Bubble
CSCO Log Chart AnalysisGood reclaim of important monthly level, I'd prefer to see a nice retrace back to 57s but the opportunity cost may outweigh the better entry. We're entering peak euphoria ranges from the internet bubble... if we escape this range, north of $82 the fun really starts. All time highs are a mere 40% away, with 50%+ upside from there.
Take profit levels marked using fib retracement of the internet bubble top and bottom. I expect this to run from this spot, good R:R with scaled stops under the monthly level.
Considering this analysis was done at high time frame, it may take a while to play out. Below 53.41, I think this trade is invalidated.
NDX (Nasdaq) one of the possible moves. Possibility of dotcom2.0Hey, this is one of the possible moves in of $NDX, the index is overbought and it needs to cool off, maybe we see a market crash (or just a big correction) in February 2022.
Not financial advice. Do your own research.
P.S I will be glad if this is not gonna happen. If this happens many people will lose their savings.
P.P.S If we see market crash it will not be as 'light' as 2008 but more like as it was in 2000 (dot com crash) or even as hard as the Great Crash (1929 aka the Great Depression).
Prediction from time traveler from 2049 FINAL WARNINGA Human being iluminaise in the dark forest, come to me to make a sacrafice.
Stay at present times to give us final warning about War and global warming.
Nowadays a beginning of new bubble taking place...
NFT of course I tell. To our planet Earth not going well.
In Cincinnati after secet meeting of iluminatii. They decide to not warn us of NFT ravages colide.
Because in late 2048 they have to merge with AI ... Make new Human race to expand in cosmic grace.
In 2031 brutal conflict going place ... 2037 Robots doing well it's hard to Spell In 2049 Skynet arrives and human history ends...
QFIHR-3990-IX the Human Hybrid Robot from the future.
Non- Farm Payroll Front RunAAII Bullish sentiment Indicator @ All Time Highs.
ROC irrational optimism abounds - while sentiment remains
extremely negative @ 38%.
Housing Prices remain in an extraordinary Bubble with the 10yr
approaching 1% from YCC.
The ES SPY SPX Trend SLOPE is increasing.
USDX appears to be supportive ~ 92. A weak US DX will shove
assets higher within the Negative DX Trend.
A clear structure of the resumption of Down Trend as the Long
DX Trade which Specs chased is failing.
FX Pairs have clear bias to Higher DX, outsized, but not extreme.
Technical Structures across FX remain DX Bearish.
Yields are telling us Equities would move higher and yet the expectations
for the move higher was not met.
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*** Divergences continue to expand to Negative Extremes.
NFP will be front run, Claims have been declining.
August 6th may provide the Catalyst for Bulls, then again Delta is
beginning to show large gains in New Cases among the Vaccinated.
The Market remains extreme, Caution warranted.
We remain Neutral into NFP.
Mother of Market Crash is NearHere I will share my opinion about the mother of market crash, this is all about the global economy, I want to explain a little what is meant by michael burry, this has to do with elon musk and bitcoin.
Michael Burry once said: we will witness the mother of all accidents, in the midst of the greatest speculative bubble of all time. Then what does this mean? everyone is still wondering about this.
Everyone must have known that the bitcoin season will continue until the end of the year, this is called a speculative bubble if the bull is left until the end of the year, it is like a small fish eating a whale and this will probably never happen. the minor players are bound to leave before the end of the year, and this is what the big players don't want.
Michael Burry may be right again, this could be due to several factors
- United States inflation rate out of control
- Federal Reserve will raise key interest rates sooner than expected
- high unemployment rate
- Covid19
- Bank collapse
Let's try to see the chart pattern I made about bubbles
bitcoin is dancing on the edge of a knife, here I am a little doubtful about the accumulation of wyckoff and the movement is a little suspicious.
I feel like Elon Musk was hiding something during the last discussion with Jack Dorsey and Cathie Wood on the Bword show.
NETFLIX: The End Of The GROWTH Story?
While many of you might be surprised to see anyone being bearish biased on NETFLIX of all things, I say that my bias has some solid basis underneath it
Firstly, let's deal with the elephant in the room: the whole market is a massive bubble with SPY gaining more than 100% from the Lows of the COVID crash, and NETFLIX gained 104%
One might say that gaining 104% in less than a year is a spectacular achievement, however, considering the fact that the company grew its business massively since the beginning of the lockdowns, outperforming the market by a mere 4% is a sign that the investors are beginning to get skeptical about the future growth, and that is the KEY
You see, all the tech stocks are a growth story, not the value story, and by the virtue of being a growth stock NTFLX is wildly overpriced with the P/E standing at 64, while the SPY benchmark P/E stands at 34 which means that NETFLIX is trading at a 100% premium to the market and that given that SPY is now full of tech growth stocks itself which skews the P/E to the upside, while also benefiting from the passive ETF flows which have determined the rapid market growth after 2008 that outpaced the GDP growth by a factor of 5
All of the above means that the moment Netflix stops being considered a growth story it will start falling to at least cover the gap with the SPY P/E and if it gets kicked out of the index it will lose all the passive inflows and the price will halve again.
