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The Next Great Depression - A Massive Shift Soon I've written at length about how I feel about the stock market. I've talked about how price action closely resembles the years leading up to the Great Depression, and I've also discussed why I think a large crash needs to happen in order for some structural changes to be made. Here are a few of those posts: Where I called a potential blow-off top: Where I talk about why I think a crash is necessary: A crash can happen for any number of reasons. Humanity has grown exponentially in the last 200 years. This causes stresses on our economy, environment, and our species as a whole. When any number of things happen (war, environmental change, viral epidemics, even greed itself), our society's fragility becomes exposed. Right now, it happens to be COVID-19 (the new coronavirus), but it could be anything. Any external variable that puts stress on our infrastructure has the potential to expose the flaws in our hyper-connected, top-heavy world. What do I mean by top-heavy? I mean it in terms of wealth concentration. In the event of disaster, the bottom 90% of the world has very little resources to protect themselves. When you have a top-heavy system built on a shaky foundation...you can guess what would happen. From a technical standpoint, yes, stocks can continue to go up until at least the U.S. Presidential election. Perhaps the DJI can surpass 30K or even 40K, but ultimately I think we'll visit some lows not seen in many years. This can easily be the top here as well, with major indexes unable to invalidate the major bearish divergence on the monthly chart (drawn above). No one can time it perfectly, but I do continue to believe that this current rally is a "seller's rally" or an opportunity for people to take their money and run. I think today's selloff resulted not only from fears of the virus disrupting major supply chains and global economic efficiency, but from the rise of Bernie Sanders. A Bernie presidency would likely send markets reeling, in a period of major economic uncertainty. Regardless of whether or not his policies are a good idea in the long run, I think it could cause some serious upheaval in the short term. I think some stock traders are anticipating a rise in democratic socialism, and trying to front run a deeper market selloff. Once we get a drop (and I do think we're in for a MAJOR stock market selloff), how low we go will really depend on how our governments react to it. It can go far lower than probably most people are expecting, simply from a technical standpoint. The technicals just show the parabolic growth. As I mentioned above, parabolic growth cannot be sustained because of how stress on the system impacts the fragile underlying nature of such growth. What we've seen over the last several decades is not slow, sustained growth. It's not healthy. And I think this will be exposed soon. Looking at the linear chart for the S&P 500, it can drop 50% and still be at the 200 Month Moving Average. That's how overextended this rally is. In conclusion, I think there will be a massive shift in financial markets, the ripple effects of which can last decades. I think it will take this much time for things to get sorted out. Of course, I may be wrong. All I'm doing is speculating, observing, and offering my opinion. This is not financial advice. -Victor Cobra
TVC:SPXShort
by VictorCobra
10
MGNT market demonstrates the bullish intentionsWhy we have a triangle form (1) of the profile? Because of the massive wall (2) of the Buy-Limits orders below 4k level. This is why we have POC line under 4k line. The majority thinks: "OMG, this stock is going to hell! It broke down 4k, it likely to go to 3k! I should sell it!" "Thank you for cooperation! I buy it" - say professional. This is why an army of bears has smaller progress in each attempt despite the valid downtrend. Look. Here (3) was the bearish attempt on the high volume. What the result from effort? (4) - quick recovery. All bearish success from December was quickly erased by the January pump. Outlook is mid-term bullish
RUS:MGNTLong
by fintechzoom