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Anatomy of the Great Depression 2020COVID19:CONFIRMED Dear friends, More and more people are starting to speak of a real economic crisis, but it’s not what we should be frightened of. What we should really fear is an economic depression. Economic cycles Every economist knows about the theory of economic cycles. I’ve tried to represent these cycles in a schematic way in the chart above. We see 4 main stages there: Growth, yellow stage Peak, green stage Crisis, red stage Depression, black stage This cyclic recurrence is a natural economic process, which can’t be avoided because of both regular economic processes and exterior factors. There can be many reasons for these cycles’ formation, starting with bursting debt bubbles and finishing with wars, revolutions and epidemics. The main thing common to all these reasons is a demand shock, i.e. the moment when the number of buyers falls sharply. As a result, goods production is no longer demanded, producers make less profits and can’t pay wages, people have less money for buying goods. This is a vicious circle. This picture is very simplified, of course, but it shows the main mechanism of crisis development and the measures that developed countries take in order to avoid severe consequences. I described the measures taken by the US government to combat the economic crisis in my privet analytical article. Now you understand why those $2 trillion were directly or indirectly aimed at supporting consumers. Because consumers are the engine of market economy. Let’s get back to the cycles. We’re currently at the beginning of the crisis stage triggered by COVID-19. A demand shock is now present all across the globe as people have to isolate themselves or they are under quarantine. The depth of the crisis depends on the duration of the quarantine. The longer people stay jobless, the more the load on households and simple consumers will be, the more savings will be spent on food. The more time the consumer doesn’t buy goods, the higher the debt load on businesses is. The higher the debt load on businesses, the more bankruptcies and credit arrears. The more credit arrears, the more load on banks and the higher likelihood of their bankruptcy. This is a vicious circle! Bank failures mean that investors lose their deposits. Lost deposits result in a demand cut. Demand cuts lead to businesses going bankrupt. Finally, we have a huge number of the unemployed, of bankrupt businesses and banks. In essence, this process is the active crisis stage. The state that follows this shock is called “a depression”, when people can’t find a new job and earn their living for a long time. The good news is that after all these terrible times, people are retrained, find a job, set new businesses or reorganize previous ones. In other words, the economy starts reviving and developing. The cycle gets into the growth stage and then reaches a new historical peak. Development cycles of COVID19 and economic crisis scenario The chart above shows the number of coronavirus cases and a future development forecast. As of March 31, the number of cases reached 800,000 worldwide. According to various experts, the peak is expected in May, with a total of 2-3 million cases (bold dotted line). Then the dynamics will slow down through global quarantine measures and the population’s natural immunization. Once the percentage of cases decreases, many countries will eagerly lift lockdowns and restrictions on movement. As a consequence, another wave of coronavirus may take place and last till September. This is the time by which clinical trials of a COVID-19 vaccine are expected to have been completed and then the vaccine will be launched into a series production. Thus, the active crisis stage may last till the end of September, based on this scenario. Obviously, not only businesses, but also many governments don’t have enough safety margin to endure such a long crisis. Considering a high level of globalization and interdependency of consumer-producer chains worldwide, even one country’s default may start a chain reaction. Just remember the Greek economic crisis of 2015 which caused fever in whole Europe. It’s after that case Great Britain got in turmoil, which led to the Brexit referendum in 2016. Evidently, the seats of economic crisis will mainly be commodity-dependent countries, because besides the demand shock related to the pandemic, they will suffer budget deficits caused by a sharp slump of commodity prices, oil prices above all (check this article for my long-term oil forecast). I estimate that low oil prices are a global trend. It’s very likely that commodity prices won’t be growing until the end of 2020, based on the scenarios of pandemic development and its economic consequences. If the worst scenario is realized (red wavy arrow), the Brent price may fall to 9-10 USD a barrel (the support level of 1998). The victims of this double strike will apparently be Gulf countries (Saudi Arabia, UAE, Oman, Kuwait, Qatar), CIS countries (Russia, Kazakhstan, Azerbaijan, Turkmenistan) and South America (Bolivia, Columbia). Without even mentioning Venezuela with its long-lasting economic crisis. Start of the Great Depression 2020 The scenario looks quite disturbing. To forecast the length and the depth of the economic crisis, let’s get back to history. A similar economic crash was in 1930, in the times of the Great Depression. The reasons of that crisis were the First World War and the Spanish flu pandemic. The