Daily Market Brief

The Last Bear Chart

Last bearWith new record highs every day and down days a thing of the past the bear case, on the surface, looks dead. Negative divergences or news have not mattered in a very long time, yet there is one chart, and one chart alone that spells major trouble ahead. Not a little trouble, but big trouble.

I’ll let you be the judge, but I submit that the timing, the structure, the RSI divergence of the weekly $IWM chart is a complete spitting image of 2011:

IWM weekly

The proximate cause of the 2011 move? The FOMC ended one of its QE programs. At the end of the day, this is still what this is all about. When did the most recent uptrend line commence? You know it, the current QE program. No magic, no growth, just liquidity pushing prices to artificiality.

The result: 84. Best of luck:

PE ratios


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