Two charts suggest a major decline is ahead in 2013.
"Don't fight the Fed," blah blah blah. Really? What did the market do after QE3 and QE4 were duly announced? It tanked.
Now that the Fed's magic hat is visibly out of rabbits, there are all sorts of complexities we could hash over such as the effects of bank charge-off rates on GDP or the Theater of the Absurd "fiscal cliff" play-acting, but why waste all that time and energy when a number of charts forecast trouble for the stock market in 2013?
Charts courtesy of longtime correspondent B.C.
Hmm. If there is a correlation here, it doesn't look positive for equities in 2013.Those familiar with McClellan's chart know that it forecasts a serious decline in the SPX in early 2013, followed by a countertrend rally that tops in May. The decline after May is the Big One that punishes everyone who stayed long the SPX.
As a lagniappe, there is a third pattern suggesting a major decline just ahead:Three Peaks and A Domed House Pattern Signals An End To The Bull Market.
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