So am I convinced that the Netflix growth is over? Let's take a look at the data:
Here is an extract from the LA Times article on the company:
«The streaming giant added a mere 1.5 million paying members globally in the second quarter, which is down 85% from the same period last year when it reported 10.1 million subscriber additions. The company also added 61% fewer subscribers than it did in the first quarter when it missed projections with 3.98 million new accounts. In the U.S. and Canada, Netflix lost about 430,000 paid memberships in the second quarter»
It means that the company gained almost all of the potential subscribers during the lockdowns, that it would have been gaining for years otherwise, as those who could/wanted to subscribe did so, and the pool of those that haven’t yet is relatively small.
Also, NETFLIX is finally losing its monopoly, which once brought fat margins, as the Disney+, HBO Max, and other players are gaining market share breathing down the company’s neck, which not only adds downward pressure to the subscription price but also increases the cost of the content, as the competition for quality scripts and actors drives the prices higher
That puts Netflix- once a king reigning supreme between the rock and the hard place, fighting for the market that is not growing as fast anymore while having to Lower the subscription prices and paying more for the content simultaneously.
And Unlike Google, Amazon, or Apple that have secured near-monopoly positions, tying their customers to the ecosystems and capitalizing on the Network effect, while having aces up their sleeves like championing General purpose AI or being on the cutting edge of quantum computing, Netflix has nothing to offer outside of their small niche and what is more important, the company’s product is easily replaceable and is not essential or even unique anymore.
Summing up, while I am not saying that the stock will collapse tomorrow when the crash comes, all everything falls, NETFLIX might be the one that never recovers.
SHORT TRADE SUGGESTION: buy PUT options that are 6 months and 1 year from now at the strikes that are at -50% of the current price and keep rolling the position with time.
You might get 20:1 or even 50:1 returns if you catch the crash!
Please, support my drawings with BIG LIKE
Is LABD looking to break out of this ascending triangle?As far as popular reversal patterns go, ascending triangles are no bottom of the barrel. Although I still am a new trader, I have been committed to the market for just over 1 year. With that said I have been watching LABD/LABU in proximity of market trends. When the overall market is bullish I trade LABU with success. When Market is bearish I trade LABD with success. My number #1 rule is follow the trend. That is why I am bullish on LABD. With the market making irrational highs despite COVID fears of a new variant, I have noted that LABD make this ascending triangle formation. So far it has held true. This could just be paranoid shizophrenia (I have an MD by the way), but my inner voice has been telling me to watch biotech for the market fall. My theory is that if and when the market falls LABD is going to get pumped like there is no tomorrow, similar to the VIX. But the good part is it is not as volatile as fear is. I can trade its inverse and watch the volume in both directions. So far it seems even, so i don't think any one knows what is coming next, except for maybe the FED. Unless LABU turns around I think LABD can go up to 40, if in fact there is a bubble burst on the horizon.
Lumber bubble pops - what does it mean?Some may not be aware of the importance of lumber price movements.
Basically lumber rocketed like nobody's business, then crashed (>50% correction) pretty quickly. This post is not an analysis of why lumber prices rose so crazily. Viewers will need to do some background reading.
The collapse was the worst seen since 1978 . That's something to chew on. In essence it was a bubble that popped. It was about demand going wild for all sorts of reasons, with no true underlying 'value'. That phenomenon has been seen repeatedly across all asset classes. It happens when something is fundamentally wrong with market booms.
Those who would purchase lumber wised up; the market became saturated in extreme overbought territory, and those who would have been using lumber (for house-building etc) basically switched from 'commodity' purchases to 'services'. That's the broad brush and I can't give chapter and verse here. People went on holidays! I didn't say 'everybody'. Yes - read about it. They decided, ' Now is not a good time - I'll do some travelling and living instead '. Funny but true.
But what's underlying the lumber bubble pop, is that the Housing market has suffered a similar pop. Ahhhh.. some will disagree with me because they're not seeing much about that in the news. Well BigMedia news is usually 3 to 6 months late! And of course, people believe more than 50% of what they read in the #LameStreamMedia news - but will never admit that.
I'm not about to deviate onto the metrics for the Housing Bubble pop here. Serious traders and investors can find that on the net from reputable channels on popular non-conventional streaming channels. But don't expect the whole picture to be found in one place.
The lumber pop, in conjunction with the housing pop - is basically bad news for loads of commodity sectors. If you don't believe me go back to 2007-2009. This is literally where the 'house of cards' (pun intended) collapsed. History repeats itself because human nature doesn't change much.
Disclaimers : This is not advice or encouragement to trade securities on live accounts. Chart positions shown are not suggestions intended to assure you of an advantage. No predictions and no guarantees are supplied or implied. The author trades mostly trend following set ups which have a low win rate of approximately 40%. Heavy losses can be expected if trading live accounts. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on opinion expressed here or on my profile and you lose your money, kindly sue yourself.
Fed interest rate predicts bearish marketsSo as we all know, we're in a bubble right now. Now we know that, what would be the best thing to do? What if you're on a dollar cost averaging strategy and you know we're in a bubble?
