The Asset Bubble And The Decline Of The Dollar
已更新
What??? Victor Cobra is now bullish on the stock market? Yup, well, the jig is up. Because the initial crash was caused by a global pandemic, it has forced continued loose monetary policy and dollar printing to keep the desperately struggling middle class from descending into chaos. Issues which were present before the pandemic are now becoming too obvious to ignore. Evidently, the FED will continue to ignore these issues at the expense of financial ruin. They won't try to curtail the problem until it's too late. Here is my previous USD/DXY analysis, published over 1.5 years ago: 
In my last stock market analysis, I noted the possibility that bottom had been hit. I actually anticipated the massive drop well before the pandemic, but calling a bottom is more difficult.
I gave a couple of things to look for, and those bullish scenarios have played out. The result is that markets have been rallying non-stop. Even experts are now starting to worry about a bubble. The charts are now starting to look like 1926, before the true mania period that lead to the tightening of monetary policy in 1929 and the depression for equities. Formation wise, the charts still look quite similar: 
From the support test at the orange trendline until 1929, the DJI increased by a factor of 2.85. If the DJI did the same today, that would bring the long term top to 50K and above by 2023!
Where does this put the NASDAQ? If it continues to outperform, perhaps 20000/200.
Assets are in a bubble because people want to be in anything except the dollar. Metals, techquities, cryptocurrencies, pharmaceutical companies, collectibles, and anything that can be seen as a store of value. Right now, we're in an interesting predicament. While the average American faces a Great Depression (something I somewhat anticipated although not in the way things have played out), assets have allowed the wealthy to experience the roaring 20's, and it might not be over yet. This is something I didn't necessarily foresee, but my mistake was very similar to Ray Dalio's. Check out his online book - Principles/The New World Order. Highly recommend it.
We now have two different factions of society experiencing vastly different realities. How will it end? No one knows. But I think the dollar will continue to decline towards the 60's, and the U.S. will lose its foothold on the world economy, eventually becoming more insular. This can nonviolent or violent international conflict, a fascist turn (already seeing some of this), or a socialist turn with heavy taxes on the wealthy. Prior to the 80's, the income tax on the wealthy was 70%!!
Regardless of what happens, I think there's a lot of suffering ahead. Until the wealthy begin to see massive losses, we haven't seen anything. This is the roaring 20's where the party is only a small portion of the population. Once the wakeup call comes, my hope is that we'll see some massive financial restructuring.
This is not financial advice! Just my opinion on the markets based on my own observations. This should be used for speculation, education, and entertainment only.
-Victor Cobra
In my last stock market analysis, I noted the possibility that bottom had been hit. I actually anticipated the massive drop well before the pandemic, but calling a bottom is more difficult.
From the support test at the orange trendline until 1929, the DJI increased by a factor of 2.85. If the DJI did the same today, that would bring the long term top to 50K and above by 2023!
Assets are in a bubble because people want to be in anything except the dollar. Metals, techquities, cryptocurrencies, pharmaceutical companies, collectibles, and anything that can be seen as a store of value. Right now, we're in an interesting predicament. While the average American faces a Great Depression (something I somewhat anticipated although not in the way things have played out), assets have allowed the wealthy to experience the roaring 20's, and it might not be over yet. This is something I didn't necessarily foresee, but my mistake was very similar to Ray Dalio's. Check out his online book - Principles/The New World Order. Highly recommend it.
We now have two different factions of society experiencing vastly different realities. How will it end? No one knows. But I think the dollar will continue to decline towards the 60's, and the U.S. will lose its foothold on the world economy, eventually becoming more insular. This can nonviolent or violent international conflict, a fascist turn (already seeing some of this), or a socialist turn with heavy taxes on the wealthy. Prior to the 80's, the income tax on the wealthy was 70%!!
Regardless of what happens, I think there's a lot of suffering ahead. Until the wealthy begin to see massive losses, we haven't seen anything. This is the roaring 20's where the party is only a small portion of the population. Once the wakeup call comes, my hope is that we'll see some massive financial restructuring.
This is not financial advice! Just my opinion on the markets based on my own observations. This should be used for speculation, education, and entertainment only.
-Victor Cobra
註釋
Interestingly enough, the market is struggling here, big time. Clearly the lack of stimulus is causing stocks to turn lower again (not a good sign, in general). This idea may end up getting invalidated if SPX cannot hold the 50m MA (currently around 3139). To resume bullish momentum, stimulus will need to be passed. Otherwise, a broadening top can play out. Everyone seems to be "killing it" on Robin Hood these days. That's not a good sign. 註釋
Ultimately, I do expect a decline that severe, but this idea is about how long the money printer can hold up the market. If SPX doesn't go much lower here, I can see some sideways movement and volatile chop through the election. A lot may depend on what happens politically over the next few months.
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