consequences were the US agricultural crisis and the crash of the whole banking system, because the main borrowers were bankrupt farmers. The chart above shows the 12-month time frame for Dow Jones where 1 candlestick equals 1 year. According to the theory of economic cycles, we see: Short-term cycles (2-3 years) - pink arrows Medium-term cycles (7-10 years) - violet arrows Long-term cycles (70-100 years) - red arrows. Surprisingly, the stages of the three cycles coincided in 2020. The last recession year was 2014 when many countries were going through economic stagnation and some countries (Greece with its debt crisis and Russia with its currency crisis) were on the edge of a large-scale crash. That period refers to short-term cycles. Six years have passed since then and a new recession within a new short-term cycle seems natural. The well-known mortgage crisis of 2008 that affected the whole world refers to medium-term cycles. Twelve years have passed since then and again, a new slump looks regular. Ninety years have passed since the beginning of the Great Depression, which perfectly fits into long-term economic cycles. So, we may expect the beginning of the Great Depression no. 2. Conclusion The unfavorable development scenario is confirmed by the theory of economic cycles, so we all should get prepared for the worst. The global crisis, which may result from the Great Depression 2020, may last for up to 4 years and reformat our lifestyles the next 5 years. I’d like to hope this scenario won’t be realized, but obviously, this pandemic is an epoch-making event which affects the whole world and will leave its trace for sure. Anyway, time will tell whether this scenario is true, but I’d like to remind you about a famous Chinese proverb: When the winds of change blow, some people build walls and others build windmills. So, let’s cheer up and think about how to benefit from the situation. Take care of yourself and your money! Subscribe and keep in touch! Best regards, Michael @Hypov
CShort
by Hypov
3
BTC/USD Analysis by EduardCAHello Dear Friends! BTC has a bearish bias towards the next support at $6,000. It is a strong support level. If the price moves below $6000, BTC/USD may easily hit to $5,550 (SMA200 weekly). While the long-term bias remains bullish, the expectations on a weekly and monthly basis stayed mostly neutral. Like many other instruments, Bitcoin has a high volatility now, which means high risks. Put only 2% of your capital under the risk on one trade. Good luck!
COINBASE:BTCUSDShort
by EduardCA
1
$TDOC can rise in the next daysContextual immersion trading strategy idea. Teladoc Health has a strong upward trend. The company is providing virtual healthcare services. Due to the spread of the COVID-19, the demand for the company's services rose. This and other conditions can cause a rise in the share price in the next days. I saw it again and opened a long position from $165,81; Information about stop-loss and take-profits will be later. Do not view this idea as a recommendation for trading or investing. It is published only to introduce my own vision. Always do your own analysis before making deals. When you use any materials, do not rely on blind trust. You should remember that isolated deals do not give systematic profit, so trade/invest using a developed strategy. If you like my content, you can subscribe to the news and receive my fresh ideas. Thanks for being with me!
NYSE:TDOCLong
by KozakHlib
$AYTU can rise in the next daysContextual immersion trading strategy idea. Aytu BioScience has a strong upward trend. The company develops and commercializes novel products in the field of hypogonadism (low testosterone), cough and upper respiratory symptoms, insomnia, and male infertility. Due to the spread of the COVID-19, the demand for the company's services rose. Today Aytu BioScience received confirmation from the FDA that it may begin distribution of its COVID-19 IgG/IgM Rapid Test throughout the U.S. — finance.yahoo.com This and other conditions can cause a rise in the share price in the next days. So I opened a long position from $1,85; stop-loss — $1,65. Information about take-profits will be later. Do not view this idea as a recommendation for trading or investing. It is published only to introduce my own vision. Always do your own analysis before making deals. When you use any materials, do not rely on blind trust. You should remember that isolated deals do not give systematic profit, so trade/invest using a developed strategy. If you like my content, you can subscribe to the news and receive my fresh ideas. Thanks for being with me!
NASDAQ:AYTULong
by KozakHlib
2
$PAYX can fall todayContextual immersion trading strategy idea. Paychex has a strong downside trend. The company provides integrated human capital management solutions. Due to the spread of the COVID-19, the demand for the company's services has fallen. This and other conditions can cause a fall in the share price today. So I opened a short position from $55,53; stop-loss — $58,43 — over today's high. Information about take-profits will be later. Do not view this idea as a recommendation for trading or investing. It is published only to introduce my own vision. Always do your own analysis before making deals. When you use any materials, do not rely on blind trust. You should remember that isolated deals do not give systematic profit, so trade/invest using a developed strategy. If you like my content, you can subscribe to the news and receive my fresh ideas. Thanks for being with me!
