My custom indictor is suggesting we've reached a zombie new high in the general markets and this indicator has reached highs equal to levels near December 2017. My interpretation of this peak is that the market could continue to try to push a bit higher - but overall this level has historically been an extreme overbought level and the markets have typically corrected from these highs.
What next? If you are long this market right now, keep your stops fairly tight and get ready for a violent reversal in the near future. If you are flat, stay that way until we see some type of technical rotation in price. If you are short, you are likely taking a bit of heat on your position and my gut tells me we could see a repeat of November/December 2018 in 2019.
Remember, price dictates what is likely to happen and this rally to the upside in the NQ is technically a NEW HIGH. Thus, the trend is bullish until we see some type of price rotation. I still believe a price rotation will happen before the end of 2019. In fact, I can't believe the markets are in zombie mode for this long.
In your opinion, with your custom indicators, would you say that the rally from October 7 - Nov 4, achieving what it has so fast, would create an equally, or just even similar, reactive crash?
mdx82
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You keep comparing this situation with the one in 2000, when there was not passive investing and fund managers like Vanguard.
People all around the world are putting their money in stock markets through these instruments, so it seems that the party will continue far more.
Brad, you might be losing a good amount of money since October when you predicted a crash.
Now you are predicting a crash by the end of the year... It seems that you haven't learnt the lesson: "The Market Can Remain Irrational Longer Than You Can Remain Solvent"
So stop betting about a reversal and took your measures when it happens otherwise you are going to lose your capital and your credibility in the process.
BradMatheny
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@mdx82, You are correct that the markets rallied since this post. My Custom Market Cap index correctly reflected this upside move as well as my other technical systems.
One of the issues with trying to predict the long-term future is that you have to make predictions about the future that may or may not come true. As I'm not issuing trading signals on TradingView, I don't expect my followers to attempt to take short or intermediate term trades based on my analysis. What I expect is that I provide critical information for my follower to make their own decisions about trading.
Anyone that is having any trouble following my research, please feel free to write a message so I can attempt to reply.