October 31, 2018

The 10-Year Era of Endless Central Bank Liquidity Has Ended… For Now

Stocks are overdue for a bounce.

Stocks are experiencing their worst month since 2008. And fund managers will do anything and everything they can to game performance so they can end the month not looking so bad.

However, the BIG picture is that THE top has hit. The 10-year era of endless Central Bank Liquidity has ended… for now.  As Chris Carolan pointed out recently the combined balance sheets of the four largest Central Banks has rolled over.

Stocks are now following.

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So unless you are day trading, you NEED to start preparing for a MAJOR bear market.

How major?

China has given us clues…

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It's Over: In 10-Years of a Bull Market, This Has Never Happened Before

Today is the final day of October.

It has been a brutal month for fund managers. So expect them to do anything and everything in their power to ramp stocks higher so they can end the month with the best possible returns.

After that, it’s game over.

The monthly S&P 500 chart has violated its bull market trendline for the first time since the 2009 low. This STRONGLY suggests the bull market is OVER.

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We also have NEGATIVE divergence on the monthly chart for the S&P 500’s RSI. And its monthly MACD is on a Sell signal.

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Just one of these signals would be trouble, but all three taken together (broken trendline, negative divergence on RSI, MACD “sell” signal), this is as close as you can get to “ringing the bell” at the top.

Will we get bounces and rallies? Yes. But unless you’re a nimble day trader, they’re going to be VERY hard to catch.

Bottomline: we are officially in a bear market, and stocks are going to collapse in a BIG way.

For those who prepare in advance for this, The Opportunity to Make Triple, If Not QUADRUPLE, Digit Gains is Here

While most people dread bear markets, the reality is that the largest investor fortunes in history were made during crises.

John Templeton DOUBLED his fortune in the Tech Crash.

John Paulson made $5 billion during 2008..

You get the idea.

Best Regards.

Deo Talaverano.

Chief Market Strategist DHF.

George Town. Cayman Islands.