NASDAQ:PAYXShort
by KozakHlib
#bitcoin - Comfort Zone (Weekly)Good morning everyone and I hope you are all safe and sound in these turbulent times! Let´s get back to some facts today to see what happened and what might happen. What we can see on a first glimps it becomes clear, that Bitcoin overall has bounces back into his comfort zone just above $6k and at the moment ranging here. There are several things no that might play a role for the further development such as: - Coronavirus - Bitcoin Halving - The MA200 on Weekly - Potential bearish retest of the former lead-line Well, honestly I am very skeptic if Bitcoin will manage short-term to "pump" and surprise everyone, depending on today´s close, this current weekly candle is marking a "draw" between bulls & bears. But what I can tell you is the following: I am not being bullish before the Yearly Pivot & the MA200 are accepted as Support again, anything else is just not enough at the current stage of the economic development to convince me of the opposite. It can go lower and a potential recovery will likely not happen over night. How low? Next support is waiting around $4.1k. We are all sort of tapping in the dark on so many occasions. Stay safe everyone, stay home, wash hands, protect your loved ones. Neru
BITSTAMP:BTCUSD
by Gl4diator
6
SILVER - XAGUSD - Oh no, don't do that!Silver looking bearish. Escaped out of a either descending triangle or a symmetrical triangle, both are legit. I feel pretty confident to say that silver is heading towards 8.87$. Bitcoin is not a safe haven, Gold is not a safe haven and silver is not a safe haven. EUR with their problems a safe haven? USD printing trillions a safe haven? CHF running into debth with COVID-19 a safe haven? Stocks? There is no safe haven... Happy trading and stay healthy!
OANDA:XAGUSDShort
by Thierry88
4
$GILD can rise in the next daysContextual immersion trading strategy idea. Gilead Sciences has a strong upward trend. The company is developing a treatment for COVID-19 now. Due to the spread of the virus, this company looks very attractive and has a potential for success. This and other conditions can cause a rise in the share price in the next days. So I opened a long position from $80,74; Information about stop-loss and take-profits will be later. Do not view this idea as a recommendation for trading or investing. It is published only to introduce my own vision. Always do your own analysis before making deals. When you use any materials, do not rely on blind trust. You should remember that isolated deals do not give systematic profit, so trade/invest using a developed strategy. If you like my content, you can subscribe to the news and receive my fresh ideas. Thanks for being with me!
NASDAQ:GILDLong
by KozakHlib
BTC Bottom, Banks in the riskzone of Corona like old people. The world economy is in an extreme situation. Factories all around the world are on survival mode or completely shut down. Central banks are printing money in a brutal level then ever before. They are actually saying that "this unique situation with Virus is not our fault" Well.. thats something you can tell to the average guy that dosen't now shit. As you make your bed, so you must lie. These are the consequences of using minus interest and QE, not the Virus. Bitcoin is facing a big survival fight. Both Miners and Investors are in a situation where they need to really have faith in Bitcoin. Let's say this is a war between old monetary system and a new decentralized system. Gold is physical and cant be vanished. BTC is depended on internet and electricity. Thats risk to have in mind. But still, we are moving towards new era of technology and Bitcoin will survive this, question is where the new bottom will be found. If we look in two Fibonacci and take away the extremes (highs and lows) we can see bottom at level 0.786 Now we have a situation where Coronavirus is shutting down the world. So if world economy take big hits, it is the new generation that will choose what to keep alive. Trendline from 2013 is indicating a new low at 2k but Fib 0.786 is at 2.4k. Either way, we have new lows to see in this uniqe situation.
BITSTAMP:BTCUSDShort
by Cryptovicci
$MAN can fall in the next daysContextual immersion trading strategy idea. ManpowerGroup has a strong downside trend. The company offers recruitment services and other workforce solutions and services in the Americas, Southern Europe, Northern Europe, and the Asia Pacific Middle East region. Due to the spread of the COVID-19, the demand for workforce solutions fell. This and other conditions can cause a fall in the share price in the next days. So I opened a short position from $61,46; Information about stop-loss and take-profits will be later. Do not view this idea as a recommendation for trading or investing. It is published only to introduce my own vision. Always do your own analysis before making deals. When you use any materials, do not rely on blind trust. You should remember that isolated deals do not give systematic profit, so trade/invest using a developed strategy. If you like my content, you can subscribe to the news and receive my fresh ideas. Thanks for being with me!
