Mish Shedlock watching for a break of 2,600 on the S&P 500

In his latest interview with Jim Goddard, economist Mish Shedlock notes that all the major US indices are in correction mode and warns about a bear market that could last for years. 

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Mish is watching the 2,600 level closely. He notes that the S&P 500 has tested the 2,600 many times. If that level does break, Mish warns look out:

The next break is it. It might retest this level from below, but I think it is going to struggle to get above this level, not fall below it in the years to come.

It all adds up to the prospect of a bear market coming up.

On housing, Mish wouldn't be surprised if Ross Kay's scenario of a multi-year Canadian down trend happens. He describes the housing bubbles in Canada and Australia as being bigger and different than the American experience.

In Europe, Mish points out that recent moves by France to provide benefits to protestors will put stress on the EU budget process. The French budget is deficit expected to jump to 3.6% of GDP which is above EU deficit limits. This is taking place at the same time as the EU is cracking down on Italy for not meeting its budget targets

The have decided to make a test case out of Italy. They are going to have a real hard time doing if they let France get away with this.

On the prospect of a no-deal Brexit, Mish suggests that the whole idea of a no-deal is wrong.

It's not really a no-deal Brexit. The UK would be under WTO rules if they escaped and in the meantime the UK and the EU are working out all kinds of tweaks on all kinds of things to make sure that medicine keeps flowing, that air traffic is allowed to go from the UK to Germany to France to wherever, that the tunnel under the English Channel remains open....

Mish suggests that the debate should centre about whether there will be a Theresa May deal or a WTO-type of deal.

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