Bad times ahead…

S&P seems to have broken a 5 year long uptrend. I’ve noticed this a few weeks ago, but it looks as it’s now confirmed:

index

What’s really bad news is that the central banks have really used up all their ammo, and they can’t inflate the bubble anymore. Also, there’s a very interesting indicator, called “total market cap to GDP ratio”, which pretty much shows whether the economy is overbought or oversold. Currently we are at near 120% of what it’s realistically worth. A strong drop is to be expected. I wouldn’t be surprised to see the S&P at 1400, or even 1200 in the near future.

http://www.gurufocus.com/stock-market-valuations.php

I believe Europe will not suffer as much, since the markets are in a pretty bad shape already, and local QE is just starting. Still, I’d rather stay in gold and bitcoin nowadays. Gold is getting close to its 1000$ resistance line, while bitcoin is currently quite a good buying opportunity thanks to forking issue which is imho overblown. Whichever blockchain bitcoin ends up on, it’s going to work just as it did before, with possible minor glitches at worst.

Though the most secure course of action may be shorting S&P.

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Greece [GREK]

It looks as if the crisis in Greece may be near its end. There is quite an interesting W pattern which formed over the last 2 months regarding GREK, the index fund that tracks Athens stock exchange. Without further ado, here’s the chart:

grek

We have broken through the resistance line, and are on the way to approximately 14.5$. This means that the stock has the potential to go upwards some 20-ish % in the next month or so. Not bad at all. I also believe it may give a boost to other southern EU indexes as the ones I’ve already mentioned earlier (EWI, EWP, PGAL).