My prediction for the next recession!

FX:SPX500   S&P 500 index of US listed shares
Massive retraction in equities should happen after this brief counter rally comes to an end.

A larger and sharper drop will occur as volatility cycles increase in amplitude and frequency every year.
Also a bear here, but I feel like a drop of this magnitude is unrealistic. I have a target of 1500-1600, where we peaked in 2000 and 2007.
+1 Reply
MarcusWilliamson sonatine185
Same here, its more bombastic chart to get readers interested (I have used this on SeekingAlpha).

There is no physical way we can get down to that level as quickly as I have depicted, with all the circuit breakers etc. They would ban short selling (and probably selling) before we got half way.
Looks like every one is selling :) I am not trading stocks but I see different perspective of pattern
Stock Market Rally
In the financial markets most of what happens isn't predictable or 'expected'. Building charts to reflect patterns is dangerous territory.

I know I am a massive hypocrite for posting a chart doing such a thing!

However it is extremely important to look at the factors that created the price movements then look at these factors going forward (have we still got QE 4,5,6 lined up, how much more debt can US take on, are negative interest rates on the horizon?). Whilst there is a bias for upward growth in the markets, valuations are reflecting bubbles, bubbles must pop. The economy has not grown or developed enough to reflect the massive market valuations (in my opinion) we have replaced solid jobs and industries with self-service and seasonal bartender style economy.
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