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When
I was looking at some long term charts, I found out that the current
situation for the SP500 is very similar to the situation in 2008.
Check
out the following chart below, and you will see why...
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The RSI hasn't been overbought anymore in a long time, indicating weakness in
stock markets... The same was true in 2008.
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The SP500 found heavy resistance in the 1260-1280 zone (just as we warned our
subscribers), which was the low of June 2011. A similar thing happened back
in May 2008, where price ran into resistance of the November 2007 low.
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Look at the exponential moving averages (20, 50, 100 and 200 EMA's). They
have now been converging as price rallied, but right now, price is falling
below these EMA's, just like in late May 2008.
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The MACD is now flirting to break the green support line, just like in May
2008, right before financial armageddon occured, and price is right at the
green support line now, just like in 2008.
 
Chart courtesy stockcharts.com
If
we are about to see the exact move as in 2008, this is what it would look
like...
Chart courtesy stockcharts.com
The
Ted Spread, which is the difference between the interest rates on interbank
loans and on short-term U.S. government debt or "T-bills", is
rising. This indicates that the banks don't trust each other anymore. The
same thing happened in 2008.
Chart: Bloomberg
One
positive thing however, is that when we look at the big picture, we are
nowhere near the 2008 highs (yet)...
Chart: Bloomberg
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