The following 5-Year Daily ratio charts of the S&P 500 Index compared to Major World Indices
shows that the SPX
has underperformed all of them since the beginning of this year, and some for the past 1 1/2 to 2 1/2 years.
Price now sits at or near major support levels on all of these ratios. Unless serious buying begins to pour into the SPX
, we may see panic selling ensue in U.S. markets. I'd keep a particularly close eye on the German, Japanese and Chinese indices
for signs of any potential rotation of money from those markets and into the SPX
, since their ratios are at the most extreme levels against the SPX
during this 5-year period. Otherwise, the Fed may, very well, consider re-introducing another round of QE to compete with those countries' Central Banks' QE programs.