Everyone is bearish now......

TAPE was in a freefall last week reaching lowest level of 2015, remember we are in 2016.....

CNBC gurus were having a field day with dire prediction for this market all based on opinions and lines drawn southbound as far as possible. Carter Worth takes the cake with prediction for S&P 500 @ 1575.......

SO IF you believe Carter Worth magic number of 1575 which is 305 points lower than Friday's close, we have to be suicidal to be long in this market @ all......

BUT first look @ carnage in the market since 2015 highs :

S&P 500 Down 11.92%

Dow Down        12.89%

Nasdaq Down    14.21%

Russell Down    22.24%

Here is the "most reliable " RSI number "

S&P 500 @ 31.29%

Dow        @ 30.24

Nasdaq   @ 28.92%

Russell   @ 25.48%

RSI is telling me that we are on the verge of  " major turnaround in Russell & Nasdaq "...Dow & S&P 500 to follow......

Bull Bear ratio is giving a "huge buy signal"

Bears are leading by 7.1 points.....a reliable contrary indicator......

BUT no one on CNBC is factoring RSI & Bull Bear ratio...as far as those gurus are concerned they are "irrelevant "

They all are too busy drawing their "fictional lines on charts "

Lets look @ the fundamental reasons which could be @ play.......

There is "no recession in the world today in any major economies "

GDP is growing everywhere, only CNBC pundits are talking about recession, another fictional talk.

YES China is slowing down, official number is 7% GDP growth but they may come near 6.5% GDP growth, in economics 101, 6.5% GDP growth is " strong growth "

Commodities are going down as Chinese needs for those products are "minimal", it was robust @ 12% GDP growth in 2008, but @ 6.5% simple math does not support huge need.

Gold is going down because US $ is strong due to Chinese slowdown, also there is no inflation worldwide.

Computers, Smartphones and Tablets are @ saturation point, their growth is negative.......

Energy means Oil has collapsed and their is financial implications in that sector along with commodities , expect major adjustment in their loan portfolios.....

Some of the above changes are causing disruption and financial impact which is being discounted by markets around the world.

It is extremely sector specific not broad based, earning reports will prove skeptics very wrong.

Based on above analysis , it is a "fair conclusion " that markets are ready to rebound hard and fast.

Use RSI as a gauge, 30 means buy & 70 means sell is an old reliable number to keep in mind.

World markets are open on Monday including Canada, hopefully we will see stabilisation by close.

BLOG does NOT give buy or sell.

Saleem

Posted in: Mixed