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As you all know, I am a stock market analyst and in studying a lot of trends, seasonal tendencies, overbought conditions, and news, I believe the stock market will top out either this week or at the latest next.
Since 2008, the market has been in a bull trend that has caused the NASDAQ to rally from 1265 to last week's high of 11730. During this period of time and not counting the first rally from the low made in 2009, the index has has 2 big corrections within the bull market. In this, I am not counting the correction seen because of the virus, only counting the normal corrections seen in a normal bull market. One of the things that has happened for many years (not just the last 10) is a seasonal tendency to correct between mid September to end of October. For instance, in the last 10 years, there has been a correction 9 seen those years that started in September. The corrections have varied from a low of only 5% to a high of 25%. Nonetheless, during the last 10 years, the big corrections (2 of them) have occurred after the index had almost doubled in price.
From 2012 to 2015 and over a period of 35 months, the index appreciated in value 91.8% and then a correction of 19.5% occurred. In 2016, the index rallied for 30 months and appreciated in value 93.2% and then a correction of 24.5% occurred. On this occasion, the Index has rallied 89.4% through Friday and it has been 20 months since the last correction. I do expect the index to rally more this week but a rally of only 2.8% will put it at the same rally level as seen in 2012-2015 and a rally of 3.8% will put it at the same level that is rallied in 2015-2018 and from which those big corrections occurred.
As such and likely beginning the Labor Day week, I expect the indexes will begin a correction and it is likely to be somewhere between 19.5 and 24.5% going into the end of October and just a week before the election occurs.
As such, the Democrats will be able to use the drop in stock prices as ammunition against Trump and Trump will not be able to counter that event all that successfully. It will be an additional tool (though somewhat of a minor one) to use against Trump.
Trump has used the Stock Market as one of the tools to convince people of how good the economy is.
Since 2008, the market has been in a bull trend that has caused the NASDAQ to rally from 1265 to last week's high of 11730. During this period of time and not counting the first rally from the low made in 2009, the index has has 2 big corrections within the bull market. In this, I am not counting the correction seen because of the virus, only counting the normal corrections seen in a normal bull market. One of the things that has happened for many years (not just the last 10) is a seasonal tendency to correct between mid September to end of October. For instance, in the last 10 years, there has been a correction 9 seen those years that started in September. The corrections have varied from a low of only 5% to a high of 25%. Nonetheless, during the last 10 years, the big corrections (2 of them) have occurred after the index had almost doubled in price.
From 2012 to 2015 and over a period of 35 months, the index appreciated in value 91.8% and then a correction of 19.5% occurred. In 2016, the index rallied for 30 months and appreciated in value 93.2% and then a correction of 24.5% occurred. On this occasion, the Index has rallied 89.4% through Friday and it has been 20 months since the last correction. I do expect the index to rally more this week but a rally of only 2.8% will put it at the same rally level as seen in 2012-2015 and a rally of 3.8% will put it at the same level that is rallied in 2015-2018 and from which those big corrections occurred.
As such and likely beginning the Labor Day week, I expect the indexes will begin a correction and it is likely to be somewhere between 19.5 and 24.5% going into the end of October and just a week before the election occurs.
As such, the Democrats will be able to use the drop in stock prices as ammunition against Trump and Trump will not be able to counter that event all that successfully. It will be an additional tool (though somewhat of a minor one) to use against Trump.
Trump has used the Stock Market as one of the tools to convince people of how good the economy is.
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