Forex Factory (https://www.forexfactory.com/forum.php)
-   Trading Discussion (https://www.forexfactory.com/forumdisplay.php?f=11)
-   -   The end of the US stock market is nearing (https://www.forexfactory.com/showthread.php?t=929914)

Igrok Jul 4, 2019 2:31am | Post# 1

The end of the US stock market is nearing
 
1 Attachment(s)
DJIA and S&P have reached their new historical highs yesterday... for the Dow it means that the bullish wave that started forming on December 26, 2018 and which bottomed out at 21712,5 is gonna be the last one on its predominantly bullish historical chart... so. the market is likely to reach its absolute top before the end of this year... most likely even before the end of September, 2019... from that point it is quite likely to turn around and to target the lows of 2009 once again thus reaching 5000-5500 level within the next 3-5 years... seems like another Great Depression 2.0 is on the cards.... this projection chart below seems as the most likely case scenario for the Dow in the not so distant future... before that a reversal single-diagonal diamond is also quite likely to be formed...
Click to Enlarge

Name: DOW projection.jpg
Size: 106 KB

Edd111111 Jul 4, 2019 6:34am | Post# 2

Hi Igrok, I appreciate you making this forecast, what is the chance that the other half of the diamond will play out as you have demonstrated ?

alphadude Jul 4, 2019 6:59am | Post# 3

everything is possible, it may continue to go up, or reverse. we just follow the price.

i once held facebook stock at $80, and sold at $100 thinking it cant go up more. now it is north of $197

never say never

best to avoid forecasting all together.

havo Jul 4, 2019 8:10am | Post# 4

everything is possible, it may continue to go up, or reverse. we just follow the price. i once held facebook stock at $80, and sold at $100 thinking it cant go up more. now it is north of $197 never say never best to avoid forecasting all together.
This..

Just trade what the price its telling you.. always; forecast are "sketchy" at best =)

Sixer Jul 4, 2019 9:26am | Post# 5

1 Attachment(s)
Igrok,

your outlook for decisive lower prices of Dow comes way too early.

See the latest chart of the LEIs index compared to the S&P.

Sixer
Click to Enlarge

Name: LEIs vs.S&P-21.6.19.gif
Size: 51 KB

Igrok Jul 4, 2019 9:57am | Post# 6

1 Attachment(s)
There are in fact several reasons for such a forecast. Some are purely technical and some are not.
The technical ones are more or less obvious. First of all there is a measured objective target for the previous large DJIA diamond that was formed on the graph between 2014 and 2016.... you can see it here on the chart as well... that MOT is located at about 27250 and hasn't been reached yet...
the second reason is that since yesterday the current chart has been confirmed as forming a broadening triangle, that has a great potential to turn into a single-diagonal reversal diamond... in this case the whole previous uptrend has to be reversed and fully covered back to the lows of 2009 levels again... though, regardless of that potential the market still owes a sizable retracement back at least to the levels where the previous 2014-2016 diamond has been formed... here is another picture of that older diamond...
non-technical reasons are also based on some past history and such a simple things as common sense for instance... nothing has actually changed much in the US economy since 2008-2009... the entire rise in the stock market value doesn't have any reasonable explanation... the Dow has quadrupled in its value since 2009 bottoms despite the economy is not in better shape today that it was back then... it's been inflated for no apparent reason and must come back to normal... we have already witnessed such an example... NIKKEI was trading at around 40000 mark back in 1990 and then within a few years it just dropped to under 8000 mark... by now, almost 30 years later, it hasn't recovered even a half on its drop back then... and besides, those who know me for a long time should remember that I have successfully predicted all the major changes in the markets starting from 1998 usd/jpy drop and all the way to 2008 crisis which I foresaw coming about 6 months in advance... I would say that the probability of the DJIA to revisit 18000 level is 100% and the probability for it to drop to around 5500 is about 70-75%... the market is likely to top out before the end of this September... and it's gonna be forever... shouldn't fully recover in our lifetime...
Click to Enlarge

Name: dow add.jpg
Size: 110 KB

timingchain Jul 4, 2019 10:43am | Post# 7

Fundamental issues include the massive, unprecedented global debt levels. When defaults begin, a cascade effect could develop with the potential to drive interest rates back to highs of the 1980s & 1990s. Until then, interest rates must be kept near zero to keep governments and major corporations from default.

