The fractal analysis in the current weekly timeline shows only one corrective motion. Its size is larger, as a 2X fractal appears to be formed. In this case, we can expect another significant increase. Since fractal signals and the trading fundamentals are completely opposite, I will return to looking for a long position after a few days of ascent.
The reason why this grahp looks outlandish and "forever moon" is because people forget the factor of heavy devaluation of the us dollar. An extreme example would be the best performing stockmarket currently, the Venezuelan index measured in yuan.
With this in mind, the implications of a rally of this magnetude would bring serious consequences to people who are not on wallstreet. Since a stockrally probably wont correlate 1:1 to the devaluation.
In current dollarvallue terms I am quite bearish, but support your case from an inflationary perspective.
@Justin_06, Thanks for the comment. Yeah it could be even higher in a bolivar :) This is a 2 year forecast. I still don't expect to collapse in the next 2 years. In fact, I look for a flatter but rising curve from the analysis. I do not consider the 4200 usd target price unobtainable. Analysis is not a "forever to the moon" effect. It's a recurring fractal that is very common in the stock market. For my part, I will continue to buy US stocks.
Captain_Walker
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It's a weekly chart. The panic is on lower time frames. 😉 Also watch the VIX index for signs of panic. The situation in your box of 2X fractal is the classic sign of a weakening trend. We don't need to 'wait and see'. Why it's happening now. The DJI Transportation index is also one to watch for underlying problems. Yes - I know you deal only with fractals but there are realities elsewhere.
Whether or not the worsening of the inverted yield curve matters for the USA, the point is that globally across 15 countries yield curves have inverted. The perception of a looming recession is enough- and has caused panic in bonds and stock markets.
There is an arrogance associated with the SPX and Wall Street (DJI) by folk in America (obviously). The US economy which isn't the stock market, cannot fight the whole global downward trend evidenced by the IMF and even the Eurozone. The stock markets are the tip of an iceberg - representing confidence in the underlying economy. The reality is that the America's economy with now $23 Trillion on debt, is in a very fragile state.
meszaros
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@Captain_Walker, Thank you for this detailed comment. I agree with what you have written. But I also see the SP500 moving upward in the W1 timeline. For the time being, I see no technical signal for a stronger south turn. But I take your opinion seriously. Please write down at what level you see a chance of a more serious fall.
Captain_Walker
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@meszaros, As you know I don't do predictions (only focusing on probabilities) so I never project on levels for serious falls or pumps north etc. The weekly time frame is already falling as I've shown in other posts. The trend down may have begun already. But that's more readily seen in the lower time frame sub-structure.
Furthermore, the weekly time frame hides the underlying structure. So yes based on your fractal analysis you will see what you have stated. I have no rebuttal of the weekly time frame from your fractal perspective. I see exactly what you are seeing and yes your projections are correct relative to the model you use.
As you see I've looked into the sub-structure of the weekly. But the pattern of the weekly trend is flashing for a weakening trend. As you are confined to fractal analysis, you are unlikely to see the weakening which you might have seen using a different set of tools.
I've said repeatedly that there is no one road to the promised land. That's why I'd use any set of tools or perspectives to analyse markets.
With this in mind, the implications of a rally of this magnetude would bring serious consequences to people who are not on wallstreet. Since a stockrally probably wont correlate 1:1 to the devaluation.
In current dollarvallue terms I am quite bearish, but support your case from an inflationary perspective.