We still have gas in the tank. Quite fine with me.
It's going to take 2 things to kill this market dead:
1. Q1 earnings season badness.
2. The first estimate of Q1 GDP due EOM April. If this misses, markets crash and stay crashed, until the FOMC can regroup with a new QE in early November. A weak GDP read upsets the entire recovery/growth/animal spirits narrative, and the Fed is not yet ready to do anything about it.
But first we need to touch the dotted blue line one more time. It has stopped every attempt in this eternal credit-expansion rally. It's not all that far away, and we are setup well to visit it.
The slope of the recent declines since January point to ominous targets. Let this run for a month, and we're back at the 1810 lows. Let it run into the Fall, and we're at scary new market lows under March 2009.
The leverage is there, the crap debts are there, the big players (pension funds, 401ks, ETFs) are all ready to sell and keep selling, at this rate of decline, at the slope shown here.
And crashes are three-wave ABC affairs.
|SPX touches the dotted blue line and dies|