SPX (S&P 500 Index)
Stocks vs GoldSince 1971 when the USD and most other fiat currencies were not linked to Gold anymore, we haven't seen stocks really go up. Stocks expressed in Gold were already up substantially at the time and after Nixon closed the gold window Stocks dropped 95% against gold. Below I have put the DJIA since 1915 and 1971, as these are the best data we can get. The truth is that on Tradingview I can cleanly analyse only one market at a time as it doesn't have the global combine stock market capitalization. Yes there have been lots of other markets that have gone up since that time and the global economy has definitely grown, but I am here to make certain points based on the fact that the US economy is the largest in the world:
A. Since 1971 the US stock market has dropped 95% and 87% and between those two big drops it had a 4000% increase
B. At the moment it looks like stocks have started their new bull run in 2011
C. In USD terms the DJIA has been going up for time periods that are a bit longer than the total amount of time it was going down & sideways, the time for the next drop might be almost here.
You might be thinking why does that matter? You might think: Gold is pretty useless, it has an inflation rate of about 1-2% and all that matters is that stocks are going up and paying dividends! The truth is that as a whole stocks have performed better than Gold and have provided nice dividends through the years to investors, but Gold has had much less risk and until 2011 it was the best store of value. However you have to understand that this huge rally and these huge drops happened as Central banks and commercial banks globally increased the total money supply (in dollar terms) by about 20-40x. Gold was the soundest money the humanity ever had and moving to a new insane monetary standard distorted things on all markets and created various bubbles. We can see that the global money supply is about 80-90T 'worth of USD' and the total worth of all stocks globally is about 70-80T USD. By following the way new money has been created/printed we can see that stocks have pretty much tracked the global expansion of the money supply. Someone could say that 'look there is 225T worth of real estate', so the global money supply shouldn't matter, however the reality is that: a) stocks pay dividends and their price has some correlation with their dividends and b) stocks need liquidity which comes from money, c) real estate can be used for various things, it is less risky and is market growing with global population and d) there is 245T of global debt makes anyone realize that something isn't right. The funny things is that part of the debt has negative yield and more is going to go negative. This means that Real estate and Bonds are in a much worse bubble that stocks actually are, but they could go much higher.
As you can already see, unsound money from governments and Central banks is causing a tremendous misallocation of capital, it is destroying wealth and at the same time it is concentrating wealth to the hands of those that have already had massive wealth. It should be obvious to everyone that US stocks should had been worth much more than they were worth in 1971... or should they? Given that money is a zero sum game, if there wasn't new money being printed, then stocks shouldn't have really moved up or down much. Only really good investments would succeed and pay a dividend, while bad ones would quickly go away. Essentially the value of our money and investments would go up, without a 'special' number going up. There are many more factors playing a role in this, but overall stock markets going up 20-50-100x up is nonsense created by Central banks. Free and non-manipulated markets don't behave like that and don't do crazy things like have 10-20 years long bear markets during peaceful and prosperous times. What has made things a lot better and have prolonged the ability of Central banks to do these crazy things is the technological progress we've had over the last 50 years.
Below I've put Nasdaq 100 expressed in Gold which is showing for how long the tech stock bull and bear markets really lasted in the US. To me it shows that there is a high chance that we are in the disbelief phase / 'this is a sucker's rally' phase. This fits nicely with the fact that most people are expecting a recession (and rightfully so), as most people get it wrong and the market can stay irrational longer than you can stay solvent. In my opinion this new tech bull run is based on: a) the exponential progress in technology, b) the fact that the market came out of a vicious correction that lasted 12 years, c) gold being controlled by central banks d) gold is 'outdated' in a digital world and e) banning cash, full on negative rates, more money printing, f) a new digital banking system with Central banks creating digital, while they use that money to start buying stocks.
However how large is that upside given the current macro picture? How long can the market stay irrational under the current awful global financial conditions? In my honest opinion the upside here is somewhat limited and the risk quite large. Until stocks many new ATHs I'd stay out of stocks, as we could be moving into a recession which could initially cause a drop in stocks. Don't forget that Central banks will try and fight the recession with everything they've got. Also don't forget that the US still remains the best place to put your money in. So in my opinion we will eventually see a prolonged period of stagflation or simply a period where stocks, bonds etc keep going up on a really unsound basis until everything breaks down. No idea when things start breaking down, but the one thing I am certain off is that I wouldn't want to hold much fiat. It is the first time that we are observing such a crazy period of currency wars with a quite a lot of changes on our monetary and payment systems. As I've mentioned before, USD, JPY, Gold, Silver, Bitcoin and maybe some stocks (i.e US large tech stocks) are the only assets i'd touch.
TNX study using Parabolic SAR & 40MA makes trading SPX look easyHigher highs not impossible in following months here's why. In this Parabolic SAR pattern match I'm interested in the months subsequent to a match when yield closes first time below average (marked by red verticals). It's been a good time to buy the months after, and for S&P to go on & make new highs. NOT ADVICE DYOR.
NOTE THE CORRECTION ON CHART BELOW where second A starts.
"Black Hole" Golden Halo" By Woody Dorsey-Must ReadWoody Dorsey just sent out an essay on some of the patterns he has developed over his 40 years of trading. It is very interesting and will enlighten you on some of the terminology used here. The entire piece is in the link below.
What is a Black Hole?
