Mother of All Head & Shoulders Pointing to 37.5% Drop In S & P Index.
In this report, I look at the early market action from London on Wednesday, March 6th, 2019. I look briefly at the precious metals, the stock market, the dollar, the bond market and the price of crude oil.
Today I look closely at the technical picture for the Nasdaq 100 index and the S & P 500 index. From my analysis, I note that both indices are forming a potential head & shoulder formation top. A head and shoulder top is a bearish formation.
I also look at some options strategies that could benefit from the potential move lower in the stock market over the next three to six months.
My conclusion is that the stock market seems to be forming a major top and that this formation has been evolving for over one year now and that there is a potential for at least a one-third haircut in the S & P 500 index.
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I really appreciate the great broker's analysis. And also the explanation on how to identify and analyze a head and shoulder.
Hi @jayem, I am happy to be of service. Thanks for the feedback.
Good morning mario, i predicted trumps election and that he was going to sink the dollar! or at least drastically reduce its value! i still see no reason to change that at the moment, and your much superior knowledge continues to confirm this, so metals and crypto,s are still the way to go well for me anyhow, thank you for your time and info which i check daily, have a great day. :)
You make a good point about the dollar as it topped (DXY @ 103.82) in January of 2017 when Trump was inaugurated. I also saw the latest figures on the U.S. budget deficit and that interest payment are now over $500 billion annually and that it is set to increase to $1 trillion in the next few years while defense spending is now just under $1 trillion. Trump seems to be definitely making the bankers and arms dealers richer!
Here is the article on the U.S. budget deficit: https://www.zerohedge.com/news/2019-03-05/us-budget-deficit-soars-77-interest-expense-hits-record-high
Great article thanks! in the comments i saw that every american has a $66k debt, wow! mind its not much better in the uk!
It is funny that you expect 37.5%. That is rather mild. E. von Greyerz is expecting a devastating 98%, given his latest article, if you extrapolate the increasing severeness of the 2001 and 2008 crises. von Greyerz is the king of permaBears, but also one of the few honest bloggers (apart from you) I know.
Hi @biebel36, Mr von Greyerz could very well be right on his assessment of the final bottom. In this analysis I am taking it one step at a time and looking for a target in the H & S formation but it does not mean as I said in the video that we could not pause and rebound after the objective is reached and then see another massive leg down towards von Greayerz's target further down the line.
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