A bit like “NASA says, Houston we have a problem”.
This was the week in which the FED was coming in all gun blazing to sooth the markets as they did all this year, and they failed. Vix closed at 18.62 (above 17.98/18.5) so the issue can be serious.
I studied a bit the DeMark indicator and this is what happen last time.
20 May 2008 it went off.
The market went down till July. Then went up till mid late September…and then we all know what happened.
I am not saying we are that point (the Fed was not meddling the cards), but I look at patterns. Let’s see.
About the FED. It is between a rock and a hard place.
Quantitative Easing will have to end this month. If it does not it will signal that the issues are bigger than it seems. If it does interest rates will start creep up in the US Bonds….bringing up the US Dollar (other time in similar situation the US Dollar had a swing up for 3 between 20 and 40%- the US economy cannot cope with that).
So the market saviour is trapped (NOT DEAD). And you see the consequences.
RED ALERT
investorpolitico 