I think we test 196-197 this week .. Then if Google few other companies rip it then we trend higher as long oil don't make crazy drops .. If not and opposite happens we test the lows
" I just don't see what puts us in a recession domestically. "
The answer is lack of buyers and a run up in dollar (10-15% over the next 6 months), which should also bring the gold down (at least for the first half of 2016) and also the oil.
Energy was a huge part of USAs economic rebound, that's done. Asset prices without QE are done. Housing is back to being overpriced. Rate hikes dry up liquidity. Earnings are on the decline and will be killed even further as dollar goes up.
The only benefit US has us that almost everywhere else is worse. 2016 will probably be the most volatile year ever.
The 7 year stretch is a concern. I think it's possible that the correction we are experiencing could have started a year ago and we might be seeing the end of it soon. Perhaps it's wishful thinking but all the problems we are facing started a year ago. Are they all getting worse now or are we at the transition point where it starts recovering?
I look to separate the external factors to determine internal strength and I still see a sustainable upward path. The external factors could be altering our internal strength and given enough time could derail this whole recovery. I don't see conclusive evidence this is happening.
It is always hard to take a stand at this time and I fully acknowledge that we could be experiencing a much deeper drop to come. Emotions at both ends of a market move affects perspective. History is not usually kind to markets that start out the year as we have. History also suggests that a 7 year run is time for a pause. Sometimes it is not a pause but a breakdown. I am split on where we are and how far we go down. Too many variables. Too date I must favor the long trend since internal data has not changed this whole year.
Income and Outlays come out Monday along with Manufacturing Index and consumer spending. These are important barometers for both internal and external factors affecting our economy. Disposable income has been running pretty high in all of 2015. If it continues I suspect we do not see a major bear market yet. I look to see if the current swoon is reflective of deteriorating data or not.
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