The US market fell beautifully

The US market fell beautifully.

The US stock market went on Christmas in a very pessimistic state: a strong fall throughout December and a new decline in the last day of trading

Below is the monthly chart of the S&P 500 at the closing before Christmas.

Analysts have already calculated that this is the most negative December since 1931.

On the other hand, experts on the stock market reported to the concerned US Treasury Secretary Mnuchin that "nothing special is happening in the market" - this is just a normal correction.

And perhaps they are right.

A big crisis, usually does not occur only on falling stock market - even if it is very strong.

The real crisis is a negative GDP growth — that is, a decline in GDP instead of growth. A crisis is not a decline, but an increase in unemployment. This is the bankruptcy of notable companies, a drop in demand, falling production.

None of this is happening yet. Maybe just for now?

On the other hand - look again at the monthly chart of the S&P 500 below: for the entire period of growth since 2009, there has not been such a strong monthly drop. But before the crisis of 2008–2009, it was in the fall of 2007. Afterwards, many understood: it was the market (stock) that gave a leading signal, indicating the beginning of the crisis, - even before the economic indicators began to signal the crisis.

In short: it is now strategically quite dangerous to buy the US market - although prices are, of course, much more interesting than the highs of the year. But we need to understand that a new fall of another 20 percent over the next few months is quite possible.

It is also likely that the new market will go up - but it will be hard to sell when approaching the highs of 2018.

In the event of a crisis, we will definitely see negative economic indicators - and a new wave of sales in the stock market.