- In 2015 China had a retail boom-bust 🔥
- It did not take long for retail to find out who
was going to hold that bag 💰
- Covid, tech, and monetary policy in the US have conspired
to create another retail frenzy ⛈
- I attempt to overlay 2015's fundamentals, technicals, and psychology
to the current scenario 🏹
- Just a little observation and thought-experiment 💚
- Have fun out there!
someone is going to find that top 😬
- It did not take long for retail to find out who
was going to hold that bag 💰
- Covid, tech, and monetary policy in the US have conspired
to create another retail frenzy ⛈
- I attempt to overlay 2015's fundamentals, technicals, and psychology
to the current scenario 🏹
- Just a little observation and thought-experiment 💚
- Have fun out there!
someone is going to find that top 😬
Comment:
*monetary policy on the graph, not financial policy 😑 o*ps
Comment:
1.) Begin Graphing Scale at 2014, mid-Nov
~~~~~~~~~~~~
- period of China's retail boom-bust
- boom: 7-month period
- bust: 2-month period
- duplicated and overlayed after Covid 2nd bounce which illustrated relative market strength
- Covid stimulus has allowed this to continue but as we near the end of stimulus money it will
be interesting to see how much higher SPY can go before people beginning taking profits
- Because none of these profits have compounded there is a higher likelihood of mass exodus
as we saw with crypto
~~~~~~~~~~~~
U.S.
boom: currently at 18-months
- we can see at the end of the first retail cycle (7-months) there was selling pressure from Sep-Nov
as Covid-19 guidance was mixed
- - From WHO timeline:
- September 1 — US Rejects WHO Global COVID-19 Vaccine Effort: The United States says it will not participate in an initiative
by the WHO to develop, make, and distribute a COVID-19 vaccine
- September 8 — AstraZeneca Halts Phase 3 Vaccine Trial over safety concerns
- September 14 — Pfizer, BioNTech Expand Phase 3 Trial
- September 15 — A study published in Morbidity and Mortality Weekly Report finds that people who recently tested positive for
COVID-19 were 2.4 times more likely to have dined out.
- September 17 — Europe Reports Rising COVID-19 Cases
- September 23 — A New, More Contagious Strain of COVID-19 Is Discovered
- October 2 — Trump, First Lady Test Positive for COVID-19; Trump Enters Hospital
- October 5 — Trump leaves hospital
- October 8 — White House COVID-19 Outbreak Grows to 34
- October 12 — Johnson & Johnson Halts Vaccine Trial
- October 19 — Global Cases Top 40 Million
- October 22 — FDA Approves Remdesivir as First COVID-19 Drug
- October 23 — AstraZeneca and Johnson & Johnson Announce Restart of COVID-19 Vaccine Trials
- November 4 — US Reports Unprecedented 100,000 Cases in 1 Day
- November 18 — Pfizer, BioNTech Vaccine Is 95% Effective
- most of the news is positive from here, and most bad news is non-life-threatening
for younger and healthier populations from this point on
- also of note:
- - the HEROES ACT (signed in MAY 2020 by the House) was left in limbo
while debate between Democrats and President Trump continued
until the President signed a compromised appropriations bill
in December
~~~~~~~~~~~~
- period of China's retail boom-bust
- boom: 7-month period
- bust: 2-month period
- duplicated and overlayed after Covid 2nd bounce which illustrated relative market strength
- Covid stimulus has allowed this to continue but as we near the end of stimulus money it will
be interesting to see how much higher SPY can go before people beginning taking profits
- Because none of these profits have compounded there is a higher likelihood of mass exodus
as we saw with crypto
~~~~~~~~~~~~
U.S.
boom: currently at 18-months
- we can see at the end of the first retail cycle (7-months) there was selling pressure from Sep-Nov
as Covid-19 guidance was mixed
- - From WHO timeline:
- September 1 — US Rejects WHO Global COVID-19 Vaccine Effort: The United States says it will not participate in an initiative
by the WHO to develop, make, and distribute a COVID-19 vaccine
- September 8 — AstraZeneca Halts Phase 3 Vaccine Trial over safety concerns
- September 14 — Pfizer, BioNTech Expand Phase 3 Trial
- September 15 — A study published in Morbidity and Mortality Weekly Report finds that people who recently tested positive for
COVID-19 were 2.4 times more likely to have dined out.
