Add another zero Jerome

[786Trader]

Equity is the only game in town as there is no profit in treasury or gilt or even bonds.  Commodities are also over-bought.  

Last recession ultra low interest rates and QE led to a new commodity boom as China picked up the slack and got on with expanding at prodigious rates. QE underwrote the value of govt and commercial bonds and equity. This new mini recession (as they would have us believe) has resulted in the largest market intervention ever. Trillions of dollars, hundreds of billions of pounds, trillions of euros. All invented out of thin air. Economies have been poorly managed for a hundred years and debt has been the way out. Since then debt has been viewed as a good thing. Now debt is essential. Mountains of it. Whole continents of it. The concept of debt is borrowing a sum of money which is to be repaid. The new concept of debt is a sum of money to be repaid eventually, the longer the period of repayment the better. This is especially effective if the interest rate is low. Now it is non existent. Therefore, now the practise is to borrow as much money as required and more (don't forget the fees and bonuses) and repay it with more borrowed money, where no one really picks up the tab or pays the vig, as there is no vig. Piecemeal repayment and a policy of kicking the debt down the road, as someone else's problem. That's government debt.  That's the US dollar, the GBP, the Euro, the Yuan. Not the Norwegian Krona.

QE and mass injections of liquidity have kept global equity markets strong, especially the Nasdaq, S&P 500 and Dow, most of which have made all time highs at a time when the world and especially the US, is actually struggling with a pandemic, mass unemployment, civil unrest and enormously vast national debt. None of which the equity markets have noticed or seem bothered by. It's all "meh" to equity traders. Everytime there is bad news one just has to ask "Hey Jerome, it's looking a bit dodgy, need some more cash" and the ever helpful Jerome just adds another zero to the credit limit. It's not his money, after all. It's all ones and zeros now anyhow. 

All of this has prevented and is preventing the markets from reacting normally. Capitalism relies on a system of boom and bust, not to mention wholesale exploitation of people and commodities (the earth's resources). It's a not a great system, but as compared to the witnessed alternatives it's the best we have got, until we develop a better alternative or improve what we have. All it is doing is kicking the can down the road. The system,as it is, needs the corrections. The corrections are generally not politically advantageous to incumbents. 

The situation we have now is one of willful ignorance. If the situation is ignored, it will not exist. In the meantime the Fed can keep on pumping more liquidity into  asset bubbles and hope no black swans turn up...they may get away with it until past the election. Sooner or later this bubble will become unsustainable. And pop. Be prepared. I know I have ranting on about this since July  when the markets over compensated with too much too quick, and the V looked the shape to be in, but am sure of it (the overvalued, over compensated Dow and Nasdaq)......there will be a reckoning. It is inevitable.

[dmedin]

Karl Marx was the grand master of critiquing capitalism.  His Achilles heel was that he couldn't make any constructive criticisms (i.e. with what to replace it).

I see people with enormous amounts of negative energy about QE etc, and not a single one proposing a constructive alternative.

Well, except for the Austrian economists - who would allow corporations to govern the world without regulation and force us into eternal deflation via the gold standard.

[THT]

Absolutely - I view things a bit differently to others which for me makes 100% sense of the markets, so periods of "irrationality" for me can easily be explained.

Elliott Wave in 1999 published "Conquer the Crash" - the emphasis was on a deflating economy (USA) in the true sense of credit deflation for their expected ultra massive stock market crash they expected in 2000 - Low Int rates and QE were touted as possible weapons to be deployed - EW were though touting the end of the world stock market wise, that did not happen, but the Fed did launch the deflationary missiles - which they will say saved the markets

How I look at this differently covers a couple of aspects - some of which I'm not expanding on:

