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The Janet Yellen Market Rally

By Chris VermeulenStock MarketsApr 06, 2016 10:54AM ET
www.investing.com/analysis/the-janet-yellen-market-rally-200124208
The Janet Yellen Market Rally
By Chris Vermeulen   |  Apr 06, 2016 10:54AM ET
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Currently, we are experiencing the SPX topping formation. Again, it is dangerously overextended. The SPX staged a strong rally due to the repeated actions of Central Bankers, during the month of February 2016.

S&P 500 Bullish Percentage Index
S&P 500 Bullish Percentage Index

Presently. we are truly living, investing and trading in ‘unprecedented’ times. Another push higher is not out of the question, at this time, into ‘nominal’ new highs as we experienced this past Friday, April 1st, 2016 and then within a week or two it should start cycling back down.

There are strong ‘headwinds’ straight ahead for any attempted rallies that may take place. There is ‘bearish’ divergence within several momentum oscillators. This is signaling major warning signs! There are no bullish or favorable long set ups in the market place environment. I would look toward ‘unexpected’ choppy price movements across the board.

S&P 500
S&P 500

Overbought Vs. Oversold Stocks
Overbought Vs. Oversold Stocks

Investor sentiment has reached levels associated with ‘peaks’ in the equity market advances. Courtesy of ivewmakets.com

It is dangerous when the markets have nothing of substance sustaining them, other than their dependence on the FED’s announcements regarding its’ monetary support. It is extremely dangerous when the FED tailors its remarks so as to support financial asset levels. This is not the mandate of the FED, however, we are all waiting with anticipation, to hear their future announcement.

When Dr. Janet Yellen can make a couple of phone calls and implement an equities rally into new highs 2016 -- as of last Friday, April 1st, 2016 -- then we become the ‘fools’ who believe and buy into it.

Interventions by Central Banks can no longer change the long-term trend from ‘bearish’ to ‘bullish’. They are merely delaying the inevitable and just creating a ‘slow-roasting bear market’ (as I have previously mentioned for several months is starting to unfold in the US large-cap stocks). While these actions of the Central Bankers are now behind us, we are currently entering the earning season, which is most likely to disappoint Wall Street analysts.

The U.S. is currently experiencing the worst financial and economic recovery during the history of the countries’ worst financial crisis’ and ‘recession’, since the Great Depression. Most people don’t realize what is happening and thus don’t see or feel much of this recession, but it’s there building momentum in the background and it will be a rude awakening for most once the breaking point is reached.

Daily S&P 500
Daily S&P 500

Concluding Thoughts

In short, the US stock market is at the topping point. Odd favor a major market downturn that will last before the next bounce, and then continue yet again even lower.

This will be a big surprise to most but my followers and I have been watching this unfold for months and are stalking the market to time the next BIG SHORT to make our killing.

The Janet Yellen Market Rally
 

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The Janet Yellen Market Rally

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Comments (5)
Ying ying
Ying ying Feb 14, 2017 11:20AM ET
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All the leading indicators don't give recession warning. What's the explanation? . it's almost a year from the publishing date of this article and market is higher now. What's your explanation? Regarding proposed tax cut, isn't that real bullish sign going at least this year?
Chris Vermeulen
Chris Vermeulen Apr 07, 2016 5:20PM ET
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Thank you everyone for your kind feedback!. I think so many ppl are bullish on the economy is because they dont know better and dont follow leading indicators warning of major slowing taking place. They will come around, but not until the economy is well within a down turn. They need to see it to believe it... :)
Brad Smith
Brad Smith Apr 07, 2016 2:41PM ET
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Thanks for this article Chris. I do agree the market has been following the Fed announcements too closely for quite some time now. We can only hope the market is not simply sustained by Fed announcements. As for the possibility of a full blown recession, the other economic indicators are not currently pointing towards one though I'll be sure to keep a close eye on any developments on this matter.
Puneet Dang
BuddingAnalyst Apr 06, 2016 2:34PM ET
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I do agree Chris, but can you explain why can't the measures taken by Fed make the markets go even higher? Can't the markets break its resistance level? I do appreciate your article but then why are people so bullish about the economy?.
BRETT SMART
BRETT SMART Apr 06, 2016 1:56PM ET
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Sincere, honest, bold and real. Thank you Chris for this great article...Could not agree more...It all comes down to credibility. This is such a great article I just want to add a few words...When we look at the Global Markets we see that Germany, France, England and so forth, they all had rallies and are now in a downturn...Showings signs of a real, transparent NORMAL MARKETS...Asia and South America are experiencing the same...It is very mysterious and somewhat laughable to see the US Markets being so manipulated with the invisible handle. It certainly doesn't do well to Market's participants and the idea of a Free Market is a joke. Thank you again, GREAT article.
 
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