The NQ could drop 80% or more in a crash similar to 2000-2001 crash.

milicentfx Jul 4, 2019 10:52am | Post# 8

its the end of the world as we know it

Inserted Video

Sixer Jul 4, 2019 11:02am | Post# 9

1 Attachment(s)
Why don`t you wait with your prediction until wave "V" (black) is finished ?
It started with correction patterns which indicates an Ending Diagonal.

Sixer
Click to Enlarge

Name: EW-DJI(D)-3.7.19.gif
Size: 42 KB

Igrok Jul 4, 2019 11:29am | Post# 10

Why don`t you wait with your prediction until wave "V" (black) is finished ? It started with correction patterns which indicates an Ending Diagonal. Sixer {image}
it doesn't really matter at this moment... diamond or not, quite a sizable drop is imminent... at least back to 18000 level... NIKKEI for example had never actually formed anything reversal vise on the very top and the drop was quite unexpected in the form of a V-formation.... and I posted my view not just for active traders... there are lots of individual investors around as well... and they all have to see ahead of time what's coming ... people need some time to think about it... some have to liquidate their long positions, to pull their investments out and perhaps even to develop a strategy that would allow them to earn something by shorting individual stocks and indices...people have to have enough time to reallocate their money ahead of the crisis... I don't know what it might be... perhaps CFD's or something... as usual all the lemmings will drawn themselves anyways... like Lehman brothers and many others did back in 2008... and this time it's quite unlikely that there will be any safe heavens... I personally don't know what to recommend as an alternative investment... the time for conventional investing is gone... only speculations are likely to make sense from now on... from my perspective anything at and above 27250 on the DJIA is a strong sell...

FxNature Jul 4, 2019 12:45pm | Post# 11

Why don`t you wait with your prediction until wave "V" (black) is finished ? It started with correction patterns which indicates an Ending Diagonal. Sixer {image}
If you inverse LTD looks more logical I suppose...

Greetings

Sixer Jul 5, 2019 3:42am | Post# 12

1 Attachment(s)
FxNature,

the Matrix Add-On you are refering to contains a BUG.
The gif shows a Copan count + comments of the S&P which shows the correct position of the MC3 (LTD) turning points. An inversion is incorrect.
LTD-2, LTD-4 etc. are Highs; LTD-3, LTD-5 etc. are Lows

Sixer
Click to Enlarge

Name: MC3-Inversion.gif
Size: 209 KB

chongrudy12 Jul 5, 2019 7:53pm | Post# 13

DJIA and S&P have reached their new historical highs yesterday... for the Dow it means that the bullish wave that started forming on December 26, 2018 and which bottomed out at 21712,5 is gonna be the last one on its predominantly bullish historical chart... so. the market is likely to reach its absolute top before the end of this year... most likely even before the end of September, 2019... from that point it is quite likely to turn around and to target the lows of 2009 once again thus reaching 5000-5500 level within the next 3-5 years... seems...
so im going to assume you placed a short on sp? if youre so confident in this analysis

biDc Jul 6, 2019 1:51am | Post# 14

What kind of catalyst would you anticipate driving the downturn? In the early 2000s it was the tech bubble and the 2008s subprime mortgage.

Sixer Jul 6, 2019 4:39am | Post# 15

1 Attachment(s)
If the DAX is following the dates of the Delta cycles in the Medium Time frame (red), the next Low is at the 24.7.

Sixer
Click to Enlarge

Name: D-DAX-5.7.19.gif
Size: 50 KB

Igrok Jul 6, 2019 4:52am | Post# 16

{quote} so im going to assume you placed a short on sp? if youre so confident in this analysis
it's not the top yet... a couple more months has left perhaps... I personally don't trade stocks but have already warned all my friends and investors about this potential problem to emerge quite soon...

Igrok Jul 6, 2019 4:58am | Post# 17

What kind of catalyst would you anticipate driving the downturn? In the early 2000s it was the tech bubble and the 2008s subprime mortgage.
any financial crisis gets so devastating because it wasn't expected thus couldn't be predicted in advance... "black swans" occur when almost no one can see them coming... same thing must be this time as well...

