I think we will see a moderate correction here soon, within weeks. This may be caused by TSLAs overvaluation and disappointing earnings. This correction could last a few weeks, maybe a month. Then we will absolutely rocket ship up to more new ATHs on insane stim, lower rates, QE infinity, and the true euphoric phase of the market begins. Market crashes always happen when rates rise. Whether the fed raises them due to a decision or because they have to, the dot com and 2k8 crashes happened right as the fed raised rates, and this one will be no different.
Rates will rise when we get inflation. We won't get inflation until enough people are vaccinated that life resume to a pre-pandemic normal, and money velocity increases rapidly. This will probably be a sigmoid curve -- slow at first, then rapidly rising, then a taper to a plateau. Once money velocity increases, so does real inflation (even by the fed's rigged BS CPI). Once inflation rises, real rates (bonds, treasuries) increase, and the fed too must increase. This will finally pop the 2020s bubble. It completely depends on when vaccinations are high enough to reach herd immunity in the US and Europe, which is predicted by Fauci to be fall of 2021. So somewhere between August of 2021 and January of 2022 is when the bubble should finally pop. We got a long ways to go up, and many more months of euphoria! But first, a nice little correction most likely.
In the event we don't correct within the next handful of weeks, I guess the market will go full Weimar. That would break the longstanding bearish divergence on weekly RSI (which preceded the 2k and 2k8 crashes). I just don't see it happening. But if it does, so help us God...
Rates will rise when we get inflation. We won't get inflation until enough people are vaccinated that life resume to a pre-pandemic normal, and money velocity increases rapidly. This will probably be a sigmoid curve -- slow at first, then rapidly rising, then a taper to a plateau. Once money velocity increases, so does real inflation (even by the fed's rigged BS CPI). Once inflation rises, real rates (bonds, treasuries) increase, and the fed too must increase. This will finally pop the 2020s bubble. It completely depends on when vaccinations are high enough to reach herd immunity in the US and Europe, which is predicted by Fauci to be fall of 2021. So somewhere between August of 2021 and January of 2022 is when the bubble should finally pop. We got a long ways to go up, and many more months of euphoria! But first, a nice little correction most likely.
In the event we don't correct within the next handful of weeks, I guess the market will go full Weimar. That would break the longstanding bearish divergence on weekly RSI (which preceded the 2k and 2k8 crashes). I just don't see it happening. But if it does, so help us God...
Comment:
The chart arrows are guesses of course, but depict a 10% drop soon, and a 30% rally after that. Then a 66% crash to the bottom of the megaphone over 2-3 years.