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The end of the US stock market is nearing

  • #21
  • Jul 6, 2019 12:42pm Jul 6, 2019 12:42pm
Quoting k4y
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?
#Anthonywins
  • #22
  • Jul 6, 2019 1:59pm Jul 6, 2019 1:59pm
Quoting Igrok
... I personally don't trade stocks but ...
...this shows. People have been yelling top for years. A broken clock will be right, eventually...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #23
  • Jul 6, 2019 6:48pm Jul 6, 2019 6:48pm
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.
  • #24
  • Jul 6, 2019 8:51pm Jul 6, 2019 8:51pm
Quoting Edd111111
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....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #25
  • Edited 10:47pm Jul 6, 2019 10:31pm | Edited 10:47pm
Quoting The Fool
{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...
  • #26
  • Jul 6, 2019 10:34pm Jul 6, 2019 10:34pm
yawn.....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #27
  • Jul 6, 2019 10:36pm Jul 6, 2019 10:36pm
Quoting The Fool
{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...
  • #28
  • Jul 7, 2019 3:13am Jul 7, 2019 3:13am
Quoting Igrok
{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......
  • #29
  • Jul 8, 2019 4:25am Jul 8, 2019 4:25am
Quoting Igrok
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
  • #30
  • Edited 11:38am Jul 10, 2019 3:32am | Edited 11:38am
What will happen with the Stock market when the 4th quarter earnings come true ?!

Sixer

Edit:
See Powell comment at todays Senate hearing !!
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  • #31
  • Jul 10, 2019 7:02am Jul 10, 2019 7:02am
A transition region for NASDAQ 100:
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  • #32
  • Jul 10, 2019 12:08pm Jul 10, 2019 12:08pm
Are you really sure about your NDX outlook ?

Sixer
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  • #33
  • Jul 10, 2019 2:03pm Jul 10, 2019 2:03pm
Quoting Sixer
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.
  • #34
  • Jul 10, 2019 7:50pm Jul 10, 2019 7:50pm
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Invest in Life
  • #35
  • Jul 11, 2019 11:57am Jul 11, 2019 11:57am
Quoting Igrok
{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
  • #36
  • Jul 11, 2019 4:10pm Jul 11, 2019 4:10pm
Quoting chongrudy12
{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.
  • #37
  • Jul 11, 2019 5:13pm Jul 11, 2019 5:13pm
Quoting timingchain
{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...
  • #38
  • Edited 6:02pm Jul 11, 2019 5:45pm | Edited 6:02pm
Quoting chongrudy12
{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...
  • #39
  • Jul 11, 2019 6:41pm Jul 11, 2019 6:41pm
Quoting timingchain
{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.

Sure I have a trading plan. Buy low. Sell high. What's yours?
  • #40
  • Jul 12, 2019 12:28am Jul 12, 2019 12:28am
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
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