This shift is occurring because, as the arrangement stands right now, central banks are at the precipice over which confidence is fatally lost in the rockets' red glare lifting bond yields. The "hyperinflation" no one has seen yet to date, despite much anticipation? We are at the threshold. Thus, the retreat from QE. Still, bigger picture, "controlled disintegration" is BIS policy going back to the destruction of Bretton Woods. Yet this echo of European fascism appears only the more pathetic now, even in the shadow of Hamilton's withered skeleton, with its resentment more widely pronounced (and felt).
Be that as it may, storied bodies holding sway are tempting deflation of the capital structure, risking the core's further contraction into still fewer hands. Institutional objects in this play appear mere messengers of the gods who reside outside and above any reports we hear. That's my casual observation of this scene heaping scorn upon central bank profligacy. Yet even bi-partisan agreement over this stunning shift in focus nonetheless leaves on the table a tasty political bait demanding the Fed's nationalization. The only effective austerity antidote is clear. Likewise, there is no saving the social safety net without physical economy worthy the 21st century, measured by an increase in energy throughput capacity, this in keeping with an established trend of many centuries whose most recent, indeed, have seen this trend accelerate. There is no turning back. Necessity surely is the mother of invention.
A shift of significant magnitude—indeed, unprecedented since 2008—more persuasively begs the above view, returning to prospect considered here early June. The negative MACD signal line crossover we were anticipating a few weeks back has occurred.
Considering growing resistance to endless QE, support at 2010 and 2011 bottoms seems more likely to give out. Systemic challenges, post-2008, saw QE ratchet higher. Yet by all recent appearances expressed in a contrary intention very high up in the order of things, still greater QE is not in the works, at least not immediately speaking. Lest we forget, still greater QE evidently has been quite "needed" up to this point (assuming addition of still more leverage—there's been no de-leveraging—has been "needed" to restore confidence, or ever could).
So, a sub-1000 S&P 500 by early 2014 appears on the radar.
Certainly nothing "new" in the above Elliott wave count. All wave components labeled have been detailed in the context of previous prospects, sometimes differing, other times more or less in keeping with the view above (particularly per wave B off March '09 bottom forming over a prolonged period of time, a possibility whose likelihood has been increasing as the save from 2008 has become further entrenched within institutions of the highest order).
Very near-term, threatening technical circumstance presented here this week remains precarious. This week's bounce has barely dented a decidedly pronounced technical retreat. Another downside reversal sinking major indexes further below May's peak appears a reasonable possibility still, in fact more reasonable now than mid-June. Indeed, we could ask at the conclusion of this week's bounce whether 2013 in the U.S. is on the verge of going negative, joining many other global equity markets?
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