There are days in history which will mark turning points in bull and bear markets then there are days which are used as pointers to when economic shifts occur, even if they had been in motion for many months before.
Why did yours truly highlight the futures prices from 4:19 a.m. this morning?
Despite a powerful rally in Japan and Asian markets overnight, these futures prices are half or less of what they were when the Asian markets opened last night. If this trend continues what kind of a dangerous place am I talking about?
This one:
If this market breaks hard, which is entirely possible based on the speculative build up to this point, odds are we will shatter the 5100 mark, opening air gaps all the way to the 4750-4800 range where there is some long term support.
But what is the historical parallel?
It’s a recency bias that everyone uses, including yours truly, to refer to the 2007-2008 markets but this pattern happened in an election where both candidates for the Presidency sucked, nobody was enthusiastic about their choices, and a recession was underway or just about to start despite the silence from the NBER designed to protect the incumbent’s record.
This would parallel roughly what happened last autumn in the current era where investors started doubting the strength of the US economy, then the Powell Put was inserted in November to provide a stick save, eventually leading to a realization he was full of it and an election crash for lack of a better term.
Zooming in on this era, it’s easy to draw a parallel to where we are now in the markets, minus the direct technical and price correlations of course.
If this is correct, another 10-20% will easily be shaved off of the S&P 500 between now and Election Day 2024; if not sooner due to global geopolitical instability.
Stay frosty my friends, the robot’s warnings should not be ignored.
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