Igrok Jul 6, 2019 5:01am | Post# 18

If the DAX is following the dates of the Delta cycles in the Medium Time frame (red), the next Low is at the 24.7. Sixer {image}
likely to form a double top on the DAX...

k4y Jul 6, 2019 6:48am | Post# 19

This is the most ridiculous and unrealistic market prediction I have ever read! You do realize that US stocks ain't Bitcoin, right?
The only scenario I can think of that could drop US stocks down to level 5000 within the next 3-5 years is if AOC would become the next POTUS!
If Trump gets reelected, I have no doubt at all that the market will remain bullish until 2024.

Igrok Jul 6, 2019 9:30am | Post# 20

1 Attachment(s)
This is the most ridiculous and unrealistic market prediction I have ever read! You do realize that US stocks ain't Bitcoin, right? The only scenario I can think of that could drop US stocks down to level 5000 within the next 3-5 years is if AOC would become the next POTUS! If Trump gets reelected, I have no doubt at all that the market will remain bullish until 2024.
no need for a wild imagination... something like that had already taken place before... here is the NIKKEI 250 historic chart... January 1990 - top at 39260.0... March 2009 - bottom at 7021.3... drop - 82,12 % in 10 years... at that time, in the first half of 90's, Japan had the second largest economy in the world...
besides, do you realize that I have been a professional trader and a capital manager for 26 years and might know the difference?
Click to Enlarge

Name: NIKKEI.jpg
Size: 113 KB

AnthonyWins Jul 6, 2019 1:42pm | Post# 21

This is the most ridiculous and unrealistic market prediction I have ever read! You do realize that US stocks ain't Bitcoin, right? The only scenario I can think of that could drop US stocks down to level 5000 within the next 3-5 years is if AOC would become the next POTUS! If Trump gets reelected, I have no doubt at all that the market will remain bullish until 2024.
I suppose that it should be a correction but not so deep.
Your statement about Trump... Why do you think so, because of he said it?

The Fool Jul 6, 2019 2:59pm | Post# 22

... I personally don't trade stocks but ...
...this shows. People have been yelling top for years. A broken clock will be right, eventually...

Edd111111 Jul 6, 2019 7:48pm | Post# 23

Hi Fool,
I enjoy your posts you often have great points to make. Using logic, if people have been yelling top for years then surely they must be closer to be right than wrong, that is, time is approaching the stuck hands.
Stock markets at all time highs and interest at all time low's, considerable credit and many countries with debt in foreign currency (meaning that those countries don't have control of the interest rate) an example is Australia (approx 1.5 Tril of the 2 Tril in foreign currency). unfortunately wage growth has been stifled and the markets have moved on some 300% since 2009, which is likely to contribute to a correction as consumers are unable to purchase goods at rates to sustain growth. interest rates cant be cut much to sustain growth or fuel growth as they are so low, leaving printing as the only option for Central Banks. This creates "visible" inflation (Visible to the general public as they generally don't see asset inflation in the overall markets). War can exacerbate the need for printing or rate hikes which will ruin other countries with foreign debt. If central Banks went for negative interest rates, I don't imagine China and Japan permitting roll over of debt unless they are permitted to print like there is no tomorrow in USD. Basically the global environment is stretched and starting to be pained (domestic defaults on the rise in many countries ), with trade wars etc it wont take much at this point to tip the balance to a lower level in markets. It what happens as the markets fall that determines how far and how hard they fall, i.e central banks and political reaction to the Public pain. Or it could just keep going up for ever. Better to have a plan and not need it than vice versa.

The Fool Jul 6, 2019 9:51pm | Post# 24

Using logic, if people have been yelling top for years then surely they must be closer to be right than wrong, that is, time is approaching the stuck hands.
Nothing is any more bearish now than it was 1, 2, 3,.....years ago when people were yelling top. Stocks will continue to be the least ugly alternative for yield seekers as bond yields crater. Nobody believes the current Fed is anything other than Wall Street's personal ass whore. I have to say BTFD is still the word for US equity and options traders....

Igrok Jul 6, 2019 11:31pm | Post# 25

{quote}...this shows. People have been yelling top for years. A broken clock will be right, eventually...
It doesn't show anything other than that I know how to analyze charts regardless of what they represent... I have nothing in common with "people that have been yelling top for years" because over the past 20 years I called both major recessions in the stock market correctly in timely manner and my friends/clients/investors actually benefited from it despite me personally have never been interested in trading stocks for myself...

