We are at the last call and at the height of the Bear Market Rally. Below are some Key points for each case scenario, Bulls & Bears!
Bears: - 40MM people Unemployed / 25% UE - Recession Confirmed. Minimum of 2 Quarters of Negative Growth. - 100k+ Dead from Covid-19 and still growing! - Average Bear Market Rally lasts 68 days. We are currently at 62 days. - PEG Ratio is the highest ever, making this market the most overvalued in history - US/China Tensions are getting worse every week. Trade War & New Cold War is about to kick-off. - Bond Market has been dropping fast the last 90 days, heading to 0. - VIX has dropped into the 20's within that last 2 weeks. - Volume has been decreasing steadily over the last 6 weeks - Massive Stimulus and Debt Bubbles in Play (Fiscal Balance Sheets are highest ever, Debt-to-GDP is approaching 200% quickly), the money printing is going Ape Shit to new unheard of levels. - Gold has increased 40% in the last 60 Days - Top Investors (Buffet & Dalio) warn of difficult days ahead.
Bulls: - FOMO has kicked in & Newbie Retail buyers are pumping the market in hopes the FED has their back. - FED has initiated the largest QE Stimulus in US history, advises we will print & spend our way out of this. By All Means Necessary! - Economy is opening back open and the hope is that Covid-19 fades away and rehiring happens quickly. - Vaccine trials have began and hopes are we will have a vaccine by year's end.
Well Folks, I think I hit most of the major items here. It's Do or Die time for the market to correct. This is a pivotal stage and June is the pivotal month, so be careful out there. I personally think this will turn into the Biggest Short in modern times.
Take Care and intellectual criticism is always welcomed.
JP - OUT
코멘트
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FIBs were off a tad. Sorry about that. Here is the updated and correct chart.
2008 rally rolled over after it tapped 200 DMA on Day 63. If this is ABC correction, C = A would carry price back to 1800.
From EW, if March meltdown was Wave 1, we are ending Wave 2; and 3 incoming, typically these are 1.272 - 1.618 Fib extensions; first wave was 1200 SPX pips, 3 could go to -1500 > -1900; would end in box between SPX 1050 - 1550 which is astounding but not inconceivable.
We gonna get mortgage crisis on top of the COVID crash when the unemployed can't pay for their homes this Fall.
Deferral programs are not a favor; if I can't pay one month now, HTH am I likely to pay 4 months' lump sum in August?!
Ty for post very thorough covered all salient points IMO! GLTA!
jpreal1
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@DaddySawbucks, We are on the same page. Great comment on EW and DMA
ProfitHarvest
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Sick fundamentals roundup! Right on point.
Also add in that VIX and TVIX both hit their lows May 12th, no retest since yet SPX retested recent highs. Very bearish here.
Nice work mate, even though I do belive there is gonna be another leg down, I appreciate you gave reasons for both possibilities. You are only missing one point in bear situation - tensions between US and China...
VickerC
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It just doesn't feel right. Worst economic numbers forecast, highest unemployment rate, highest debt ever, defaults are rising very quickly and yet the stock market is unstoppable. The market is already pricing in the cure for the Coronavirus, end of shrinking of the economy, negative interest rates, virtually no unemployment and immediate sales recovery after lockdown end in a matter of weeks. None of that is going to happen in 2020 is it (besides negative rates)? Can it? Or is the market already looking ahead more than a year?
Good news about vaccine --> market rises 3%. Better then expected losses --> stock price rises 5%. Bleak forecast for the coming quarters --> new ATH of many stock. How is this possible? Only one explanation, as long as the FED prints money, NOTHING will stop the rise in the stock market. They have pumped trillions of dollars in the market already, you really believe they are going to stop now? Hyperinflation? They don't care. They even hope for big inflation (+4%) because that makes the debt they need to pay back less (4% of one trillion is a lot of money!).
I have one question for you all: Will this time is different?
ReallyMe
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The index will develop as always, so that in the end, everyone who has taken a position - not earlier nor later - will be fucked
Mekronid
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I mean the U.S. has never been a free market. It's been a mixed market system for centuries. Your analysis is a bit baffling.
sumaia_khan
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Waiting for something good , Bro
mstable
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No need for a market at all. Just get money fro nothing. Great. I'm not going back to work ever, and no point in investing either. Just get the free funny money. I'm fine with that.
Does anyone know where one gives the Fed one's bank account details for my free deposits? I can't find the relevant site online...
From EW, if March meltdown was Wave 1, we are ending Wave 2; and 3 incoming, typically these are 1.272 - 1.618 Fib extensions; first wave was 1200 SPX pips, 3 could go to -1500 > -1900; would end in box between SPX 1050 - 1550 which is astounding but not inconceivable.
We gonna get mortgage crisis on top of the COVID crash when the unemployed can't pay for their homes this Fall.
Deferral programs are not a favor; if I can't pay one month now, HTH am I likely to pay 4 months' lump sum in August?!
Ty for post very thorough covered all salient points IMO! GLTA!