US STOCKS: SHADOWS AND SIGNALS © Leo Haviland February 3, 2014

Yet during the darkest days of the worldwide economic crisis of late 2008/early 2009 as well as during the subsequent recovery, Federal Reserve Board easy money policies have played key roles in encouraging bull moves in the S+P 500 (and many other equity playgrounds). Likewise, the elimination of some of these schemes, particularly previous rounds of quantitative easing (money printing), has occurred alongside highs in American stock benchmarks.

What does tapering foreshadow? The Fed’s recent decision to reduce (taper) and eventually eliminate the current gigantic round of money printing warns that a notable top is or relatively soon will be in place. Thus the mid-January 2014 high point in the S+P 500 arguably represents an important top. If a stock marketplace peak is not currently in place, one probably will be by around the end of first quarter 2014. Several other indicators likewise portend a plateau in the S+P 500. Fed tapering, to the extent it coincides with at least a modest decline in the S+P 500 and related indices, will hint that economic growth in America, other advanced nations, and developing and emerging countries will be less than predicted by guardians such as the International Monetary Fund.

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US Stocks- Shadows and Signals (2-3-14)
Chart- S+P 500 (2-3-14, for essay US Stocks- Shadows and Signals)