The Fool Jul 6, 2019 11:34pm | Post# 26

yawn.....

Igrok Jul 6, 2019 11:36pm | Post# 27

{quote}Nothing is any more bearish now than it was 1, 2, 3,.....years ago when people were yelling top. Stocks will continue to be the least ugly alternative for yield seekers as bond yields crater. Nobody believes the current Fed is anything other than Wall Street's personal ass whore. I have to say BTFD is still the word for US equity and options traders....
in fact there is a huge difference on the charts between now and back then... if you or others don't see that then it's not my problem... someone has to lose...

yonnie Jul 7, 2019 4:13am | Post# 28

{quote}... and this time it's quite unlikely that there will be any safe heavens..
the safe haven could be people buying the yen like in 2008; it looks like its happening already......

Jmfx1 Jul 8, 2019 5:25am | Post# 29

DJIA and S&P have reached their new historical highs yesterday... for the Dow it means that the bullish wave that started forming on December 26, 2018 and which bottomed out at 21712,5 is gonna be the last one on its predominantly bullish historical chart... so. the market is likely to reach its absolute top before the end of this year... most likely even before the end of September, 2019... from that point it is quite likely to turn around and to target the lows of 2009 once again thus reaching 5000-5500 level within the next 3-5 years... seems...
I agree with this theory Igrok. Moving away from technical views.. the Bond market has been flashing warning signals for quite some time. US10Y dipping sub 2.0% for the first time since November 16 and global & US debt at ATH, no wonder we see Gold prices start to rally. I think if the FED were to lower IR (as anticipated in July) we could see US equities making ATH's again but I think this will be driven by retail moves and just increase the size of a 'bubble' before an eventual crash.

Thanks
JM

Sixer Jul 10, 2019 4:32am | Post# 30

3 Attachment(s)
What will happen with the Stock market when the 4th quarter earnings come true ?!

Sixer

Edit:
See Powell comment at todays Senate hearing !!
Name:  Earnings-2019.gif
Views: 706
Size:  5 KB
Name:  Earnings2-2019.gif
Views: 699
Size:  5 KB
Click to Enlarge

Name: Powell.gif
Size: 239 KB

timingchain Jul 10, 2019 8:02am | Post# 31

1 Attachment(s)
A transition region for NASDAQ 100:
Click to Enlarge

Name: $NDX_W1_20190709.png
Size: 68 KB

Sixer Jul 10, 2019 1:08pm | Post# 32

1 Attachment(s)
Are you really sure about your NDX outlook ?

Sixer
Click to Enlarge

Name: EW-NDX(120)-10.7.19.gif
Size: 66 KB

timingchain Jul 10, 2019 3:03pm | Post# 33

Are you really sure about your NDX outlook ? Sixer {image}
The FedRes can always intervene to further inflate the bubbles. Normal behavior can be broken by them.

Mundo Jul 10, 2019 8:50pm | Post# 34

1 Attachment(s)
Click to Enlarge

Name: 13517589_10154317908834846_5145189757881005915_o.jpg
Size: 228 KB

chongrudy12 Jul 11, 2019 12:57pm | Post# 35

{quote} it's not the top yet... a couple more months has left perhaps... I personally don't trade stocks but have already warned all my friends and investors about this potential problem to emerge quite soon...
hmmm well value is value, if youre 99% sure of a crash why wouldnt you short it? seems like that would be refusing easy money. Anyway, like you said, few more months. i dont make predictions so i cant really argue, however its always interesting to see how others perceive the market. Hope you cash out one day on this prediction because it would be silly not to

timingchain Jul 11, 2019 5:10pm | Post# 36

{quote} hmmm well value is value, if youre 99% sure of a crash why wouldnt you short it? seems like that would be refusing easy money. Anyway, like you said, few more months. i dont make predictions so i cant really argue, however its always interesting to see how others perceive the market. Hope you cash out one day on this prediction because it would be silly not to
Trading equity indices as futures can be more profitable than individual stocks.

