Wow guys, my brain is melting now but we have an amazing result!
Shout out to @mikemillion for the three decade trend analysis idea :).
Here's the logic: 1. Draw strongest trend line for both rise and fall 2. Set second line at next strongest trend 3. Extrapolate 4. Voila!
Looks like we're in a massive bubble sparked by knowing a drastic cut in taxes for the wealthy and corporations were coming after the election of Trump with a Republican congress.
This led to massive inflows of money and unprecedented levels of stock buybacks (don't forget about that!) all to juice the stock price higher for corporate executive bonuses.
The day after it became clear that coronavirus was not going to be stopped, there was a massive outflow of wealth 3x higher than at any of the highest points in the past two decades. (See BarCharts TRIN 20 yr and look at the date of that spike)
Now we're in a massive downtrend only being held up by unprecedented levels of stimulus for the START of a downturn well before it has even fully set in yet and Retail irrational exuberance. The wealthy who were playing the dead cat bounce also just began exiting the market with their money en masse. The wealthy are just sitting back and waiting for Retail to eat shit now so they can get back in again at the bottom.
That purple line aligns well with the 1500-1600 bottom call made in a lot of predictions. The white line is probably the world possible case but I've seen two predictions for sub 1000 SPX and can confirm it's actually plausible.
Finally this also incidentally confirms my 3264 peak call from Friday's idea so that's cool.
Can't wait for next week to start guys... just can't wait B).
I've run literally 100's of algos on 100 years of data and if there's one guarantee from every result, it's that there's never a guarantee in the results. I'd prefer not seeing 3,264 as all my stops will kick in, but if it means re-entering at a better position I'll happily take another hit. Great job on the chart btw. It would be interesting to attach the interest rate at every peak and trough to see the correlation. Maybe the p/e of spx as well
MentalMonsoon
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@z3m25, Good luck on those stops kicking in if the market blows past them and your exchage barfs on it's self like they all did back in March
z3m25
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@psolomon, I'm short, not long. If it falls like a brick I win.
ProfitHarvest
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@z3m25, I like to think market psychology is loosely predictable.
Def lots of chart bait with this new model. Will be dropping iterations for sure.
mcenergy
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But all the tech talk we have never seen the FED go into direct stock buy backs before. so they are funding the banks and direct buys to prop this up.... they wont let it fall till after the elections and even then they will just print trillions more to keep it all alive and well. The goal is for the FED to own it all mostly and then bring in a new money system.
kaxo1
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@mcenergy The Fed is just persuading hedge funds and portfolio managers to start buying and building levered positions again, but they aren’t actually doing much more for the equity market. Buying a handful of random corporate junk bond ETFs is just a ruse to make it seem like they’re doing something. The Fed have no control over anything, as seen but the complete meltdown in the offshore dollar market in March that led to the firesale of US assets and eventually became the next GFC. It’ll crash again whenever another bottleneck in the overnight repo market appears, which might be in September, might be in December, might be next March, who knows. The banks know that it’s a ticking time bomb, that’s why bond yields are stuck at 11bps and the yield curve is pricing in deflation, not inflation despite trillions of “printed money”
ProfitHarvest
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@mcenergy, they have to let some steam off before pumping into election. Otherwise it’d be a ticking timebomb. Can’t have a crash hit in Sep/Oct.
@kaxo1 “the Fed have no control over anything” bingo