Where is the Bottom ?
It seems that there is a lot talk about this bottom stuff, when the real issue is to face up to where was the Top, the Top that was built between February 2014 and May 2015. Now why would anyone other than a short-term trader try to find a bottom? This Macro decline hasn’t really begun yet.
A simple way to look at this is to look at the Oil ETF “USO” and the Oil Stocks ETF “XLE”. In my view the XLE is a good proxy for the S&P, it is full of a lot of QE stuff. The ratio between XLE and USO has gone from 1:1 in 2008 to 6:1 today. My contention is that until XLE trades under USO you will not have a confirmed bottom. Granted that this will probably not happen right at the bottom but lets just say it happens when USO goes up to 16.00 from the 8.75 today. A drop for XLE to 16.00 from the 53.88 today will open some eyes.