Short

SP500 - The Crash - Part 10

Updated

: STRONG SELL

AMEX:SPY : Strong Sell

Initiated: Nov. 2019

Immediate Target: $2,090.00

Facing the Financial and Economic Blow-Out

The financial systems have become based on the financialization and securitization of consumer spending and consumer debt.

If you stay at a hotel, your room payment goes through a whole series of companies or financial vehicles you’ve never heard of, some of which exist entirely to take a cut of that payment.

The same is true when you buy food, pay your utility bills, or buy a car. Your rent or mortgage payments, your car loan payments, are securitized and split up among scores of financial operations. Fifty years ago, financial speculation began to be far more profitable than investing in capital goods to produce anything, especially to produce it here in America. And your nation has become dependent on cheaper global value-added chains for the produced devices and goods it once produced.

Now what happens if we have to impose major quarantine in one economy after another—to save lives, which will most probably have to be done. Some of these so-called global supply chains will quickly become empty; it will be temporary, but it will disrupt every globalized national economy. As in China, production can come back. But consumption will be massively lost—demand will be quarantined—and will come back much more slowly.

Mass quarantine has now come to Italy, one of the G7 leading industrial economies. In the hope of containing an outbreak of Covid-19 in Lombardy, the region around Milan, and Veneto, around Venice, over 55,000 in the so-called Red Zone have been told not to leave the area for at least two weeks.

As this reality breaks through the illusions fed by central bank money-printing, the stock markets have fallen from record highs, taking massive plunges more rapidly than at any other time except the summer of 1929. Leading the collapse are consumer goods stocks, auto stocks, stocks of banks, and stocks of insurance companies. The plunge in bank and insurance company stocks points to the fact that U.S. Treasury interest rates are falling so fast that the immense mass of $600-700 trillion in derivatives contracts—which are overwhelmingly bets on interest rates—could blow big holes in these banks and their counterparties, the insurance companies.

Even bankers’ economic think-tanks and finance officials in Europe are suddenly talking about a Lehman Brothers moment in front of us. With a $30 trillion worldwide corporate debt bubble, not simply a historic high but an all-time high relative to GDP, there will be masses of corporate bankruptcies and a financial and economic breakdown—unless we act, and get the appropriate action from world leaders to create a new world credit system.

The Hedge: Cryptocurrency

High Wave Count: Primary Wave 5

Wave Count:

Will update.

FMW

Find More Analysis: FibMarketWatch.com

Note

Above: Weekly

Note

Hourly Chart

Note

15 Minute Chart:

Note

Minute Wave Retrace:

Note

Minute Wave 3 should begin today...

Note

Need to watch Oil and the Dollar...

Note

Oil is going to Zero...

Note

Oil collapsing has created unprecedented demand for the Dollar...

Note

When Oil does go to zero there will be massive liquidity problems in all countries...

Reminder:
The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement.

Note

WTI/World Currency Unit (Above)

Note

Good time to add shorts and sell any winners...

Note

DXY -Dollar Chart - 1 Minute (Above)

Note

Recovery not expected until January 2021...

Note

This is now the best case scenario...

Note

Daily Chart Update:

Note

Weekly:

Note

33 EMA crossed 50 EMA

Note

Fib Time Marker is about to be hit...

Note

Next 36 Hours should be interesting...

Note

I believe we have reached the point where every new dollar has less and less efficiency in supporting markets...

We have spent roughly 10 Trillion dollars in supporting markets...

6 Hour Chart:

Note

Hourly Chart:

Note

This could be a High Wave 3 beginning...

Caution is warranted!

Note

If it is a High Wave 3..

Look for Volume to significantly pick-up with a very sharp move lower...

Note

Big Week.

Note

1 Hour Chart:

Note

Here is a real eye opener...

Note

Hourly Wave Count:

Note

Trillions of dollars to support companies that would already go bankrupt...

Madness...

The trillions pumped into the market only delays a true financial reset and recovery...

Guess they truly have to burn this monetary system to the ground...

Note

This is now a High Wave 1 and 2 according to Wave Theory...

High Wave 3 is next.

Wave 3s are quick to reach their targets...

Note

Wave 3s are the most likely to extend...

Note

This is a totally unprecedented market...

No time in history has there been such a wide disparity between the stock market and fundamental economics of the United States...

Note

The Private Fed is throwing cash on a fire...

No amount of paper can stimulate demand when the global population is instilled with fear which will no subside until a percentage of the population resumes their normalcy. Fib Time would suggest this won't occur until 2021.

Note

Companies completely pulling guidance and raising cash for SURVIVAL...

Yet the Stock Market rallies...

Enter the Twilight Zone.

Note

What triggers the fall?

China?
Covid?
Blackswan?
Interest Rates Negative?

Note

Oil?

Note

WASHINGTON/LONDON/DUBAI (Reuters) - As the United States pressed Saudi Arabia to end its oil price war with Russia, President Donald Trump gave Saudi leaders an ultimatum.

In an April 2 phone call, Trump told Saudi Crown Prince Mohammed bin Salman that unless the Organization of the Petroleum Exporting Countries (OPEC) started cutting oil production, he would be powerless to stop lawmakers from passing legislation to withdraw U.S. troops from the kingdom, four sources familiar with the matter told Reuters.

The threat to upend a 75-year strategic alliance, which has not been previously reported, was central to the U.S. pressure campaign that led to a landmark global deal to slash oil supply as demand collapsed in the coronavirus pandemic - scoring a diplomatic victory for the White House.

Trump delivered the message to the crown prince 10 days before the announcement of production cuts. The kingdom's de facto leader was so taken aback by the threat that he ordered his aides out of the room so he could continue the discussion in private, according to a U.S. source who was briefed on the discussion by senior administration officials.

The effort illustrated Trump's strong desire to protect the U.S. oil industry from a historic price meltdown as governments shut down economies worldwide to fight the virus. It also reflected a telling reversal of Trump's longstanding criticism of the oil cartel, which he has blasted for raising energy costs for Americans with supply cuts that usually lead to higher gasoline prices. Now, Trump was asking OPEC to slash output.

Note

businessinsider.com/trump-saudi-arabia-ultimatum-cut-oil-supply-lose-military-support-2020-4

Note

All of my work will be tested here.

Note

The Question: Can Fibonacci Technical Analysis predict price-action?

Note

Here we go..

Note

The last 'Pump'...

Note

It's basic economics...

This was going to happen if we had COVID or not...

Before Covid: Repo Operations - Funding Markets were freezing

After Covid: Demand Shock

Note

Now: Magicians Act

The System is fundamentally broken.

FibMarketWatch

Also on:

Disclaimer

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.