Since Microsoft bought ChatGPT back in March 2023, the price of NASDAQ:MSFT stock has gone on to replicate the same pattern as the 1987 S&P500 stock market rally.
Does it mean anything all by itself? No. It still needs a catalyst for the drop to happen. The 1987 stock market crash had many triggers and catalysts and the drop was a sharp 40% from August 28th, 1987 to October 19th 1987.
What would cause a sharp 40% drop in NASDAQ:MSFT? You all could type in your guess in a reply to this chart. It could come about under a variety of situations, but it would take an act of Government regulation or a major sea-change in laws or the business environment.
When you see people posting "overlays" of the market to past debacles, you will find almost NONE of them work.
Last year in January I posted a pattern where NASDAQ:TSLA was mimicking the fundamental and technical price pattern that NYSE:MCD McDonalds had from over a decade ago when it fell 75% on a rough patch for its business. It turned out to be identical and NASDAQ:TSLA rallied over 150% last year just exactly the same as happened to MCD. I'll post the link down below for you to view.
The overlay here between NASDAQ:MSFT and the 1987 SP:SPX is pretty amazing but we have no catalysts to make it drop. Stay tuned on any weakness and look for cheap hedges (long term puts out to July-Oct-Dec for this year). Don't spend more than 1% of an account to hedge a position, but if you hedge it correctly you can protect against a large decline without much cost to a portfolio.
Here's hoping this pattern doesn't 'pan-out' because it would be or could be very disruptive to the markets.
Wishing you all health and success in the markets this year and thanks to TradingView for all of the great tools for doing research!
Great analogy ... let's see if it pans out. This idea has been selected for Editors' Picks! Keep them coming!
dcoul002
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@TradingView supporting terrible technical analysis like this with editors picks is misleading less informed readers who may follow this idea.
riazmanjra87
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foolish af
basictradingtv
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Hmm, 300 strike puts might be a little too agressive and you should generally never short a new all time high!!!
Pandorra
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@basictradingtv, Purely FUD, sponsored and topped by @TradingView . FUD is generally a propaganda strategy to influence perception by disseminating negative and dubious or false information, and is a manifestation of the appeal to fear. ....there are too many pests these days.
timwest
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@Pandorra, Nothing FUD about it. It is purely a price pattern. And what about your comment about "dubious and false information"? It is an "interesting observation" of a pattern repeating itself. The pattern needs catalysts and those catalysts are not on the table.
Pandorra
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@timwest, Tim, with 20+ Yrs of trading experience I know well how these things, so-called Bull Traps and Whipsaws price patterns are working. That happens time to time on financial markets, but not because 1960's are quacking, 1970's are Mimicking, 1980's are Winking, or 1990's are Farting. Seriously, it's a clear FUD and a propaganda strategy, without any historical basis, just to pest and to influence perception by disseminating negative and dubious or false information, to appeal to fake historical parallels and fear. With your 'wizard' badge and 18.7K followers I think this is not the way it should be, as your findings are utter twaddle.
timwest
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@basictradingtv, It is a low-risk, high-payoff strategy to fade extreme sentiment. I just am extremely knowledgeable about the 1987 crash which 95% of users here weren't even alive at that time and were not actively participating in the financial markets. So I bring a long term perspective (and have been an early technology adopter).
This idea has been selected for Editors' Picks! Keep them coming!