How Low? Bitcoin, Gold and Equities Bubbles in Sync. TZA Chart
It's interesting when there's a correlation in bubbles, especially when they pop.
Below we present a 1-year chart of the bitcon [sic] with a 1-year chart of the DJIA below it for comparison.
We've shifted the DJIA to the left by about a month (noted via the blue line and ovals), so that the January pop in the stocks bubble is lined up with the December pop of the bitcoin bubble (noted by the thick vertical red line in the middle).
The thinner vertical red line on the right draws attention to the fact that for the past month bitcoin prices have dropped significantly, to new lows for the year.
It's very reasonable to expect stocks will also soon post new lows for the year.
And then some.
Here's another set of charts, showing the NASDAQ bust of 2000 on a weekly scale, with the current chart of the S&P 500 in daily scale aligned beneath it. Below those, we've put a gold chart in monthly scale.
Now, does this pattern look familiar?
The purpose is simply to show that all cycles of boom and bust look very similar when charted.
Today the DJIA has posted its third consecutive close below its 200-day moving average for the first time in over two years. Please consider that it's perfectly reasonable to expect all major indexes to drop to at least the respective 200-week moving average.
For the S&P 500 that'd take a 16% drop from its present level. For the NASDAQ that'd take a 25% drop, and a 20% drop for the RUSSELL 2000. For the DJIA an 18% drop.
Such moves would likely result in our levered short positions doubling, or more.
We're not stating that will happen. To do so would be totally irresponsible since no one can know the future.
We do know the past however, and what we are stating is that such moves would be totally normal and unsurprising as evidenced by the charts above.
TZA 2-Year Chart, showing established down trend in green likely soon to be broken:
Below we present a 1-year chart of the bitcon [sic] with a 1-year chart of the DJIA below it for comparison.
We've shifted the DJIA to the left by about a month (noted via the blue line and ovals), so that the January pop in the stocks bubble is lined up with the December pop of the bitcoin bubble (noted by the thick vertical red line in the middle).
The thinner vertical red line on the right draws attention to the fact that for the past month bitcoin prices have dropped significantly, to new lows for the year.
It's very reasonable to expect stocks will also soon post new lows for the year.
And then some.
Here's another set of charts, showing the NASDAQ bust of 2000 on a weekly scale, with the current chart of the S&P 500 in daily scale aligned beneath it. Below those, we've put a gold chart in monthly scale.
Now, does this pattern look familiar?
The purpose is simply to show that all cycles of boom and bust look very similar when charted.
Today the DJIA has posted its third consecutive close below its 200-day moving average for the first time in over two years. Please consider that it's perfectly reasonable to expect all major indexes to drop to at least the respective 200-week moving average.
For the S&P 500 that'd take a 16% drop from its present level. For the NASDAQ that'd take a 25% drop, and a 20% drop for the RUSSELL 2000. For the DJIA an 18% drop.
Such moves would likely result in our levered short positions doubling, or more.
We're not stating that will happen. To do so would be totally irresponsible since no one can know the future.
We do know the past however, and what we are stating is that such moves would be totally normal and unsurprising as evidenced by the charts above.
TZA 2-Year Chart, showing established down trend in green likely soon to be broken:
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posted by C. Guinness @ 3:10 AM
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