Not sure where to start, but maybe DOW Jones is as good as any other indicator. On the daily / monthly charts, a clear H&S formation can be seen, with a lower high (right shoulder). After a constant uptrend since 2016 at least (if we are not to count from 2009) this is a very clear indicator the markets are stalling and there is no more room for going up anymore. And like a good old saying says, what goes up must come down. Besides this obvious formation (that topped at an ATH on the 1st of October 2018 - very similar to the ATH before the 2008 financial crisis, that came on the 3rd of October 2007) the trend indicators and the RSI are also showing signs of weakness, pointing towards a down movement. The same formation can be seen on the S&P index as well as on NASDAQ but for the purpose of this idea the DJI will do.
So to me at least, the question is not if or when (since it already started) but how bad will it be; I am also curious to see what the "official" pretext will be that will trigger this well past due market correction. I personally believe that after Asia and US, now it is Europe's time to trigger it and what better ignition point then Deutsche Bank. If we look at the stock evolution of the bank for the past year or more, its value is at a historic low, without being able to bounce up despite several attempts. But what is more frightening about DB is their huge exposure to the derivatives markets; trillions of USD / EUR in unknown, content-less assets on the derivatives market.
Where to next? If the H&S will "behave", then in May we will have the inflection point where the market might ask the same question ... in my personal opinion, based on how long past due this correction is, the market will go all the way down at least to the 2016 support level. The question is ... what will be the effect on the global scale and how will the currencies / alternate currencies aka cryptos react to this.
Buckle up and enjoy the ride !
So to me at least, the question is not if or when (since it already started) but how bad will it be; I am also curious to see what the "official" pretext will be that will trigger this well past due market correction. I personally believe that after Asia and US, now it is Europe's time to trigger it and what better ignition point then Deutsche Bank. If we look at the stock evolution of the bank for the past year or more, its value is at a historic low, without being able to bounce up despite several attempts. But what is more frightening about DB is their huge exposure to the derivatives markets; trillions of USD / EUR in unknown, content-less assets on the derivatives market.
Where to next? If the H&S will "behave", then in May we will have the inflection point where the market might ask the same question ... in my personal opinion, based on how long past due this correction is, the market will go all the way down at least to the 2016 support level. The question is ... what will be the effect on the global scale and how will the currencies / alternate currencies aka cryptos react to this.
Buckle up and enjoy the ride !
Comment:
This is Deutsche Bank's stock evolution for the past 20 years (ATH in May 2007), support broken end of September 2018