1. Interest Rates just as the Stock Market work out in cycles - The last time Int Rates were low was 1930-1951 - this was a period of 21 years give or take, the 2000 crash  brought low but not ultra low Int rates which have remained as per the 1930-51 period, the 21 years are up next year, so IF rates return to normality after that the cycle is tracking that of the 1930-51 cycle - We shall have to wait to see if that happens or not
2. I don't agree with the markets not working normally - For me they are doing exactly what is expected - The Stock Market follows a 15-19 year cycle, I know this for a fact as I've plotted it since the Dow came into trading in May 1792, the cycle is UP then DOWN/FLAT sequence then UP again etc- just as in 1929 the DOWN/FLAT cycle was due so was the same repeat in 2000 (hence a possible cause for the current QE/Int Rate cycle) - These UP/DOWN sequences link in with periods of stock market, credit and wealth Inflation followed by deflation in those items, how much the stock market declines is depending on where the cycle is - there's a Fibonacci calculation to determine this but it's not something I'm disclosing - It's the reason WHY the stock market crash of 1929 looks very similar to the 2000 crash - you have to look at and work with the speculators market at the time, in 1929 it was the DOW, now its the Nasdaq100

Now for the past 10 years I'm 100% convinced that the stock market follows that 15-19 year cycle sequence - I've done enough research to satisfy myself - All that has happened is that the current Nasdaq100 has increased its energy - I'll admit without knowing all the causes of the cycles it might sound a little bit far-fetched - below is a screen grab of a website from 5 or so years ago - the DATES aren't exact to my cycles but you can get the picture and someone else is confirming the UP/DOWN sequence too - the sequence is: 

1899-1915 / 1915-1932, 1932-1949, 1949-1966, 1966,1982, 1982-2000, 2000-2016, 2016-2034

 

The markets have for the past 228 years followed cycle expectation - I don't see them moving away from it ever - You just have to look at the markets in the right context which I admit very few people do - But when you understand the cycle and its internals, puts everything into perspective

My estimation of this cycle is that plunges will only be corrections with the emphasis upwards - for the USA markets

I first became aware of cycles in 2010, had perfected them by 2012 and since 2012 the market has been virtually spot on

It's up to every trader out there as to how they view data, the markets and form their expectations - for me cycles tell me what to expect for the coming years, which for me has worked the best of all the methods I've researched and used to Trade/Invest

Obviously I don't have a crystal ball, but I'll be very surprised if the low of 4th November 2016 in the Nasdaq100 is exceeded before 2034 (the low that kicks off the 15-19 year UP cycle has never been hit during the UP cycle phase in 228 years) always a 1st time for everything but probability says it's very low to happen

 

 

 

[dmedin]

3 hours ago, THT said:

Absolutely - I view things a bit differently to others which for me makes 100% sense of the markets, so periods of "irrationality" for me can easily be explained.

Elliott Wave in 1999 published "Conquer the Crash" - the emphasis was on a deflating economy (USA) in the true sense of credit deflation for their expected ultra massive stock market crash they expected in 2000 - Low Int rates and QE were touted as possible weapons to be deployed - EW were though touting the end of the world stock market wise, that did not happen, but the Fed did launch the deflationary missiles - which they will say saved the markets

How I look at this differently covers a couple of aspects - some of which I'm not expanding on:

1. Interest Rates just as the Stock Market work out in cycles - The last time Int Rates were low was 1930-1951 - this was a period of 21 years give or take, the 2000 crash  brought low but not ultra low Int rates which have remained as per the 1930-51 period, the 21 years are up next year, so IF rates return to normality after that the cycle is tracking that of the 1930-51 cycle - We shall have to wait to see if that happens or not
2. I don't agree with the markets not working normally - For me they are doing exactly what is expected - The Stock Market follows a 15-19 year cycle, I know this for a fact as I've plotted it since the Dow came into trading in May 1792, the cycle is UP then DOWN/FLAT sequence then UP again etc- just as in 1929 the DOWN/FLAT cycle was due so was the same repeat in 2000 (hence a possible cause for the current QE/Int Rate cycle) - These UP/DOWN sequences link in with periods of stock market, credit and wealth Inflation followed by deflation in those items, how much the stock market declines is depending on where the cycle is - there's a Fibonacci calculation to determine this but it's not something I'm disclosing - It's the reason WHY the stock market crash of 1929 looks very similar to the 2000 crash - you have to look at and work with the speculators market at the time, in 1929 it was the DOW, now its the Nasdaq100

