It has been an amazing 2020/21 in the markets, stimulus, free money, memes, crypto, NFTs, a 142% Nasdaq 100 rise from March 16, 2020, to Nov 29, 2021.
I have traded through 3 major crashes, 2000, 2007, 2020. I can now hear the gentle popping of bubbles through charts.
How? I have developed indicators and backtested systems with TradingView to tell me when they will happen.
My baby MOSES indicator is backtested to 1918. He gets it right the majority of the time for major crashes. Like all of us, he is not perfect, he was very late in the most volatile crash in history, the COVID crash of 2020.
It is very rare that Moses is late, he usually avoids about 60/70%% of a major crash. Right now Moses has stopped being bullish, he is very quiet.
He has just flagged a catastrophic 7% drop in one week. Moses is a “Donkey on the edge” (See Chart).
A 7% or greater drop in one week is rare, the Covid crash showed two 10% weekly drops.
Hello Darkness My Old Friend.
Step Back And Think. A 142% increase in the Nasdaq 100 in two years. Inflation, supply chain, energy prices, commodities, ongoing pandemic.
Central banks need to increase rates, why? Because we are overheated. The crazy money flowing into Crypto and NFTs is 2000 DOT COM madness. Like our place on this planet, we need to be sustainable. This market is not sustainable. OK now on to the actual technical analysis.
Technical Analysis Notes A master trader once gave me this advice. Plot a green 50 moving average, an amber 100 moving average, and a red 200 moving average. It's like traffic lights, a price above green buy. Below green, close to amber, be cautious. Below amber close to red, put the brakes on. See the chart
On a weekly chart we are below the green 50 week moving average.
On a daily chart, we are below the red 200 day moving average.
RSI is negatively divergence since November 2021
ADR is negative since August 2021
Crash Detection
The green Moses dots at the bottom of the chart show a raging bull market.
No dot signal market transition
Red dot shows major bear market.
Nothing in life is 100% and the market may turn if Darth Powell, spooked by this mini-crash, announces no interest rate increases for another year. I would give this prediction a 75% chance.
But until then, buckle up for a wild ride down.
Kind regards – Liberated Stock Trader – Barry – Bazza to my mates.
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This is not financial advice, it is a hypothesis based on fundamental and technical analysis. I exited the market in November, and was also bearish in December, see attached charts.
ノート
Still holding true so far.
ノート
Target met. Always nice to see a prediction come true. I wish it happened more often. :)