For anyone interested couple of comparison charts between current breadth of the US 500, and the correction of 2008.
Here is the daily chart from 2007-08...you can see a 6 month duration of clear negative divergence price v RSI, 2 x clear retracements below 210MA being 12% and 10.75% respectively. The shaded circle mirrors the XAU chart retracement during the same period where assets were sold to cover positions before the market retraced 54% from May 2008 to March 2009 therefore completing a 57.75% slide from peak to trough.
Here is the current US 500 chart...you can see 6 months of declining RSI with what I view as negative divergence, there are 2 retracements below the 100MA, the first being 10.5%, the second 9%.
Below is the historical US treasury rate as a comparison between now and 2008 as the FED's number one defense against a weak economy is to lower interest rates...as you can see there is nowhere to go from here.
Below is a chart showing interest rates preceding 2018 December stock market crash...
in December 2018 there were other contributing factors such as trade war with China, inflated company earnings, tax cuts but below is the cumulative effect raising of interest rates had on the stock market...a 22% retracement.
As you are aware there are 11 sectors that make up the S&P 500, below is a chart showing the % of the SP500 and their present day Shiller (previous 10 years of earnings) and regular (previous years earnings) PE ratios...when you are considering a stock investment most will think of a PE ratio 15 or lower as cheap and above 18 as expensive.
The highlighted sectors make up 43.4% of the largest cap US stocks and currently have an average Shiller PE of 48.55, and Regular PE of 63.2. As a comparison on July 1st 2019 the average Shiller PE was 28.47 and Regular PE 21.95.
| Basic Materials 2.5% |
| Healthcare 14.9% |
| Shiller PE | Regular PE |
| Shiller PE | Regular PE |
| 9/02/2021 | 36.9 | 93.9 | 9/02/2021 | 34.9 | 28 |
| 1/07/2020 | 27.1 | 21.7 | 1/07/2020 | 30.2 | 26.2 |
| Consumer Cyclical 10.2% |
| Utilities 2.8% |
| Shiller PE | Regular PE |
| Shiller PE | Regular PE |
| 9/02/2021 | 60.5 | 85.7 | 9/02/2021 | 30 | 23.4 |
| 1/07/2020 | 31 | 24.6 | 1/07/2020 | 29.8 | 25.1 |
| Financial Services 13.7% |
| Communication Services 9.9% |
| Shiller PE | Regular PE |
| Shiller PE | Regular PE |
| 9/02/2021 | 21 | 21 | 9/02/2021 | 50.3 | 36 |
| 1/07/2020 | 20.5 | 14.4 | 1/07/2020 | 22.2 | 20.2 |
| Real Estate 2.7% |
| Energy 6% |
| Shiller PE | Regular PE |
| Shiller PE | Regular PE |
| 9/02/2021 | 49 | 46.1 | 9/02/2021 | 16.4 | -9.8 |
| 1/07/2020 | 48.9 | 34.1 | 1/07/2020 | 17.6 | 17.6 |
| Consumer Defensive 6.7% |
| Industrials 9.7% |
| Shiller PE | Regular PE |
| Shiller PE | Regular PE |
| 9/02/2021 | 26.7 | 26.1 | 9/02/2021 | 29.1 | 48.1 |
| 1/07/2020 | 22.9 | 28.9 | 1/07/2020 | 25.6 | 23 |
| Technology 20.8% |
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| Shiller PE | Regular PE |
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| 9/02/2021 | 46.5 | 37.2 |
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| 1/07/2020 | 33.6 | 21.3 |
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The thinner this gets the weaker the catalyst can be to send fear into an already volatile market...
USD basket has rolled over again with RSI well down...nothings going to save the poor US currency...almost every FX trader I research is short.
XAU latest 4 hour below with support and a bounce off $1800 the next target will be that $1875 level.
For interest prior to gold entering it's bull run in 2008, it tested $950 5-6 times and the pattern looks exactly the same as we are seeing now...chart mark up below...
With relation to TNR hope we get some news this week, I'm encouraged by the sell side remaining pretty constant over the last few days, one could safely say we have reset at the 3.8c level as predicted.
GLTAH...DYOR...G76
(20min delay)