral
US 10 year Bond Yield	2.27%, -4.95%	Bullish	Bullish
Nyse Summation Index	-199, -33%	Bearish	Neutral
US Vix	13.96, 1.31%	Bearish	Bearish
20 DMA, S and P 500	2104, Above	Bullish	Neutral
50 DMA, S and P 500	2106, Above	Bullish	Neutral
200 DMA, S and P 500	2050, Above	Bullish	Neutral
20 DMA, Nifty	8177, Above	Neutral	Bullish
50 DMA, Nifty	8302, Below	Neutral	Bearish
200 DMA, Nifty	8352, Below	Neutral	Bearish
India Vix	15.09, -13.69%	Neutral	Bullish
Dollar/Rupee	63.47, -0.98%	Neutral	Bullish
Overall	S & P 500	Nifty
Bullish Indications	8	9
Bearish Indications	5	6
Outlook	Bullish	Bullish
Observation	The Sand P 500 rallied as expected last week while the Nifty outperformed significantly. The Vix is flashing warning signs. Market cycles are positive till July so a rally is likely next week.
On the Horizon	Greece negotiations, US, French and Italy Quarterly GDP, Japan CPI
*Nifty	India’s Benchmark Stock Index
Raw Data	Courtesy Google finance, Stock charts
**Neutral	Changes less than 0.5% are considered neutral

Signals are bullish for the upcoming week. You can check out last weeks report for a comparison.