The Big Picture: June 14, 2016

With lots of central bank and political turmoil likely ahead, I thought it would be a good idea to review the big picture and identify the most likely outcomes for equities.

We’ll start with the weekly chart for SPX.  This is the pure, unadulterated version — showing just how insanely steep the slope is on the channels — both rising and falling.2016-06-14 SPX weekly 1056Note that the rising red channel from 2009 is contained within the .236 – .500 quarter of the rising white channel.  It’s no accident that it started below the .236 line.  And, it’s quite significant that SPX arrived back at the white channel midline and the yellow 1.618 Fib at the same time [see: The Last Big Butterfly.]

The index’s difficulty at busting out of the rising purple channel is evident in the mass of channels, Fib grids and assorted other chart features packed in the most recent peak.

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