Momentum and price action are looking like a top has formed on the US Stock Market, and based on the Elliott Wave/Neowave count it appears that the market could be topping out for several years.
This massive crash will likely be accompanied by more COVID lockdowns, a real estate collapse, and several years of stagflation where inflation is abnormally high and economic activity and investment is abnormally low.
This fits in perfectly with my larger 100 years DOW JONES analysis, which indicates we could see a few years of choppy price action (stagflation) before getting the largest bull market in history which will be caused by elevated levels of inflation.
With companies like Evergrande and Zillow on the verge of collapse, a small correction in global real estate prices could lead to cascading liquidations and massive illiquidity in the real estate market.
The FED has also begun tapering their bond buying program, which could lead to higher interest rates and tighter economic conditions.
COVID cases in Europe are skyrocketing and governments are moving towards stricter lockdown measures because the vaccines have proven to be ineffective at stopping the spread of COVID.
The Biden administration has also begun attacking high oil prices and we could see a large correction beginning to happen in Oil prices which have reached 7 year highs. Stricter lockdowns could also reduce demand for oil and in a worst case scenario lead to negative prices temporarily.
Right now it's looking like all the conditions are set for a massive liquidity crisis. Still possible that we narrowly avoid all of this but this point it's best to be prepared.
haha, nice chart, now i got it - you are painting a very big diamond!! great input thx!
Dopaminexx
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I think many of these TA charts are forgetting to account for money supply. You are showing something parabolic but in reality that has been caused by more money printing. Divide it by M2 and you’ll see we have been sideways for a long time
CapeAfrican
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Chinese Real Estate is a larger bubble than Sub Prime ever was....Evergrande.....et al....When they drain the $8 Trillion $$ on the FED balance sheet ...that will be felt and have to come from somewhere. A nice way to distract from Economic Disaster is to pick a fight....Like next year would be a good time for China to Annex Taiwan.....that breakaway republic....they just digested Hong Kong.... and no harm came to them
Intuit
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@SeattleGuy, World War II helped the world get out of the Great Depression by spurring a new wartime economy. It is definitely possible we see some major conflicts rising in the next few years which could help end the economic stagflation while still maintaining high levels of inflation and economic growth.