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(4/16/16)
As I talked about this week there is a potential Double Bottom
pattern in the VIX. If this is the case then a decent rally should
eventually develop in the coming weeks. Since the VIX and S&P 500
usually move in opposite directions a decent rise in the VIX would be
accompanied by a correction in the S&P 500.
Meanwhile the actions by the Federal Reserve have had a
substantial impact on the markets since 2008. As you can see the printing
presses were started in late 2008 and continued through 2014 which correlated
nicely with the rally in the S&P 500. When the creation of money
stopped for brief periods of time (points A to B) corrections followed (points C
to D). In addition since late 2014 Money Supply has been trending
slowly lower as the S&P 500 has been in a choppy corrective phase.
Finally note the recent rise in Money Supply (points E to F) has coincided with
the latest rally as well (points G to H). So it appears the Federal
Reserve has once again succeeded in preventing a major sell off for
now.
Amateur Investors
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