• 696 days Will The ECB Continue To Hike Rates?
  • 696 days Forbes: Aramco Remains Largest Company In The Middle East
  • 698 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,098 days Could Crypto Overtake Traditional Investment?
  • 1,103 days Americans Still Quitting Jobs At Record Pace
  • 1,105 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,108 days Is The Dollar Too Strong?
  • 1,108 days Big Tech Disappoints Investors on Earnings Calls
  • 1,109 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,111 days China Is Quietly Trying To Distance Itself From Russia
  • 1,111 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,115 days Crypto Investors Won Big In 2021
  • 1,115 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,116 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,118 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,119 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,122 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,123 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,123 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,125 days Are NFTs About To Take Over Gaming?
Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Bull Trap?

Most market participants considered QE3 a game changer. With the Fed printing money forever, the bullish crowd somehow determined that nothing could go wrong. Ooops!! Someone yelled "breakout" as the SP500 moved to new cyclical highs, but it appears what they meant to say was "get out" leaving investors to wonder if the announcement of QE3 has led to a bull trap. See figure 1 a weekly chart of the SP500.

Figure 1. SP500/ weekly
SP500/ weekly Chart
Larger Image

The breakout above the rising trend line is easy to see, and this breakout appears to be turning into this week's fake out as prices fall back into the trend channel. Failing breakouts are never good. I would look for support at SP500 1408. As stated two weeks ago: "Breakouts also imply game changer as well as prices have moved into new, uncharted territory. A break out must "stick". In other words, if this turns into a failed breakout, then it is look out below especially since the Fed has been taken out of the picture. After all, it is not like investors will be asking for more QE anytime soon. "

 

Back to homepage

Leave a comment

Leave a comment