Why The FAANGS+ Are Done And Why It Took So Long To Top
I and many others have been calling for the NASDAQ Comp and especially the NASDQ 100(QQQ’s) to top for a number of months. I especially compared the overvaluation and manic, relentless rise, to both the Nifty 50 in 1972-73 and the Y2K/Internet Bubble in 2000. We now know of the two main factors that contributed to such ridiculous overvaluation and outright hysterical speculation. First, the millenials trading on Robinhood and similar platforms, juiced with the stimulus checks and $600/week extra unemployment bonuses while being home, unemployed, with no sports to gamble on was a good start. Add in the supercharged billions from Softbank buying call options followed by stocks on the same companies to juice the calls and create a viscious upside cycle and you have a derivative induced frenzy never before seen to this extent! I still believe that the FED, Wall Street and the Administration will do everything in their power to keep things together for two more months (ie. the election). That is why I am sticking to my recent prediction that the DJIA will still reach 30,000 by then. I reiterate what I said at the time. While the financial media will be shouting about the All Time High at the round number, the QQQ’s, NASDQ Comp, S&P500 and most other averages will be flashing warning signs by not confirming. The same will be true for breadth and other technical indicators. After an initial break following the election, the final top leading to a massive bear market will start no later than the first trading day of 2021!
Great Analysis Chartsmaster
For now we buy the EFFN Dip
🙂
Yes, DJIA still headed to 30K. QQQ will bounce but NO NEW HIGH!
Great post, Sir Chartsmaster!
From your analysis, it seems you have bought and are holding PSQ?
I have a miniscule position in SRTY, bought at 8.26 on 9/3/20 and holding it, up 6% so far.
Everyone talks a lot about DJI and Nasdaq, yes DJI may post a new all time high, while Nasdaq may give a non-confirmation due to herd mentality bcoz of Robinhood traders, Softbank selling et al
But what’s the analysis about the Russell 1500, Tenters? DJI components are in and out. Nasdaq is a bubble beyond comparison. How about the wider representation of the real economy? Too boring to analyze? 😉
Cheers,
GL
Take a look at Russell 2000 chart for 3 years. It looks like a triple top is likely that would probably coincide with my call for a bear market starting Jan 2,2021.
Thanks, Sir Chartsmaster.
On your point “I still believe that the FED, Wall Street and the Administration will do everything in their power to keep things together for two more months (ie. the election).” … here’s my two cents …
I think “they”, the Trump haters, will bring the markets down heavily and amp up the Covid-19 fear-hype even more to make him look an even bigger failure!
Look at the Cohen book, the disrespectful words used towards soldiers etc. … in politics nothing is a coincidence!
What makes you think they will not pull out the last feather in his cap, the stock market, albeit it is making only the chosen ones richer?
GL
Of course the Dems and the media will continue to keep the states they control in as much of the lockdown as they can, schools, restaurants etc. They don’t control the Treasury whose Sec. and the FED chair head up working group on financial markets. (Plunge Protection Team) Of course the FED is deep state so Powell could try to sabotage things but I don’t think so.