Let's face it, the more people making a certain call in any given market, the less likely it is to occur. While the world is crying for an eminent recession, a stock market crash, and an explosion in the price precious metals, contrarians are searching for the max pain scenario.
For 2020, I see a sideways movement in dollar strength, a coming increase in treasury yields, pressure on precious metals, and tons of upside for stocks.
Why?
Because the world is expecting the opposite to happen.
For the Dow, I pulled a fractal from the 1929 stock market crash and used Fibonacci retracements to find the upside for the market. And as we know history and patterns repeat themselves. I didn't draw a fancy chart. There are no colored candle sticks, buy zones, sell zones, or anything that would entice your mind to put any emotion into this analysis. Which is exactly why it won't get any attention. But those of you who look at this chart with an unbiased mindset, will see that this situation is much more likely than the 40-60% sell off in stocks that the financial news is calling for.
Yes, I am expecting a sizable crash in stocks, but first I expect the markets to be pushed higher, very quickly, to get the middle class back into stocks and out of generational opportunities like gold, silver, Bitcoin, Ethereum[/, and cash.
In my very humble opinion, I think any asset that can be used as capital, currency, or medium of exchange, will have an enormous amount of value over the next 10-20 years compared to today. But first, the 'smart' money needs to shake all the 'dumb' money out of these markets. Push their alternative assets down to support, and entice a bid in a hot stock market making ATHs each week.
King Dollar: In a heavy recession, and potential depression, cash will be the most scarce asset as real estate and stocks are on sale for pennies on the dollar.
The Case for Crypto: At the very least, cryptos are equal to a fiat monetary system. Meaning they are good enough to exchange from peer to peer (for the proven projects). What gives them upside? The market cap of the crypto market is minute compared to the fiat currency market. Plus, some of these cryptos have a supply cap. There are undeniable economic factors in favor of the crypto market over the fiat market long term. It might not be enough to retire you at 30, but things will balance out.
The Case for Precious Metals: After this sickening recession, depression, whatever-you-want-to-call-it hits, people will lose trust in public companies, financial advisors, governments, their own country's currency, and any investment that relies on the success of others. The only safe haven left will be precious metals. Governments will be increasing taxation as the economy tanks to continue to fund their out of wack spending habits. Income, capital gains, and property taxes will all increase dramatically. The only real safe haven investment left will be precious metals. They carry no counter-party risk, are virtually un-taxable, and untraceable. The perfect investment in a high turmoil period where you may or may not have to flee the country. Not a pretty scenario, but always good to keep the worst case in mind.
I am not calling for any specific percentage movement in any market. I am merely trying to put a finger on how capital will ebb and flow. I give my perspective not to be right over others, but to give a fresh look to those who are tired of drinking the 'koolaid.'
Thanks for reading.
Комментарий
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Stocks broke out of this multi-year flag pattern. This is the start to a major extension of this bull market.
The market will crash, it's just a matter of when (and again, and again, and again). I don't mean this in a harsh way but essentially I'm shrugging my shoulders, and here is my summary as to why:
The problem that we run into is that the stock market is difficult to interpret these days, it's largely chaotic and has no bearing on reality. Trading is not necessarily about real tangible things (Although it can be in some cases), it's more-or-less based on automatic trading that determines trading patterns, and does so in a way that is not quite understood (machine learning is programming built by machines). So what does that leave us with?
Well we are left with real economic *things* and this thing we call money.
What are things? Consider them to be price of bread, job quality, production of strategic and manufactured luxury goods, political stability etc.. and that outlook is incredibly poor
What is money? Well it's essentially a receipt of labor (or borrowed labor), and as long as it's considered acceptable, it holds value. Thus debt is both a problem and not a problem (How we collectively define debt as bad or irrelevant matters).
So what's my point? To put it simply, if we maintain resource production (So if that changes dramatically, then we're in for a storm), money doesn't matter and the stock market will continue to just be this automated trading entity that has no real bearing on economic growth. It's not the same as what it was in the Great Depression.
micahjmiller
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In theory, yes, the public markets can be completely controlled by trading algorithms. However, these algorithms also play off of public sentiment and emotion, economic indicators, etc. there is a real economic cycle, I believe, the same way there are seasons in a fiscal year. Summer, fall, winter, spring. Right now I think we are at the ass-end of a summer phase. Fall will come but it will come when people least expect it. And right now it’s all the world can talk about, “when is the next crash?” My answer for that, is it’ll happen when the average joe jumps back in at screaming ATHs and manic news coverage of stock market bullishness like we saw in the dotcom bubble.
I see your points here, but the stock market isn’t totally removed from reality, as human emotion still plays a factor in the buying and selling of securities (for now).
The problem that we run into is that the stock market is difficult to interpret these days, it's largely chaotic and has no bearing on reality. Trading is not necessarily about real tangible things (Although it can be in some cases), it's more-or-less based on automatic trading that determines trading patterns, and does so in a way that is not quite understood (machine learning is programming built by machines). So what does that leave us with?
Well we are left with real economic *things* and this thing we call money.
What are things? Consider them to be price of bread, job quality, production of strategic and manufactured luxury goods, political stability etc.. and that outlook is incredibly poor
What is money? Well it's essentially a receipt of labor (or borrowed labor), and as long as it's considered acceptable, it holds value. Thus debt is both a problem and not a problem (How we collectively define debt as bad or irrelevant matters).
So what's my point? To put it simply, if we maintain resource production (So if that changes dramatically, then we're in for a storm), money doesn't matter and the stock market will continue to just be this automated trading entity that has no real bearing on economic growth. It's not the same as what it was in the Great Depression.