I overview the weekly and lower time frames with reference to some economic realities. There is a probability of an economic collapse which is not just about America.
A potential collapse of the Wall Street has been 'predicted' by others. I make no predictions as my crystal ball broke a long time ago - and I've had to adapt.
The issue of an inverted yield-curve has come up again. The same heralded the last big crash in 2008 by some 2 to 3 years. This time around with a similar inverted yield-curve, if a crash is coming - I suspect it's gonna be swifter and much deeper in percentage terms. (Emphasis on the word 'if').
Nearly all stock markets are linked up in a global network. The world is now far more electronic and reactive. News travels much faster than in 2008. And now we have to factor in HFTs.
Some very nice points but I am not sure about the correlation of low interest rates and the share markets. The FED doubled interest rates between 1926-28 and the DJIA also doubled & the stock market has never peaked at the same level of interest rates so the data shows there is no correlation between interest rates and the stock market. Interest rates don't peak and bottom with the markets.
I do not think this is a melt-down crash in the equity markets as so many have anticipated. As you mentioned, the central banks only solution is to print more money which is going to lead to increasing asset prices (and punish the working class who cant afford to speculate in the markets). Add in the fact that the confidence in governments is collapsing on a global scale. A lot of capital from bond market is going to shift in equities at some point.
The lack of capital investment in Europe and UK is really worrying...Interesting times ahead.
Captain_Walker
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@Dimolad, To be clear - the picture is complicated. It certainly isn't correlated largely with just with low interest rates or 'any one thing'. The short video is a tight and very incomplete summary of some key issues, whilst keeping it relevant to trading.
The nature of complexity in chaotic systems is about investigating the fabric of all things known to contribute. Linearity of correlations tends to fail miserably in chaotic systems. I'm certainly restricted by 10 min slots and unable to supply on Tradingview's platform the fuller nature of the complexity, as per Chaos Theory - re: non-linear dynamics etc. (This is not a complaint about Tradingview.)
So as to avoid anybody attributing to me something that I didn't say - I am NOT predicting a crash. I wish to repeat that my crystal ball has been broken a long time ago, and totally beyond repair! LOL.
What goes on, on Wall Street - and other markets - is a measure of 'economic health' of financial systems, international trade and geopolitical (dis)harmony. To be even more clear, I am not a financial analyst, guru or fundamental analyst. I simply use a bit of common sense, a) that 'you' can't get something out of nothing - except in fantasy land b) 'you' can't create value out of thin air forever c) digging one's (metaphorical) hole deeper is pretty much a bad idea.
A lot of folk coming new to anyone of my posts on 'economic outlooks' may not have appreciated the depths to which I have dug into the issues. Wall Street is a small dot in the big picture and it is certainly not bigger than the 'world'. Back in late October I went into the 'mother of all indices' (and invited everybody to dig deeper).
The latest picture on the ACWI ain't looking pretty, to me at least.
I'm not here to convince anybody of anything - in anticipation of the usual 'I'm not convinced...' sort of statement. I know what my hard irrefutable evidence is - and it is available to everybody who takes the time to dig deep for well referenced sources in the public domain (unlikely to be found in traditional media). I am cautious not to post links which may fall foul of the 'house rules'. Anybody wishing to learn more can PM me.
But what does human nature tend to do with unpalatable hard evidence?
1. Appeal to authority.
2. Live on hopes and dreams.
3. Avoid reality.
4. Apply ad hominem to bringers of the evidence.
5. Find evidence that supports their hopes, dreams or belief systems - also known as resolution of cognitive dissonance.
(the above are statements of generality applicable in markets and not directed at any one individual)
If there is hard evidence of sound economic health in the US and World economies I invite all to report on it - because I've been unable to find it. Ultimately let's keep it evidence-based.
Dimolad
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Compare the DJIA to any of the European or Asian indices on the monthly charts. US economy is holding the world up right now.
Where else you gonna park your money? European equities, with all the political chaos over there? Asia, with their massive debt crisis? Whose gonna park money in longer-term bonds when the yields are so low? US Equities is the safe haven trade.
Captain_Walker
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@Dimolad, I don't doubt that the US Economy is holding up the world right now. But it's rather crazy if the US and the whole world's economies are built on thin air - the stuff that real and financial bubbles are built on.
"Where else are you gonna park you money?" I addressed this is part here All my publications on Tradingview are limited to 10 mins. So - I've always invited all viewers to do there own deeper research. Look also into the de-dollarisation movement (not just what I say in less than 10 min).
US Equities have indeed been the safe haven. However, US Equities just don't reside in the US. There is a silent cancer eating away at the foundation of that which been seemingly historically, all so reliable. Undisputed I trust, are the facts that world central banks (in the majority) have been printing money like nobody's business. Equities are built on cheap money (re: low interest rates) - hence they have been pumped up on 'air'. Cheap money hatched out of thin air and backed by things of fragile value like international trade, spells big trouble as far as I'm concerned. I mentioned that the problem (as I see it) is complex and runs very deep back into the 1970s. The key way-points are 1930s, 1970s, 2008. Those who neglect to learn from history shall be forced to repeat errors recorded in history.
Get the real facts that big media are not focusing on. I'm afraid all but 'everybody' knows that big media is a 'mind-control machine'. The real owners of 'this country' (as George Carlin - who is/was not a trader or broker used to say), have got everybody under control (he said it in more flowery language). The 'owners of this country' (not just one country) know what's coming. All they're doing is manoeuvring for the least chaotic a 'pop' of the big bubble they've created? Like really - is that even possible? I don't think so. They're buying time to safeguard their own interests.
Images are nice. I'm not impressed by 'beauty that is skin deep'. But I am not 'everybody'. :)
The world is living in a grand delusional economic state. When the current psychotic state of the world's economic systems and heritage meets reality there will be pain! bit.ly/psychosis-reality [Nothing at all is implied or directed at you in person.]
I do not think this is a melt-down crash in the equity markets as so many have anticipated. As you mentioned, the central banks only solution is to print more money which is going to lead to increasing asset prices (and punish the working class who cant afford to speculate in the markets). Add in the fact that the confidence in governments is collapsing on a global scale. A lot of capital from bond market is going to shift in equities at some point.
The lack of capital investment in Europe and UK is really worrying...Interesting times ahead.