Igrok Jul 11, 2019 6:13pm | Post# 37

{quote} Trading equity indices as futures can be more profitable than individual stocks.
seems like that... besides we have to keep in mind that unexpectancy is a necessary feature for each and every next financial/economic crisis... therefore the reasons for it must not be seen by the vast majority of the markets' participants in advance...thus it must be somehow hidden from everyone's' view and not in the plain sight... the first negative shift in the market must be absolutely sudden and quite sizable in order to cause maximum damage and panic... and also it has to occur during a period of people's euphoric state of mind... otherwise the lemmings will not fall into a trap and might refuse to drawn themselves all at once...

Igrok Jul 11, 2019 6:45pm | Post# 38

{quote} hmmm well value is value, if youre 99% sure of a crash why wouldnt you short it? seems like that would be refusing easy money. Anyway, like you said, few more months. i dont make predictions so i cant really argue, however its always interesting to see how others perceive the market. Hope you cash out one day on this prediction because it would be silly not to
I agree... and definitely I will find a way to do that...all the crisis years had been quite profitable to me... the most profitable was year 2008 when I benefited from my correct prediction indirectly by taking a series of shorts on EUR/JPY and catching almost the entire drop on it between 169.40 and 117.00 in August-November of that year... my initial stops on the first position were just 10 pips above and then I were only adding more and more short positions to the initial one also using trailing stops and never actually risking anything... I guess I will be able to do something like that this time as well...

Trainman Jul 11, 2019 7:41pm | Post# 39

{quote} The FedRes can always intervene to further inflate the bubbles. Normal behavior can be broken by them.
They can and do intervene, but their primary method is to lower interest rates, and they now have less room than usual to do that. Lowering interest rates serves to increase money in circulation by encouraging borrowing. But the US and the world are already carrying absurd levels of debt and they can't keep stretching that rubber band forever. The Fed can inflate the credit bubble further, but they won't be able to postpone the inevitable unwinding of that debt indefinitely and their attempts to cheat that part of the credit cycle will only prolong and worsen the pain.

Consider the Global Financial Crisis (GFC). Its beginnings are rooted in events long before 2008 and it factually hasn't ended yet. On September 11, 2001, the Fed rate was around 6.5%. Immediately following the events of 9/11 the Fed dropped the rate to about 1.25% (the exact rates might be off a bit, I'm only going from memory here -- the bean counters can look up the exact numbers) to preemptively cushion the economic impacts. Interest rates remained abnormally low for several years. One consequence of that was mortgages became much cheaper, and there was huge a wave of mortgage refinancing in the 2002 - 2005 time period. Another consequence was that people found that they could now afford a house with a bigger price tag while keeping the monthly mortgage payment the same, thus the number of house buyers increased, driving real estate prices up. Rising prices drew in speculative buying, driving prices even higher. Eventually this period of abnormally low interest rates also led to less qualified buyers entering the market, which is where you generally see the blame placed for the GFC, but factually over-leveraging was going on at all levels of the market. Ordinarily, a period of rising interest rates would result in over-leveraged borrowers being forced to liquidate, the market would go through a recessionary phase in response, and then growth would resume. However, because interest rates were held so low and for such a long duration, the sheer numbers of over-leveraged buyers that had built up threatened the solvency of the entire banking system.

The central banks (CBs) managed to avert the big reckoning that was due as part of the GFC but since then the consequences of their intervention have been

  1. buildups of debt that now greatly exceed levels seen at the peak of the GFC;
  2. permanently lowered CB interest rates and permanently swollen balance sheets, hobbling their ability to effectively intervene in the next crisis;
  3. huge numbers of both private sector and public sector borrowers becoming dependent upon unnaturally low interest rates -- any increase towards natural rates would quickly lead to cash flow crises and insolvency.

Thus the CB interventions only postponed the inevitable unwinding that is yet to come ... as well as making its ultimate severity much greater.

Igrok is quite correct that this one is going to be a big one, and its effects will be felt for decades.


Sixer Jul 12, 2019 1:28am | Post# 40

1 Attachment(s)
I agre with you that we will have a severe crash.

But the best crash indicator i have found (Spread 10y-2y T-Notes) is still positive. It is a frontrunner: It must be negative and turn.

Sixer
Click to Enlarge

Name: Zinsspanne-11.7.19.png
Size: 20 KB


© Forex Factory