liberatedstocktrader

Learning From 5 Markets Cycles & The Crashes That Ended Them

Short
SPCFD:SPX   S&P 500 Index
To put into perspective what could happen in the current market climate is always helpful to study historical market behavior.

For this analysis, I am using Gann Boxes a great drawing tool from TradingView.

Although each market cycle is different in duration, boom and bust, they share common characteristics.

The ability to be unpredictable, erratic and wipe out wealth.

Another trait they all share is the ushering in of a new era of wealth building.

Only the new era that we face may be built on deflation, significantly weakened currencies and potentially a new world order. Additionally, in the west, the distribution of wealth is very seriously skewed toward the super-rich. Things will need to change.

Anatomy of wealth creation and destruction.
• The 60s and 70s ended with an 80% loss of gains accumulated.
• The 80s ended with Black Monday which wipes out 38% of gains (relatively mild)
• The Dotcom Bust wiped out 60% of gains
• The Financial Crisis wiped out 100% + of gains

So far, the Corona Crash has been relatively mild, thanks to massive government intervention, with currently 25% of gains lost.

The question you must ask yourself is:

Is this the end of the crash? Is the retracement of the market commensurate with the actual economic activity & jobs market collapse?

Just be clear all options are on the table, including a retracement to Zero, for the S&P this is close to 700 points.
No one knows the future and we humans are notoriously bad at predictions.

What do you think?

Comments

At this point, the S+P 500, having already risen 30 % off the bottom from late March.
has already priced in a very severe 2nd quarter downturn in the US economy
yet right now is pricing in a 3rd and 4 th quarter recovery in 2020.

No one really knows what will happen.

The bulls may have gotten far ahead of the potential " reality" later this year
while the bears may have been way too pessimistic early on,
as the Federal Reserve has thrown trillions of dollars into the US economy,
an unprecedented action to rescue parts of the US economy from certain default.
+6 Reply
@The_Unwind, I'm just watching it with a large bucket of popcorn. People's reactions and points of views are priceless tools. I ain't the oracle but I'm here for the views... and money.
+2 Reply
craigemm AdrianZieniewicz
@AdrianZieniewicz,

DO$$$H-OLLAAA !!!

MY TYPE OF MAN!

JOIN MY GANG BRO.

+FOLLOW.

WE'RE ALL ABOUT BA$HING (((THEM))) $EN$LE$$ & PENNYLE$$.

CM
Reply
@The_Unwind, But I have to add, group psychology acts as if we're "getting back to normal". With that rising wedge in the SP500 I look at it and see a pool ramp.
+1 Reply
wicked analysis. thanks for sharing.
+2 Reply
WE ARE AT LEG 2 OF ELLIOT WAVE.

WAIT TILL LEG 3!

THE MORE THEY PLUG THE DYKE THE WORSE IT WILL BE...!

YUMMY FOR JUNE/JULY/AUGUST/SEPT/OCT PUT$$$ !
GRAB SOME CALLS TO HEDGE AND WERE ROCKIN' ON HAPPY GA$!

xx

CM
+1 Reply
How does GANN box give you 100% correction for current cycle?
+1 Reply
3000 by end of the year. The 21x price multiple is high. Earnings must catch up. The way this happens is to weed out the companies that are not profitable. It's a long vicious process. The US government debt will have to be sold to other countries. Or the dollar crashes long term.
+1 Reply
Great charting!!

Have noted Bulls vs Bears charting this forum a while already since the peak in Jan/Feb and have noted something quite interesting.

To make $$ one must do exactly the opposite of the major charting opinions on this forum!!!

Back in Jan/Feb - all the charts were declaring go long and sky is the limit with 3600+ is coming....but the crash happened.

Now 80% of the forum are saying go short because the big correction to -1500 is coming....I think I'll go long
Reply
Are you basically suggesting a 3-3½ year downmarket? I don't like that!
Reply
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