NYSE:MANShort
by KozakHlib
$TDOC can rise in the next daysContextual immersion trading strategy idea. Teladoc Health has a strong upward trend. The company is providing virtual healthcare services. Due to the spread of the COVID-19, the demand for the company's services rose. This and other conditions can cause a rise in the share price in the next days. So I opened a long position from $139,49; Information about stop-loss and take-profits will be later. Do not view this idea as a recommendation for trading or investing. It is published only to introduce my own vision. Always do your own analysis before making deals. When you use any materials, do not rely on blind trust. You should remember that isolated deals do not give systematic profit, so trade/invest using a developed strategy. If you like my content, you can subscribe to the news and receive my fresh ideas. Thanks for being with me!
NYSE:TDOCLong
by KozakHlib
7
$BYD can fall in the next daysContextual immersion trading strategy idea. Boyd Gaming Corporation has a strong downside trend. Due to the downside market trend and spread of the COVID-19, the demand for casino services fell. This and other conditions can cause a fall in the share price in the next days. So I opened a short position from $8,79; stop-loss — $9,71. Information about take-profits will be later. Do not view this idea as a recommendation for trading or investing. It is published only to introduce my own vision. Always do your own analysis before making deals. When you use any materials, do not rely on blind trust. You should remember that isolated deals do not give systematic profit, so trade/invest using a developed strategy. If you like my content, you can subscribe to the news and receive my fresh ideas. Thanks for being with me!
NYSE:BYDShort
by KozakHlib
3
Yellow Metal Losing the Shine?It was fishy already the moment when I realized how people being greedy over equities TVC:SPX | TVC:DJI . Knowing much of major steps already taken in action from global governments and central banks all those honchos working together to save their own country equally from this pandemic created financial crisis let me think at least once that something is coming better for the future even if it's not soon but later for sure! I have already realized some good changes around which I don't like to mention here but take it optimistic for now and know that the shine of this yellow metal may no longer be brighter then past if the whole world are about to contain this virus inside a box!
FOREXCOM:XAUUSDShort
by Anatta0
5
GBPUSD MONTHLY OVERVIEW "LOOK LEFT STRUCTURE LEAVES CLUE" PRICE FORMED A 3 DRIVES PATTERN IN BETWEEN 1998 AND 2007 WITH TARGETS PROGECTIONS…; @1.70470 @1.36830 @1.16617 @0.90590 BETWEEN 2010 AND 2018 PRICE HAS FORMED A 5-0 WE EXTEND A FIBONACCI EXTENSION FROM JUL 14 TO OCT 16 TO APR 18 AND WE HAVE THE 100% RIGHT @0.90590 FOR THE 4TH 3 DRIVE TARGET PRICE WILL BE FORMING AN ABC 100% SYMMETRY PATTERN @0.90590 WHERE PRICE COULD GIVE A POSITIVE REACTION HAVING IN MIND THE WAY AN ABC IS TRADED…. 1ST TRADE BELLOW A @1.43767 OCT 16 LOW TO @0.90590 100@ SYMMETRY 2ND IF PRICE GIVE US AND FORMED ANY INDICATION OF BULLISNES @0.90590… THEM WE TRADE BACK TO A @1.43767 OCT 16 LOW FOR A CORRECTION AT THIS POINT WE COULD HAVE A CORRECTION OR A FURTHER RALLY TO B APR 18 @1.43767
Short
by TradeChartPatternsLikeThePros
4
$DHT can rise in the next daysContextual immersion trading strategy idea. DHT Holdings has a strong upward trend. The company provides shipping of oil. Due to the oil prices had fallen, the demand for their services rose. This and other conditions can cause a rise in the share price in the next days. So, I suppose the $DHT price will be rising in the next days. So I opened a long position from $6,47; stop-loss $6,02; Information about take-profits will be later. Do not view this idea as a recommendation for trading or investing. It is published only to introduce my own vision. Always do your own analysis before making deals. When you use any materials, do not rely on blind trust. You should remember that isolated deals do not give systematic profit, so trade/invest using a developed strategy. If you like my content, you can subscribe to the news and receive my fresh ideas. Thanks for being with me!
NYSE:DHTLong
by KozakHlib