Now for the past 10 years I'm 100% convinced that the stock market follows that 15-19 year cycle sequence - I've done enough research to satisfy myself - All that has happened is that the current Nasdaq100 has increased its energy - I'll admit without knowing all the causes of the cycles it might sound a little bit far-fetched - below is a screen grab of a website from 5 or so years ago - the DATES aren't exact to my cycles but you can get the picture and someone else is confirming the UP/DOWN sequence too - the sequence is: 

1899-1915 / 1915-1932, 1932-1949, 1949-1966, 1966,1982, 1982-2000, 2000-2016, 2016-2034

 

The markets have for the past 228 years followed cycle expectation - I don't see them moving away from it ever - You just have to look at the markets in the right context which I admit very few people do - But when you understand the cycle and its internals, puts everything into perspective

My estimation of this cycle is that plunges will only be corrections with the emphasis upwards - for the USA markets

I first became aware of cycles in 2010, had perfected them by 2012 and since 2012 the market has been virtually spot on

It's up to every trader out there as to how they view data, the markets and form their expectations - for me cycles tell me what to expect for the coming years, which for me has worked the best of all the methods I've researched and used to Trade/Invest

Obviously I don't have a crystal ball, but I'll be very surprised if the low of 4th November 2016 in the Nasdaq100 is exceeded before 2034 (the low that kicks off the 15-19 year UP cycle has never been hit during the UP cycle phase in 228 years) always a 1st time for everything but probability says it's very low to happen

 

 

 

 

 

That's great!

 

[RANZ]

4 hours ago, THT said:

Absolutely - I view things a bit differently to others which for me makes 100% sense of the markets, so periods of "irrationality" for me can easily be explained.

Elliott Wave in 1999 published "Conquer the Crash" - the emphasis was on a deflating economy (USA) in the true sense of credit deflation for their expected ultra massive stock market crash they expected in 2000 - Low Int rates and QE were touted as possible weapons to be deployed - EW were though touting the end of the world stock market wise, that did not happen, but the Fed did launch the deflationary missiles - which they will say saved the markets

How I look at this differently covers a couple of aspects - some of which I'm not expanding on:

1. Interest Rates just as the Stock Market work out in cycles - The last time Int Rates were low was 1930-1951 - this was a period of 21 years give or take, the 2000 crash  brought low but not ultra low Int rates which have remained as per the 1930-51 period, the 21 years are up next year, so IF rates return to normality after that the cycle is tracking that of the 1930-51 cycle - We shall have to wait to see if that happens or not
2. I don't agree with the markets not working normally - For me they are doing exactly what is expected - The Stock Market follows a 15-19 year cycle, I know this for a fact as I've plotted it since the Dow came into trading in May 1792, the cycle is UP then DOWN/FLAT sequence then UP again etc- just as in 1929 the DOWN/FLAT cycle was due so was the same repeat in 2000 (hence a possible cause for the current QE/Int Rate cycle) - These UP/DOWN sequences link in with periods of stock market, credit and wealth Inflation followed by deflation in those items, how much the stock market declines is depending on where the cycle is - there's a Fibonacci calculation to determine this but it's not something I'm disclosing - It's the reason WHY the stock market crash of 1929 looks very similar to the 2000 crash - you have to look at and work with the speculators market at the time, in 1929 it was the DOW, now its the Nasdaq100

Now for the past 10 years I'm 100% convinced that the stock market follows that 15-19 year cycle sequence - I've done enough research to satisfy myself - All that has happened is that the current Nasdaq100 has increased its energy - I'll admit without knowing all the causes of the cycles it might sound a little bit far-fetched - below is a screen grab of a website from 5 or so years ago - the DATES aren't exact to my cycles but you can get the picture and someone else is confirming the UP/DOWN sequence too - the sequence is: 