First of all, you can ride it out. This is the default strategy and there's not much wrong with that.
Secondly, if you're semi actively watching the market, you can try to anticipate on the bubble collapse which is inevitably coming by stopping your long trades. When do you know it's time to stop your long trades, since you have to know when the collapse actually starts?
I think the answer is in the fed interest rate. Each time just before the bubble collapsed, the fed interest either went up or it plateau'd on a high level. Since the fed interest rate is today still at a very low level, I think it's not yet time to stop your long trades.
Bitcoin Summer Forecast 2021Summer is hot, And the bubble just popped!
Sit back and enjoy the ride!
Great things come to those who wait!
After breaking the symmetrical contracting triangle
It's certainly text book
To retrace to the lower quadrant of that triangle before next run
Minimum retrace acceptable for me is 9.5k around the 0.382
Maximum retrace speculated to be around 7k at the 0.236
CRASH on the S&P500 and the economy / PART 2 ( Update )----------------------------------------------
REMINDER
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We did a few months ago an analysis on the S&P500 chart based on some behavior patterns, which would trigger some results, we marked some crash zones, but the fundamentals have changed this past scenario.
What is the reason for this change? The big dollar printing by the Federal Reserve and the unwary investors who have been lured by these big gains. This generated a short squeeze that has continued to drive the price higher.
The chart has changed, but what has not changed is the price projection. We are still in the Crash Danger Zone, this zone will never disappear until the market has made a deeper correction.
Pay attention, because we are facing a complex situation, and here a good management is the only thing that will help us.
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ANALYSIS
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On the one hand, we still have a prolonged Divergence, which ALWAYS triggers an extremely strong correction. On the other hand, the fibonacci calculations have been rendered obsolete by the short squeeze generated, but this has triggered a Bubble pattern. The curved red line is the guide to the pattern we are talking about.
Normally bubble patterns, when they break the curve strongly and consistently, usually lose 60% of the value of the asset, then a strong rebound to 61% Fibo, and end with a total fall of 70% 80% or 90% of the value.
After this... the market is as if it were dead. If the asset has a real and natural value... This zone becomes an accumulation zone. ( Buy )
All this mentioned is the normal behavior of this type of patterns. But as we are talking about a very important and controlled market .... We must watch all the support zones marked on the chart.
In normal circumstances or less important graphs... It should penetrate all the support zones no matter what the zones are. But in this market we must be pending in each support zone and go managing our stop loss with caution and without greed. I do not recommend looking at earnings, simply be guided by the drawing and manage well the Traling Stop.
I would like to remind anyone who has forgotten... that before a sharp fall in the market... We are warned with viruses, from 2 to 3 viruses, and then always comes the crash. I did not invent this, it is written in the chart.
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HOW DO WE MANAGE IT?
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For all this, I recommend caution.
- If you are in a trade or you are in the market, the most advisable is to have a traling stop below the bubble curve.
- For the more risky, we can prepare our progressive shorts as the price continues to rise.
- For the more conservative, you can wait for the bubble to burst and on the bounce towards the 61% fibo area, open a bearish trade.
Best of luck to all.
Stock Market Crash starting 2021? New Era Dot Com Bubble?Dot Com ver2? 1929? Great Depression?
The NASDAQ has risen significantly this year however it is quite possible and potentially likely we are near a top of the market.
The Dow Jones (US30, DJI) has dropped significantly over the last few days where its ATH was 35042 dropping to 33400
The Dow made a lower high at 34835 and is heading towards the 33400 zone.
Dow theory suggests a market top usually occurs when a market Drops greater than 3% rises 3% and drops below the first low making a lower low.
We have to remember that the DOW JONES consists of Americas largest companies which make up a significant market share across all sectors which also may suggest Wall Street/Hedge funds opinion of the broader economy.
Could possibly be a rotation? Possibly yes however we are highly likely to correct.
The Daily time frame shows that there can be a significant correction in the near future.
Technical
Daily All Time High
Bearish Divergence on larger time frames
Decrease in Daily Volume
RSI MACD Money Flow indicating potential reversal
Fundamentals
A significant portion of CEO's, Insiders, Directors of the fortune 500 have been selling a significant amount of stock over the past few weeks.
Jeff Bezos has sold over 1B in Amazon shares
Mark Zuckerberg has sold over 1B in Facebook shares.
Directors from Google and Microsoft have also sold a significant portion of their shares.
We must also understand that near the top of the market the laggards/majority will end up "holding the bag". The top of the market throughout history featured low interest rates, high speculation, overleveraging.
In the current market we have seen interest rates being low, IPO's , SPACs, high speculative trading, cryptocurrency, NFTs, trading cards shoot up in price where they may not inherently provide people with genuine value.
Interest rates are also significantly relative to this decade. If interest rates are high will people be able to invest as the cost of living/goods & services will rise?
If the Equities markets crash, it will most likely initially bring down the Cryptocurrency Market
There are various factors which can signify a major market correction is coming to play, so stay safe. Invest in your family, health and happiness as "money" doesn't really exist but it's the debt that motivates us.
Money is also just a social construct .
Stay safe everyone :)