Hi everyone, I want to share my idea of what I believe is waiting for us regarding the Nasdaq 100 and most possibly the other indexes and global economy.
Now I'm not going to go into a discussion of the fundamentals and the these and that's cause that is entirely another topic for discussion. Anyone trading these markets has an idea of what is happening regarding interest rates, the U.S-China trade war, this and that and so on and so forth. I'm just going to briefly explain what I see in the charts and where we could expect markets to go in the short to medium term.
I see a lot of analysts calling for new highs on the S&P and other indexes based on earnings reports looking good and companies making a killing and overall fundamentals that look good. However, as any good trader will be able to tell you, yes fundamentals are important, but so are technicals and I feel a lot of analysts stare themselves blind to the fact that we are in a 10-year bull market and markets are overbought when looking at higher time frames like the weekly and monthly charts. Yes some of them acknowledge that we are in the "7th or 8th innings" and that a down move is possibly on the cards for 2019, 2020.
However, I believe we could possibly already be going down and have made our highs already and I will explain. When looking at the chart above we see a possible H&S pattern forming. We experienced a bounce upwards over the weekend of the G20 meeting(which many contribute to U.S-China talks over trade - which I believe is irrelevant as the charts indicated that it was poised for a bounce, regardless of the talks) thus forming the right shoulder of the pattern. Should we see a completion of the pattern and a price breakdown we could see price move lower towards the highs of 2016, perhaps even lower?
I say even lower as it is no secret that the global economy is staring a credit crisis in the face, which can be seen as the "bubble" after the housing crisis. I say "bubble" in inverted commas as people tend to react very defensively and sometimes hostile when you call something a bubble.
Bubble or not, we know something is happening due to the increased levels of volatility and legends like Ray Daglio and Paul Tudor Jones warn people of downside risk going forward.
Many thanks and as usual, comments and ideas are welcome, please keep it to positivity :)
Now I'm not going to go into a discussion of the fundamentals and the these and that's cause that is entirely another topic for discussion. Anyone trading these markets has an idea of what is happening regarding interest rates, the U.S-China trade war, this and that and so on and so forth. I'm just going to briefly explain what I see in the charts and where we could expect markets to go in the short to medium term.
I see a lot of analysts calling for new highs on the S&P and other indexes based on earnings reports looking good and companies making a killing and overall fundamentals that look good. However, as any good trader will be able to tell you, yes fundamentals are important, but so are technicals and I feel a lot of analysts stare themselves blind to the fact that we are in a 10-year bull market and markets are overbought when looking at higher time frames like the weekly and monthly charts. Yes some of them acknowledge that we are in the "7th or 8th innings" and that a down move is possibly on the cards for 2019, 2020.
However, I believe we could possibly already be going down and have made our highs already and I will explain. When looking at the chart above we see a possible H&S pattern forming. We experienced a bounce upwards over the weekend of the G20 meeting(which many contribute to U.S-China talks over trade - which I believe is irrelevant as the charts indicated that it was poised for a bounce, regardless of the talks) thus forming the right shoulder of the pattern. Should we see a completion of the pattern and a price breakdown we could see price move lower towards the highs of 2016, perhaps even lower?
I say even lower as it is no secret that the global economy is staring a credit crisis in the face, which can be seen as the "bubble" after the housing crisis. I say "bubble" in inverted commas as people tend to react very defensively and sometimes hostile when you call something a bubble.
Bubble or not, we know something is happening due to the increased levels of volatility and legends like Ray Daglio and Paul Tudor Jones warn people of downside risk going forward.
Many thanks and as usual, comments and ideas are welcome, please keep it to positivity :)