S&P Earnings

Earnings sept 10 2015earnings 2

This chart is from www.chartoftheday.com , it is free and anyone can subscribe to it. This particular one depicts the S&P 500 earnings on a semi-log scale which tends to add a little drama to the picture. It may be reproduced but only without annotations and therefore there is a stylised version , home made, next to it.

The chart shows how quickly things migrate from the “financial” world to the real world or main street. Notice that earnings managed to drop to about the same level as they did during the Great Depression. In those days much of the world lived in isolation from their neighbours, with globalization that is no longer the case. The world is very interconnected and the proverbial butterfly wings flapping on the other side can have an enormous impact. No big “black swan” has stepped on stage yet but there are certainly half a dozen extremely worrisome trends that are already recognizable, never mind those that haven’t come to the surface yet.

This blog does not try to predict anything, rather it tries to uncover, using mostly EW, what might be just around the corner. If the count is correct we could be starting wave 3 of C at any moment – waves 1 and 2 are not discernable on this chart. If correct things will get very, very messy. Let’s hope the count is wrong!