I posted this idea last year and I've been amazed at how similar the giant broadening formation has rhymed from the 60's-70s. I have several other forecasts that involve at least a 50% retracement from the March rally and this helps to paint that picture quite well. Will the Fed step in more heavily if we have another sell off? Does history repeat and we break up into a hyper bubble? One of my forecasts involves us retracing the entire corona rally and taking out March lows. I believe the Fed would step in very heavily in such an event but what happens if we retrace just 50%? Keep an eye on this giant broadening pattern and be prepared to change your bias based on which direction we break. Eventually we're going much lower or much higher.
Original forecast from Nov 19:
Original forecast from Nov 19:
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Let's see if the vix can get some traction starting soon..
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(The yellow fractal is not my forecast although it's a possibility. That's a clone from 2015-16 where the market dropped a 2nd time before the next major leg up.. While I believe we will get at least a 50% retracement, I'm leaning more towards us making a lower low over the next 4 months. I believe the current economic situation is EXTREMELY ugly, and I fear, much worse than we imagine. To many (myself included), this latest rally has been rather surprising.. I had a good idea that we would rally big from March but not like this.. The market (whether it be real or artifical) is forward looking and doesn't waste time looking in the rear view mirror. It's easy to see that this massive rally is not only the Fed's life-support, but it's also pricing in the recovery (short term recovery). At some point, it's going to begin pricing in the reality and the weight of the situation. Let's face it, it's bad- far worse than a recession. I am leaning more towards a lower low (than March). I suspect that if that happens (regardless of who's President or perhaps, regardless of the fundamentals), we could have an explosive recipe for a hyper bubble that just goes vertical over the next couple of years.. It's possible that this giant megaphone 'top' is just another consolidation (like 2015-16) into this massive bubble. In the near term, however, I think the market will begin the process of pricing in new 'news'.. Mild or chaotic- I would advise looking forward
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dow a little different -
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dow on renko- I refer to this to keep things simple... Notice the similarities from mid '19... interesting