1899-1915 / 1915-1932, 1932-1949, 1949-1966, 1966,1982, 1982-2000, 2000-2016, 2016-2034

 

The markets have for the past 228 years followed cycle expectation - I don't see them moving away from it ever - You just have to look at the markets in the right context which I admit very few people do - But when you understand the cycle and its internals, puts everything into perspective

My estimation of this cycle is that plunges will only be corrections with the emphasis upwards - for the USA markets

I first became aware of cycles in 2010, had perfected them by 2012 and since 2012 the market has been virtually spot on

It's up to every trader out there as to how they view data, the markets and form their expectations - for me cycles tell me what to expect for the coming years, which for me has worked the best of all the methods I've researched and used to Trade/Invest

Obviously I don't have a crystal ball, but I'll be very surprised if the low of 4th November 2016 in the Nasdaq100 is exceeded before 2034 (the low that kicks off the 15-19 year UP cycle has never been hit during the UP cycle phase in 228 years) always a 1st time for everything but probability says it's very low to happen

 

 

 

It's great, I was also working on these lines to find the historical patterns and trade according to these patterns, I worked on the following graph to find the patterns: 

 

 

 

 

[THT]

9 hours ago, RANZ said:

It's great, I was also working on these lines to find the historical patterns and trade according to these patterns, I worked on the following graph to find the patterns: 

 

 

 

 

I wrote this to a friend last year:

We entered the UP phase in Dec 2016

The beauty of all this comes once you know the Internals because they just repeat in generic form/shape but specifically in TIME

The plunge of Feb 2020 didn't happen out of the blue - I'd published the date years in advance (see yellow box on the chart below) but more specifically, the plunge is DIRECTLY linked by sequence to the 1987 crash shown above - Markets grow and evolve, but the Time Cycles that are present at every major turn and crash remain the same

If you run the TC shown in the chart below from the 1981 UP start date on the 2nd date/hit it lands directly onto 1987! - In the chart below the Mar 2020 date is the 1st hit - the next time it hits "could" cause another 1987 type event, unless march 2020 was it (there is no way of knowing until it arrives)

I might publish in the future a series on Time Cycles, because once you understand the Internals and big TC's it debunks every economic and Investing theory out there and you understand why the markets do what they do - Elliott Wave have been calling for the mother of all market crashes since 1986! It's not going to happen no matter how much they label and relabel their charts to justify their thinking

EVERY market has it's OWN TC's that determine its growth and decay - So what works for the stock market will not be the exact same numbers for other markets.

Picture the above chart in 3D (I've mentioned that before too) The flat sections are base building - happened in 1897-1915 / 1932-1949 / above 1966-1992 and 2000-2016

In the chart below it refers to a low - that does not mean an all time low, it will be the turning point which creates a swing low - on the chart above the last time this happened was in late 1994 which created a low point and then whoosh

[Kodiak]

They say that stocks take the staircase up and elevator down

Lets see how fast the elevator can go when the time is right?

I guess puts are going to be expensive?

https://sentimentrader.com/blog/massive-surge-in-speculative-trading-again/

 

Edited September 3, 2020 by Kodiak

[THT]

50 minutes ago, Kodiak said:

They say that stocks take the staircase up and elevator down

Lets see how fast the elevator can go when the time is right?

I guess puts are going to be expensive?

https://sentimentrader.com/blog/massive-surge-in-speculative-trading-again/

 

Depends how much it falls PUT option wise whether it's worth while taking the punt - Until I'm proved wrong or my research is proved wrong, EVERY correction/plunge until 2034 should be easily recovered - bear markets like 2000-03 2007-09 should not happen again during this phase (a 1987 type crash should though!) - which throws the odds to the long side for traders/Investors

the market to watch is the Nasdaq100 the rest will do their own thing in a similar fashion

Gary Smith (How I trade for a Living) used a lot of sentiment indicators to trade very successfully in the 90's - it stopped working in the 2000's though, I've never re-looked to see if it's changed since