Market Warning Signs

The Global market is unstable since the last financial crisis no matter how they are trying to fix it or hide it and what’s coming next could be the next stage of a bigger melt down.

“Shemitah”, you hear & read about everywhere because everybody is talking about it but most importantly they are afraid of it’s final day ( Sunday 13/09/2015 ) . They are afraid of a market collapse which happened several times in the past . But if there is any crash is it really because of this Myth ?? If we go back in time we do find out that markets made Tops just before the Shemitah’s year or at the start of it and there was already big events happening driving the global market to the edge of a collapse , so the move which happens during the shemitah’s final day is just an aggressive spike to continue with the new trend  and what’s making the move so amplified is our biggest enemy : FEAR
When there is fear , people are more scared and start withdrawing their money to save it or seek safe haven investment , traders tries to cut their losses and the ones who shorted all the way from the tops are protecting their profits , so their actions is driving the crash to go even further on.

Greed vs Fear
Greed vs Fear

Let’s forgot all about the Media propaganda craziness and focus on the fact that currently the market already topped 4 months ago , events that already occurred caused enough chaos to start the drop and the coming ones will have huge impact on the global economy. So is there any technical approach to back up the fundamental perspective ?

When we take a look at the monthly chart of SP & Nikkei we find out that on last April both indices hit a strong technical resistance areas calling either for a big reversal or at least a pullback which already happened recently in the “Black Monday “

S&P500
S&P500
S&P500
S&P500
NIKKEI225
NIKKEI225

The XLF chart “ Financial Select Sector Index “ shows that the financial sector that got hit the worst in the 2008 crash didn’t recover like the rest , it’s holding below 61.8% and that’s another warning sign.

Financial Select Sector Index
#XLF Monthly Chart

On March EURO made new multi-year lows hitting a very strong support area which turned to be the floor for possibly a strong bounce or even could be the start of new bullish trend taking it all the way up to 1.6 – 1.7 in the coming years , since then the dollar index couldn’t make new highs and started consolidating waiting for right time to blow up or down.

EURUSD Monthly Chart
EURUSD Monthly chart
EURUSD Monthly Chart
EURUSD Monthly Chart

So back to S&P 15 years monthly chart we can notice that the timeline between tops , shemitah’s day and bottoms is shrinking and price movement become more violence but no matter what happened Market found bottom later on and that’s why I’m thinking if this year decline will continue strongly in the coming weeks it will not last that long maybe only 2-3 months before the recovery starts .

S&P500 Monthly Chart
S&P500 Monthly Chart

When cycles ends strong movement occurs and that’s happening every day in different markets with different degrees so you can focus on what suits you best to make profits

At the end it doesn’t matter if it’s the “Shmedoon “ , (Shemitah 13/09 + Fed 17/09 + Blood Moon 28/09 ) like my friend Dale Pinkert named it , you only need to remember that “ When Time comes Price Moves “ so trade safely , stick to your plan and always use strict Money Management .

 

AlienOvichO

Full time Trader & Analyst