I try very hard to avoid starting with a bias and then charting, as there is a serious risk then that I would find evidence to support my expectations rather than form my expectations from the charts. I've been posting some potentially very bearish charts lately, but that's not because I look for bearish charts in particular, it's because they are almost everywhere I look on longer timescales. Will they play out? Hard to say, but what I do know is that when these have formed in large numbers in the past they have frequently played out afterwards, so that's worth bearing in mind.
There are many who believe that the markets cannot fall hard here because they are being indirectly supported by central banks on a large scale. Well, they are of course, but the only major industrialised nation that has run these sorts of policies before is Japan, where they have been running them so far for the 22 years of their on and off depression, and the Nikkei is currently at slightly over 20% of their 1990 peak (editor's note for clarification – in other words, they have lost 80%). What are the lessons to draw from Japan? Well at the least the lessons are that these policies can extend a crisis indefinitely, while depressing all asset prices and driving the state towards bankruptcy. That's not an encouraging example.
