I think we're about to end a 90 year cycle for global markets, meaning that we could get a crash similar in magnitude to the Great Depression. There are just too many technical sell signals to ignore, and fundamentally there is no reason for the market to continue rising if data shows that growth is slowing down. Both indexes are well above their long term trends, the DJI is at a long term trendline resistance, and we have a glaring bearish divergence on the monthly oscillators. All large market crashes in history were preceded with a bearish divergence on the monthly chart. This is when price makes a higher high, but the oscillator makes a lower high, showing lack of confidence in the move. I've even drawn those out for your viewing pleasure. On the recent high, we can observe what is arguably the largest bearish divergence the stock market has sever seen, even when compared with The Great Depression! Check it out:
Above, I drew what could easily happen to the DJI if it breaks down. We're now even further from all our moving averages AND the timeframe is longer. What this means is that it may take us at least 4 years to even reach bottom, and by that time, the Dow Jones may have declined back towards 10,000 or below. I think it does need to test the long term uptrend, which hasn't happened since 1982. We're long overdue for an extended period of stagnation, in my opinion.
Aside from indicators, there's also this fractal that I've been talking about for a year now. On this speculative chart, I outlined a possible move towards 40,000 or above, but we may actually never get up there, given the size of this divergence. The higher we go, I think the larger the drop will be.
The market has been cannibalized by big tech, and supported by lazy and complacent consumers. Suicide and drug addiction has exploded in the United States over the last decade, and this is because we have a population that doesn't have the resources to take care of itself. All they can do is buy. And buy on credit, obviously. Would a stock market crash make things worse? Perhaps in the short term, but I argue that this kind of "shakeup" is exactly what our disillusioned population needs. Something like that would provide more incentive to make change, and for people to really fight for their families and each other's lives.
I think a stock market crash would mean we would finally have the opportunity to make headway as a species. Rising market valuations lead to complacency, which leads to lack of policy change and the neglect of important issues like the wealth disparity and climate disaster. A big collapse would finally get people thinking ACTIVELY - and we'd be able to begin a new cycle with hopefully some positive direction. We must also be careful, because events like this can also lead to violence and the rise of fascism. Arguably, we're already seeing a rise in fascism on BOTH ends of the political spectrum. But these unstable periods also allow for art and culture to flourish in ways they haven't in quite some time. New opportunities for music, film, and visual art may present themselves, for people who need communities and activities to pass the time. Most people would probably agree that we're not seeing any sort of artistic Renaissance right now.
Anyway, that's it from me. I'm really curious to see if something like this ends up playing out. Linked below are my other write-ups on the stock market, including where I discuss a fractal I noticed in the Dow Jones.
This is not financial advice! This represents my opinion and one version of reality that may or may not be substantiated in truth. I like think I do my best to speak the truth, but I'm only a guy with an imagination. I do love to speculate though.
-Victor Cobra
Aside from indicators, there's also this fractal that I've been talking about for a year now. On this speculative chart, I outlined a possible move towards 40,000 or above, but we may actually never get up there, given the size of this divergence. The higher we go, I think the larger the drop will be.
The market has been cannibalized by big tech, and supported by lazy and complacent consumers. Suicide and drug addiction has exploded in the United States over the last decade, and this is because we have a population that doesn't have the resources to take care of itself. All they can do is buy. And buy on credit, obviously. Would a stock market crash make things worse? Perhaps in the short term, but I argue that this kind of "shakeup" is exactly what our disillusioned population needs. Something like that would provide more incentive to make change, and for people to really fight for their families and each other's lives.
I think a stock market crash would mean we would finally have the opportunity to make headway as a species. Rising market valuations lead to complacency, which leads to lack of policy change and the neglect of important issues like the wealth disparity and climate disaster. A big collapse would finally get people thinking ACTIVELY - and we'd be able to begin a new cycle with hopefully some positive direction. We must also be careful, because events like this can also lead to violence and the rise of fascism. Arguably, we're already seeing a rise in fascism on BOTH ends of the political spectrum. But these unstable periods also allow for art and culture to flourish in ways they haven't in quite some time. New opportunities for music, film, and visual art may present themselves, for people who need communities and activities to pass the time. Most people would probably agree that we're not seeing any sort of artistic Renaissance right now.
Anyway, that's it from me. I'm really curious to see if something like this ends up playing out. Linked below are my other write-ups on the stock market, including where I discuss a fractal I noticed in the Dow Jones.
This is not financial advice! This represents my opinion and one version of reality that may or may not be substantiated in truth. I like think I do my best to speak the truth, but I'm only a guy with an imagination. I do love to speculate though.
-Victor Cobra
評論:
I also want to emphasize that although I'm painting a gloomy picture here - global poverty continues to decline. We are technically still in better shape than we were in the 1800's, in terms of quality of life and life expectancy. I just think in order for us to make improvements to our current situation, the market needs to take an extended pause.
評論:
We may just continue up for a bit here, due to the positive job report. However, we do have bearish divergences on the daily chart as well. I'd still be careful with current stock market valuations. Often euphoria (and great unprecedented job growth) precedes a top.
評論:
Bearish divergence confirmed on the monthly. Interesting that this also happened the last time the market dropped this much. It told me not to trust this rally.
評論:
If DJI can rally back above 27000, I'll feel more confident again, and if SPX can get back above 3100. For now, this looks like a pretty severe bearish breakdown.
