Stocks may have found a short-term bottom, but out there on the horizon the next crisis is lurking.
Despite the short-term positive indicators surrounding stocks, it is important to keep an eye on the big picture.The U.S.'s enormous spending addiction has created a massive debt bubble that is going to lead the economy to its next financial crisis.
Consumer, government, credit card, auto loan, mortgage, student loan and just about any other debt you can think of is at a new record - and it won't end well. America's impending debt crisis is likely to materialize within the next few years, and when it does, its destabilizing effects will be felt deep throughout the financial system.
Stocks rebounded nicely over the past week. The S&P 500/SPDR S&P 500 Trust ETF has surged by roughly 5% since hitting what appears to be a short-term bottom at the height of the recent correction. The fundamental landscape surrounding stocks seems to be stabilizing and appears constructive in the short-to-intermediate term. I'll even go out on a limb and say that the stock market bottom is probably in for now.
The oversold indications projected by the RSI and CCI, the dip below 20 in the full stochastic, the textbook bounce off the 200-day moving average, massive sell volume, as well as other factors suggest that the badly needed correction may have come and gone. Moreover, S&P 500 futures had a successful retest of the lows, which happened in after-hours trading, thus it doesn't show up in the SPY chart. Nevertheless, most indicators point to a return to higher prices for stocks in the short-to-intermediate term.
Source: Bloomberg Pro Terminal
Trader Bozhidar Arabadzhiev
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not directed at residents of the United States or Belgium and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.