Is there no end to this carnage? Not wishing to scare people, but as mentioned yesterday, the only market period that compares to what has been happening this past three weeks, is 1929 and we all know what happened then. I think we need to sit up and take notice as it may well, longer term, end the same way.
The Trannies in the US which I have mentioned so many times have been absolutely slaughtered. Still a good economic indicator. And the JNK ETF – another one that has really worried me for some months. Caught up in a bit hurry.
And London – the pattern that had frustrated this Simple Little Chartist for so long eventually played out but with such style bringing it back to levels not seen since 2011. I know it is a horrid thing to say, but the pattern has been saying things were not right for so long.
And then when we look at our own XJO – we are back to levels of early 2017. Three years wiped out in three weeks. That is only how long it has been since there was such rampant bullishness when our index finally managed to hit a new all-time high.
But the selling wasn’t just in stocks. Commodities were dumped with precious metals coming in for particularly harsh treatment. The US dollar saw some buying which certainly did not help the commodity scene. There is one little point that encourages me and that is the fact that the iron ore price has held up so well. I’m not mad on the chart but each morning I expect to see it break lower but it hasn’t. Probably do it now as soon as we take notice of it.
As a chartist, one can only sit and watch the massacre this past three weeks. I can see how we could start to say that there are hints of divergence but difficult to put much confidence in it. And then just to round things off – we have a Friday the thirteenth and tomorrow is the Ides of March. Perhaps that might give us a short-term low!!
But what doesn’t bear thinking about is property….Sydney is the most expensive housing market in the world. What happens if it now rolls over? Hello bank divvies….
The longer term ramifications of what has been happening this past three weeks are very serious. I was hoping that with the election coming up in the US, they might have demonstrated leadership in this crucial health crisis but that has not happened. Might have missed the opportunity to secure another victory with voters.
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