- September 17 — Europe Reports Rising COVID-19 Cases
- September 23 — A New, More Contagious Strain of COVID-19 Is Discovered
- October 2 — Trump, First Lady Test Positive for COVID-19; Trump Enters Hospital
- October 5 — Trump leaves hospital
- October 8 — White House COVID-19 Outbreak Grows to 34
- October 12 — Johnson & Johnson Halts Vaccine Trial
- October 19 — Global Cases Top 40 Million
- October 22 — FDA Approves Remdesivir as First COVID-19 Drug
- October 23 — AstraZeneca and Johnson & Johnson Announce Restart of COVID-19 Vaccine Trials
- November 4 — US Reports Unprecedented 100,000 Cases in 1 Day
- November 18 — Pfizer, BioNTech Vaccine Is 95% Effective
- most of the news is positive from here, and most bad news is non-life-threatening
for younger and healthier populations from this point on
- also of note:
- - the HEROES ACT (signed in MAY 2020 by the House) was left in limbo
while debate between Democrats and President Trump continued
until the President signed a compromised appropriations bill
in December
Comment:
2.)
~~~
after all has been taken into consideration, I am just
looking to find the top as everyone else.If we overlay
the Chinese retail boom-bust and take into consideration
other factors such as inflation, housing issues, employment
#s, potential time-of-year (winter), expected end of stimulus checks,
and recent news citing that 4 out of 10 Americans say their
income is below pre-pandemic levels:
( www. cbsnews.com/news/fourth-stimulus-
check-update-2021-08-04/ ) ,
we can see if there is not a 4th wave of stimulus the top of
the market may come soon enough
~~~ the projected overlay is a 7:2 ratio x3
- 7 months of upward momentum
- 2 months of downward momentum
- equaling 21 projected upward months
- and 6 projected downward months
- - these are based on the most recent Chinese statistics
of their 2015 boom-bust cycle which left many retail traders
holding the bag
- I believe the end of the 1st 7-month period overlayed
on the SPY shows a similar bust pattern that has been buyoed
by US financial policy. This has allowed retail traders the chance
to become heavily invested in the market, chasing ATHs.
- Again, because this runup has not materialized into anything
but paper profits and there is a high level of non-compounded
money running around, there is a high risk of mass exits whenever
things take a heavy dip.
- Fed policy will probably try to hold this up, but it can only
do so much in a no-interest rate world
~~~
after all has been taken into consideration, I am just
looking to find the top as everyone else.If we overlay
the Chinese retail boom-bust and take into consideration
other factors such as inflation, housing issues, employment
#s, potential time-of-year (winter), expected end of stimulus checks,
and recent news citing that 4 out of 10 Americans say their
income is below pre-pandemic levels:
( www. cbsnews.com/news/fourth-stimulus-
check-update-2021-08-04/ ) ,
we can see if there is not a 4th wave of stimulus the top of
the market may come soon enough
~~~ the projected overlay is a 7:2 ratio x3
- 7 months of upward momentum
- 2 months of downward momentum
- equaling 21 projected upward months
- and 6 projected downward months
- - these are based on the most recent Chinese statistics
of their 2015 boom-bust cycle which left many retail traders
holding the bag
- I believe the end of the 1st 7-month period overlayed
on the SPY shows a similar bust pattern that has been buyoed
by US financial policy. This has allowed retail traders the chance
to become heavily invested in the market, chasing ATHs.
- Again, because this runup has not materialized into anything
but paper profits and there is a high level of non-compounded
money running around, there is a high risk of mass exits whenever
things take a heavy dip.
- Fed policy will probably try to hold this up, but it can only
do so much in a no-interest rate world