Business

Stocks are now in very serious trouble.

The S&P 500 has fallen to test its “election rally” trendline. If the market breaks down here, there’s essentially one giant “air pocket” down to 2,200 or so.

The bad news is that high yield credit (HYG), which leads the S&P 500, has already broken its respective trendline. This is a serious “risk off” signal.

Indeed, it gets worse. HYG is in fact breaking out of a massive rising wedge pattern that could very well mark the end for the 9 year bull market in risk.

What would this mean for stocks?

Moments ago the Fed released its July Monetary Policy Report which forms the basis of Janet Yellen's testimony to Congress next week, and while it does not traditionally discuss monetary policy it does provide a snapshot of the Fed's take of the economy and capital markets at any given moment. Here are some of the highlights courtesy of BBG:

Authored by Charles Hugh Smith via OfTwoMinds blog,

The solution is a new decentralized way of living that bypasses the chokepoints of centralized political and financial power.

Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

In the months since President Trump was elected consumer and business confidence have soared, and the stock markets have, too. Many are betting that much-needed supply-side tax reforms and deregulation would be rabbits that Trump would pull out of his hat. But, economic growth remains tepid, and political storm clouds are gathering in Washington, D.C.

Another month, another increase in minimum wage jobs such as healthcare and education, which is hardly a surprise but this time an unexpected source of hiring emerged: the government.