The perfect storm, at exactly the wrong time.
- Trade war that keeps getting worse, no talks until September
- Fed rate cuts did nothing to help the problem
- China weakens their currency + adds to tariffs
- Gold reaches all time highs, moves higher as sign of recession looms
- Weak reportings from companies affected by trade war just now starting to come in,and will only get worse (Apple, Amazon, etc)
- Recession alarms going off in every single area
- All of this, right on top of an ascending narrowing wedge pattern, brewing since December 2018.
- Broken bear pattern with strong volume
- VIX broken narrowing descending wedge, bullish pattern with strong volume
Prediction:
SP500 will move higher to lower resistance line it broke out of on August 5th, 2019 of 2870-2885 (0.786 fibonacci) where it will be rejected and continue to move lower. First to 2690-2700 if it easily passes 2800, where it might also face resistance, and ultimately to 2500. If it stands here, possible bounce, if not, heading to 2200.
**Also a move to 2950 and rejection from same resistance line possible, this would complete head and shoulders pattern.
Market has been too good for too long. If it seems too good to be true with all of the negative stuff going on in this world, most likely it is. No reason for a bull market in the conditions we are in and have been in.. this move is long overdue.
Only way I see this recovering strongly is if Trump makes a deal in the trade war, and I think we all know how this has gone for months now. No one is backing down.