This stock market can get very very slippery!
As I noted earlier, the failure of the USD hedges against the decline in stocks is a crash risk. Bonds are not responding upward and the rates are remaining generally firm. While this is happening, USD is declining and this is a very high risk market for stocks. The stock-bond compositions will fail to protect the portfolios and it can induce a severe panic.
The stock market is discounting the higher rates, I don't think there will be any more QE. The banking probably figured out that they covered their butt with QE on taxpayer expense up until now and now they can take down the entire market down and make a killing.
Thus, I can almost
guarantee you that this is not a new bear market. This is a very sharp decline that will leave a lot of people in shock and awe when this market rallies again. We may actually see 1500-1600 very quickly in a few months, if not weeks. This will be the sharpest decline for a long time, if I am getting the big picture... The big picture is there won't be any more QE and the banking knows it and they are already prepared for it. There was the biggest rejection of new loans, similar to 2009 lows, earlier this year. The banking knows, the rates are going higher whether the stocks rally or sell off right now...
Best of luck.
