Shorters Dream - A Projection of 1st Qtr 2001 QQQ
Updated
The price action we've seen since October looks a lot like the tech bubble of Y2K. The combination of mean aversion and valuation levels like this have only occurred two times in the past(1929,2000). Corporate buy backs and excess leverage(everywhere) where also traits of these historical crashes.
Using the first tech bubble as a model, I've projected what might happen. Truly a shorters dream. This applies to both QQQ and SPY as they are rather synced right now and where one goes the other will follow quickly. IF .....it plays out in the same fashion then we will end the downhill run around April 4th or 5th(QQQ) at 117 and around March 25th for SPY at 215. Both, will ready for another furious bear rally at those points in time.
Sort of scary...
Hey, its an idea. We'll see.
Using the first tech bubble as a model, I've projected what might happen. Truly a shorters dream. This applies to both QQQ and SPY as they are rather synced right now and where one goes the other will follow quickly. IF .....it plays out in the same fashion then we will end the downhill run around April 4th or 5th(QQQ) at 117 and around March 25th for SPY at 215. Both, will ready for another furious bear rally at those points in time.
Sort of scary...
Hey, its an idea. We'll see.
Note
Italy is now officially in recession. Germany is soon to be in recession.Note
Check out the nasdaq sentiment meter. It's coming off an all time high. Judging by the previous peaks its going to come down fast. market-harmonics.com/free-charts/sentiment/nasdaq_sentiment.htm
Note
The TRIN chart is looking grim. Note the graph is inverted so positive is down. On Short Term chart, March of 2019 looks like November'18(with possible Dec. bounce before the plunge). Looking at the intermediate, the last 4 times its been at this magnitude (1.25) and direction(headed down on graph) was in mid-December, mid-November(dead cat bounce),mid-October, March into April, and February of last year. Being that all these were down months does not bode well for the month of March 2019. I'm convinced that stock buy backs and portfolio alignment played a MAJOR role in propping up February to keep this bear rally alive.market-harmonics.com/free-cha...
Now come the downgrades in YoY earnings for 1st quarter 2019 earnings. The "trade agreement rallies" will end as you cannot ignore immediate earnings degradation and outlook. The blinders will come off. The market will drop.
All that being said, we'll see a BTD Monday, possibly into Wednesday before the reality kicks in. Thursday-Friday will see the drop.
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