This stock-market shakeout looks a lot like 1996-97

It look a lot like 2018. Dangerous to try to extrapolate from past market behaviour. Every situation is unique and conditions today are not the same as they were in the 90s.

Conditions may differ, but the root human nature of greed and fear remains the same across time span. What is the primary driver of such stock market volatility? It is primarily greed and fear. The conditions and triggers, which may differs in degree and substance across time, that sparks further greed and fear are secondary contributors. The primary "pattern" will be more or less the same, repeated from past similar episode, but the degree (of volatility and time span) may differ.

Take for example, if I give you a price chart of say Bitcoin, and remove all labels so that you do not know what price chart it refers to. And I tell you that based on the history of the other price charts of other asset classes (also removed of all labels so that you do not have an idea of what price chart they refers to), can you extrapolate the further price movement of said Bitcoin price. I think you would be able to do so with some degree of success simply because the root primary driver behind these price movements remain the same.

I respectfully disagree.

First of all, I would recognize the price chart of bitcoin on D1 or higher because I've stared at it so much it's basically been burned into my long term memory.

Secondly, knowing that fear and greed are the driving forces of the market doesn't really tell us anything useful about the future. Equities are in decline but so is gold. There is no real fear present. How does the fear/greed thesis explain that?

Thirdly, if you are able to extrapolate/forecast the future from a price chart, it's not because you see similarities to charts in the distant past, but rather that you make generalizations based on abstract principles.

The author of the article predicts a quick resumption of the bullish trend because that's what happened in 1996, and because the correction happened more slowly than during other crashes, but that's ignoring a wide set of factors that are different now. Cyclical, technical and fundamental factors are different. I'm not saying there won't be a recovery/retrace, but I would not expect business as usual or for the future play out like 1997.

Feel free to disagree. I respect differences (in opinion) because I am wrong all the time.

Really? No fear? As long as there is uncertainties (which drive price movement because if there is no uncertainties there will be no buyer and seller who have different opinion and choose to counter-deal with each other at the same price), there is fear. Perhaps we are talking about a different definition of fear.

But one thing we have to recognize based on the "set of factors that are different now" is this recent downturn of pricing is a "correction" and not a bear trend. It cannot be a bear trend. Not when listed companies are NOT turning in a loss on a systemic basis. Not when the US economy is growing. Not when price inflation expectation is on the rise. Not when interest rate expectation is also on the rise. Not when Fed is heading towards on the path of tighter monetary policy. Not when Euro zone is also on the recovery and record healthier than ever growth numbers. (This is not making generalization based on abstract principles. But making generalization based on abstract principle is actually much much more powerful than otherwise.).

If it is a "correction" and not a bear trend, the pricing will go back up again. It is only a matter of time. As to the subject of timing, I concede here. No one can know the timing and therefore it is pointless to discuss the timing. You can pick on the author if he assume a "quick" recovery of pricing but with good probability, the pricing will go back up again in future (based on the "set of factors that are different now").

We'll see what comes next.

It looks to me that the smart money is pulling out of global equities, they know why..Technically speaking most major global indices including bitcoin have entered a short term bear market on the daily time frame. This is significant and buyer beware while these conditions prevail as prices can go much lower.