Yesterday reminded the last word of Colonel Kurtz in Apocalypse Now…the horror the horror the horror.
This probably was the same words of the Fed Chairman Yellen, the Chinese and many others.
Still reminded me of the Asian Crisis in 1998 (the SP lost 19% and then recovered everything in 3 months due to the rise of the USD and US interest rates – one major difference is that in 1998 the miracle Asian economies were a fad…now they are real).
But for the market to rip through a support (1970) with such ease is literally Global Financial Crisis.
This is what happen when, from 2011, various market forces do not allow the share market to take a breather…the elastic snap with powerful force.
Now most probably we can forget September hike…December will do. Currency, Oil and Markets are a bit too much of an headache.
So where to look for? The FED of course!
Remember China rout started in June and nobody had a problem with it…suddenly in September (the FED was due to hike the 17th) the market explode.
The real question is
Will the FED admit it cannot hike rates and is ready to start Quantitative Easing number 4 (or Quantitative Easing Infinite).
And will the market react keeping on inflating assets or suddenly understand that the FED is powerless to restart the economy and the markets are just a bubble.
Since the interest at stake (politicians, fund managers, Fed) I would stick with answer number 1 for a QE 4 and rally (from October)
investorpolitico 