A Black Hole is a defined time period when extreme market events may take place in a very short period of time. I invented this term based on 40 years of studying markets and psychology. It is an advance in the field of Behavioral Economics. It is beyond the scope of current Rational Market theory. In Efficient Markets it should never happen and there should be no way to anticipate such events…..but. Human Beings, Teenagers, Investors and Markets do freak out once in a while. We generally don’t like to talk about it. Human Nature is Market Nature and it isn’t always pretty. Black Holes are specific negative stock market patterns.
Keynes and the General Theory of Market Prana
The most interesting ideas may never be published. You can’t always google the real story. Maynard Keynes, the eponymous British economist, is not so well known for his suggestion that “Animal Spirits” lay at the core of all economic behavior. Why do Humans and Markets behave the way they do? It is the Energy. Follow the Money may really mean follow the Energy. The original term for Energy is Prana. It is the Market Energy or the Market Prana which influences Market buying and selling. I know you don’t know what I am talking about. It is not Rational but markets are not really Rational either. Certain Stock Market setups produce a specific Prana which induces a Black Hole. Okay this may really seem like a lot of inside baseball for most folks who assumed they were well aware of the rules of the game but that is where my research has taken me. The Psyche, the Animal Spirits, the Market Prana are the real prime movers of Markets. I invented the term Black Hole but the Energy already existed.
RFead the entire piece by clicking on the link below (Black Hole)
S&P 500 Index CRASH (The Drop Starts)I've been warning my dear followers and cryptocurrency lovers about the S&P 500 Index crash for a long time.
For conventional minds, it is really hard to grasp the fact that the SPX will crash massively and become ugly due to all the lies and hype spread through the conventional media news systems, but charts do not lie.
Reading charts is like looking at a foreign language, it might be hard to understand if you don't know it, but if you know it, it is basically the same as your own native language.
This chart here is speaking to me, to us, and it has lots to say.
First, it keeps on telling us the media is lying about the bullishness of the SPX, we see hype, hype, hype... Yet it can't break the last high.
Second, it gives us clues and shows us things that are not easy to understand if you are not advanced at reading charts; using my indicators, we can see bearish divergence growing stronger every day that goes on.
Finally, bearish volume growing up on a Friday while the EMA10 support broke right away...
Let me tell you honestly... This is my last warning.
The SPX 500 will crash, according to the chart above, no matter what anybody says.
Conditions for change? Move back up, spring up and keep going up all the way... But this isn't really happening since the SPX hasn't been able to break the 2895 resistance for the past 166+ days.
I am sharing this as a friendly reminder, warning, for your learning and entertainment as well... So feel free to hit like if you want to now, and let's focus on making money with our altcoins trades.
This is Alan Masters.
Namaste.
US Stock Markets: And what's Mueller got to do with you?!This screencast is speculative - and I invite the full brain power of Tradingview's community to consider the variables which might affect the US Stock Markets around this time. Let's do this together.
The stock market has retreated, probably due to nerves about the Mueller report - among several other things. If the report contains nothing on which Trump is impeachable then, I'm expecting a pump north.
Mueller's hit list so far has been :
1. PAUL MANAFORT
2. RICK GATES
3. MICHAEL COHEN
4. MICHAEL FLYNN
5. GEORGE PAPADOPOULOS
6. ALEX VAN DER ZWAAN
7. RICHARD PINEDO
(Names are in all caps only due to copy and pasting. Names and convictions are all in the public domain, so I'm not defaming anybody.)
Some may think that with so much dirt around it's unlikely that Trump will come out of this clean. Hey, this bull market is about Trump - let's not debate that. If Trump goes down the markets go down like lead balloons. Alternatively, if Trump comes out clean enough, expect bullish moves which may then be limited by other factors.
Separate to Mueller's investigation and report, there are 16 other investigations into Trump. If just one sticks, there could be catastrophic collapse of the American markets - with shock waves globally, hitting Forex as well.
We have other variables to consider :
1. The Fed 'money printing' press going to be turned up.
2. Bleaker than expected economic projections by the Fed and Draghi.
3. Expected weaker US Dollar - creating bullish pressure in the long term.
4. Flattening or inverted yield curves
5. Uncertainty's and delays on deals with China.
6. Potential Brexit shock waves.
7. Germany struggling against recession.
8. 'Housing' market bubbles in several countries including the US, in trouble.
9. US and Global debt totally out of control.
10 etc. .. and much more.
Sorry - I don't know what's gonna happen. I do not give tips on entry positions.
The Week Ahead: S&P500Last week we discussed the possibility of the market moving towards and breaking the 2800 level which would confirm a 100% retracement back from the recent move lower.
Scenario A: The Linear Regression is still showing a positive moving mean, which is encouraging for the SPX. In Scenario A, we could see the market continue to move towards it's mean, which also suggests a break above the 2815 level. This is significant because of the previous two highers were created at this level. Should it break, this shows that the market's buyers are still in control. With the NFP this Friday, plus other economic factors, we could see a positive run for the SPX this week. This will be reaffirmed by the break to the upside of the Parabolic levels too.
Scenario B: Market is held tightly at the 2815 level and retraces downwards again towards 2740, 2720. Should this happen it would mean it's broken out of the Linear Regression channel and broker the Parabolic levels. Should the HMAs crossover to the downside, this too encourages the Scenario B to hit the mentioned levels.
This analysis is for informational purposes only and is not a recommendation, buy/sell signal, or advice in any format.