As predicted, the market started the big decline yesterday.Most commentators have been saying that in the month of December any big decline cannot start. In the past November is usually down till Thanksgiving and then the rally for December and January happens.
This year is different. We had a rally in November and it got extended till Dec 6 and even till Dec 8 so that insiders could distribute stocks to willing retail buyers. For the last 12 days more and more have been buying into this fake rally in spite of reaching 18 Trillion debt.They will now be mercilessly butchered in December which probably will continue throughout 2015.
Japan continues to devalue its currency and so does the Euro Zone. Russia is also in recession. Iran is in recession also and all countries which depend on oil revenues are heading towards recession. Countries which are going through bad times and are in a bad social mood do not come to any useful agreement no matter how many sanctions we impose on them. The root cause of racial strife in this country is also lack of jobs for the masses. Fake numbers are being published practically every week with almost 23% of the population being unemployed and underemployed.
Even though DJI & SPX have been making new highs, NYA, Russell 2000 and Energy stocks have not made new highs. This divergence will now come to an end and rest of the market will head lower making new lows below October lows .
The decline happens in 5 legs one down, two up, three down, fourth up and 5th down. Each of the legs has 5 steps also.
In our motifs on Motifinvesting.com we will watch out for these legs and steps for you.
Maximum Decline will happen in Russell 2000 stocks and ETFs and also in energy stocks.
Markets around the World are going Down
European markets are all down
DJI
TMF
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