The volatility will continue week August 1 and a rally might occur if the U.S. debt ceiling is lifted.
However the big dark clouds will not go away. The U.S. Chicago Fed National Activity Index was in June very close to a new recession. We might already be there now. No debt ceiling lifting will change this very broad measurement with 85 components. The chart from 2006 shows a very big double top which is broken on downside indicating to me that the same deep recession we had 2008 will occur quite soon. The American wages is below inflation and the outlook for unemployment seem negative. House prices continue to fall and Asia is less keen to buy U.S. debt. The consumer sentiment in the U.S. as well as in Europe is very low and interest rates are going up in Europe including England where BOE has not raised rates. Inflation is increasing all over the world. Many murky outlooks from the July industry reports. Gold is rising sharply indicating inflation is rising and paper money is less attractive.
These facts cannot be changed because of trouble with debt in the U.S. and the Eurozon countries. This accelerating slowdown will run its course and it indicates to me together with the technical outlooks for stocks, bonds, precious metals and the main currencies that we will have a very long recession.
The stock market crash of 2008 did not run its course because the central banks flooded the markets with money to save banks and help consumers. That flooding however did not create jobs. Now all countries are in deep debt so there is no help this time and I think many banks will collapse on bank runs when the downtrend accelerates.