I got a bit of criticism over not being clear enough in my previous chart. So i have created specifically a Nasdaq index chart which will show my thinking more clearly.
The Nasdaq index back at the start of 2000 was the bull market to end bull markets. The innovation of using the internet was a technological revolution and no one saw an end to the bull market...until it ended.
The end coincided with a break of medium term trendline as the internet startups folded one by one. From that point onwards the Nasdaq entered a brear market and didn't recover the old highs for another 15 years.
We're in a similiar position today, with the fed about to raise rates to control inflation, no one appears to think the impossible is possible.
It is.
If we break this medium term trendline, which appears to be very close to breaking (2 weekly closes below the line would confirm a break), we would expect a bear market to follow. This could take decades to recover from.
What goes up, must also come down (at least a bit).
The fact that the nasdaq market cap is more than half comprised of only 6 companies, suggests that it is just as sensitive to a large correction today. Albeit the reasons for a bear market will be very different.
Easy money has distorted the markets and funds like Arkk that think 40% annualised returns are possible with these stocks may be signs that we are at frenzy level of bullishness (just like in 2000).
I do not expect the bear market to be as bad as the beginning of the millenium, however i do think it will be signficiant and it could be coming sooner than expected, with fed tightening expected to quicken.
Didn't mean to criticize too much on your other post :P
This is a nice perspective though, like you're showing, last time, closing below that monthly trend made with the wicks, so you could also draw this on a weekly chart of closes not just wicks, that a second close below the line confirmed the bearish breakdown last time.
Food for thought, nice charting.
From the look of the other big FANG right now, a lot of them are near big support, at least on the daily.
VIX and VIX3M dont appear to be too bullish; I need to double check on the SKEW also.
Really interesting pivotal point though this next week or so, lets see where it closes!
One other caveat is when you look at demographic analysis, the millenial generation is entering their peak earning and spending years only just now, and it should last about a decade.
We might be in for another "roaring twenties" followed by another "dirty thirties"; just imagine if history really rhymed that closely a decade later haha
Neji1453
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In 2001 it was completely different situation, you just can't compare it... There is simple answer, if Microsoft and Apple will crash, Nasdaq will crash too. So you need to answer the question, how possible is that Microsoft will crash? Not very high, trust me. :)
USDOLLARISKING
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Could this be the worst crash in history and make the 1929 crash look like a joke?
TraderCaps
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A look at SKEW vs Nasdaq100
Spaceshipultra
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do you see a bearish Wolfe wave in this up trend? lol
Spaceshipultra
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I fully agree with you and understand where your coming from. I think an economic downturn is on the horizon. fed constantly putting bandaid over the inflation wound. Same guy in office now, was in there making decisions for the 2008 correction. The hardest part is knowing when the top is in. it is hard to compare where this top will be compared to when 2000 topped. Nice Chart and analysis! Thank you for sharing.
Didn't mean to criticize too much on your other post :P
This is a nice perspective though, like you're showing, last time, closing below that monthly trend made with the wicks, so you could also draw this on a weekly chart of closes not just wicks, that a second close below the line confirmed the bearish breakdown last time.
Food for thought, nice charting.
From the look of the other big FANG right now, a lot of them are near big support, at least on the daily.
VIX and VIX3M dont appear to be too bullish; I need to double check on the SKEW also.
Really interesting pivotal point though this next week or so, lets see where it closes!
One other caveat is when you look at demographic analysis, the millenial generation is entering their peak earning and spending years only just now, and it should last about a decade.
We might be in for another "roaring twenties" followed by another "dirty thirties"; just imagine if history really rhymed that closely a decade later haha