Looking at the log scale going back to the great depression, there are several things that we can see. We've been in this channel for almost a century. Ebbs and flows and signs that we are running out of steam.
I heard people joke around a few months ago that the stock market just "keeps going up" but if we're being honest with each other, we're running out of runway and there's a cliff in front of us. If we can't get off the ground, we're going to fall into the ocean.
Alright. Bad analogies aside, we're seeing divergence on the 6 month scale going back to 1999 and the recent fall in 2017. We're at the top of this channel as its drawn and while there's nothing to really say we're going to fall tomorrow, there are certainly signs that we're in a euphoria stage in the stock market.
1. Trade wars. Need I say more?
2. . USA is printing money like it's going out of style
3. Interest rates cut. The economy is so good, yet we're cutting rates. What?
4. Trump. Like him or hate him, there's definitely euphoria around the stock market around election time and right after his election.
5. Yield curve.
I could go on but these are the important pieces of information I am holding near and dear to my heart.
I don't consider this a dire warning as the market can continue going up but we are quickly reaching the point where if (or when?) we collapse, it could wipe trillions out of the stock market.
Please be careful. Watch for big companies to fall first. Watch Amazon, Apple , Netflix . If people are bragging they have $500Bn in a stock, they're probably looking to sell it to you. You don't generally brag about big positions unless you're looking to sell.
No targets. No timeline. This chart creates one candle every 6 months. This is a slow moving dragon.
Trade carefully friends.
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