Keep It Simple - Stocks May Heat Up For 2020
Updated
Let's face it, the more people making a certain call in any given market, the less likely it is to occur.
While the world is crying for an eminent recession, a stock market crash, and an explosion in the price precious metals, contrarians are searching for the max pain scenario.
For 2020, I see a sideways movement in dollar strength, a coming increase in treasury yields, pressure on precious metals, and tons of upside for stocks.
Why?
Because the world is expecting the opposite to happen.
For the Dow, I pulled a fractal from the 1929 stock market crash and used Fibonacci retracements to find the upside for the market. And as we know history and patterns repeat themselves. I didn't draw a fancy chart. There are no colored candle sticks, buy zones, sell zones, or anything that would entice your mind to put any emotion into this analysis. Which is exactly why it won't get any attention. But those of you who look at this chart with an unbiased mindset, will see that this situation is much more likely than the 40-60% sell off in stocks that the financial news is calling for.
Yes, I am expecting a sizable crash in stocks, but first I expect the markets to be pushed higher, very quickly, to get the middle class back into stocks and out of generational opportunities like
gold, 
silver, 
Bitcoin, 
Ethereum[/, and cash.
In my very humble opinion, I think any asset that can be used as capital, currency, or medium of exchange, will have an enormous amount of value over the next 10-20 years compared to today. But first, the 'smart' money needs to shake all the 'dumb' money out of these markets. Push their alternative assets down to support, and entice a bid in a hot stock market making ATHs each week.
King Dollar:
In a heavy recession, and potential depression, cash will be the most scarce asset as real estate and stocks are on sale for pennies on the dollar.
The Case for Crypto:
At the very least, cryptos are equal to a fiat monetary system. Meaning they are good enough to exchange from peer to peer (for the proven projects). What gives them upside? The market cap of the crypto market is minute compared to the fiat currency market. Plus, some of these cryptos have a supply cap. There are undeniable economic factors in favor of the crypto market over the fiat market long term. It might not be enough to retire you at 30, but things will balance out.
The Case for Precious Metals:
After this sickening recession, depression, whatever-you-want-to-call-it hits, people will lose trust in public companies, financial advisors, governments, their own country's currency, and any investment that relies on the success of others. The only safe haven left will be precious metals. Governments will be increasing taxation as the economy tanks to continue to fund their out of wack spending habits. Income, capital gains, and property taxes will all increase dramatically. The only real safe haven investment left will be precious metals. They carry no counter-party risk, are virtually un-taxable, and untraceable. The perfect investment in a high turmoil period where you may or may not have to flee the country. Not a pretty scenario, but always good to keep the worst case in mind.
I am not calling for any specific percentage movement in any market. I am merely trying to put a finger on how capital will ebb and flow.
I give my perspective not to be right over others, but to give a fresh look to those who are tired of drinking the 'koolaid.'
Thanks for reading.
While the world is crying for an eminent recession, a stock market crash, and an explosion in the price precious metals, contrarians are searching for the max pain scenario.
For 2020, I see a sideways movement in dollar strength, a coming increase in treasury yields, pressure on precious metals, and tons of upside for stocks.
Why?
Because the world is expecting the opposite to happen.
For the Dow, I pulled a fractal from the 1929 stock market crash and used Fibonacci retracements to find the upside for the market. And as we know history and patterns repeat themselves. I didn't draw a fancy chart. There are no colored candle sticks, buy zones, sell zones, or anything that would entice your mind to put any emotion into this analysis. Which is exactly why it won't get any attention. But those of you who look at this chart with an unbiased mindset, will see that this situation is much more likely than the 40-60% sell off in stocks that the financial news is calling for.
Yes, I am expecting a sizable crash in stocks, but first I expect the markets to be pushed higher, very quickly, to get the middle class back into stocks and out of generational opportunities like
gold, silver, Bitcoin, Ethereum[/, and cash.In my very humble opinion, I think any asset that can be used as capital, currency, or medium of exchange, will have an enormous amount of value over the next 10-20 years compared to today. But first, the 'smart' money needs to shake all the 'dumb' money out of these markets. Push their alternative assets down to support, and entice a bid in a hot stock market making ATHs each week.
King Dollar:
In a heavy recession, and potential depression, cash will be the most scarce asset as real estate and stocks are on sale for pennies on the dollar.
The Case for Crypto:
At the very least, cryptos are equal to a fiat monetary system. Meaning they are good enough to exchange from peer to peer (for the proven projects). What gives them upside? The market cap of the crypto market is minute compared to the fiat currency market. Plus, some of these cryptos have a supply cap. There are undeniable economic factors in favor of the crypto market over the fiat market long term. It might not be enough to retire you at 30, but things will balance out.
The Case for Precious Metals:
After this sickening recession, depression, whatever-you-want-to-call-it hits, people will lose trust in public companies, financial advisors, governments, their own country's currency, and any investment that relies on the success of others. The only safe haven left will be precious metals. Governments will be increasing taxation as the economy tanks to continue to fund their out of wack spending habits. Income, capital gains, and property taxes will all increase dramatically. The only real safe haven investment left will be precious metals. They carry no counter-party risk, are virtually un-taxable, and untraceable. The perfect investment in a high turmoil period where you may or may not have to flee the country. Not a pretty scenario, but always good to keep the worst case in mind.
I am not calling for any specific percentage movement in any market. I am merely trying to put a finger on how capital will ebb and flow.
I give my perspective not to be right over others, but to give a fresh look to those who are tired of drinking the 'koolaid.'
Thanks for reading.
Note
Stocks broke out of this multi-year flag pattern. This is the start to a major extension of this bull market.
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