Cryptos are in a Bubble?...how about the wall street bubble!

in #cryptocurrency6 years ago (edited)

Pundits, financial gurus like Warren Buffet, Banking mobsters like Jamie Dimon and everyone and their dog seems to have been throwing the term "bubble" around to describe the crypto market for the past year or so.

Well I'd like to return the favor to these charlatans and call them out on their own bubble that a lot of people have their retirement money invested in through 401k's (people like me who often have very limited investment choices in these tax deferred plans).

I came across an interesting headlines / story in USA Today posing the question "Are Stocks going too High too Fast"?

https://www.usatoday.com/story/money/markets/2018/01/16/401-k-investors-dow-26-000-sign-stocks-getting-risky/1035610001/

Duh. Hell yes they are. Let's have a look at the performance shall we?

From the article, Dow Jones industrial average's more than 1,000-point rise from 25,000 to "26K" in the past seven trading days has some investment pros warning that the nearly nine-year-old bull market may be entering its "euphoria phase" — which typically marks the final stage of a long, upward climb for stocks.

4% in seven days is quite a gain in a broad index like that.

But wait, there's more! On to the charts!

The S&P 500 has been rumored by some to be ripe for the shorting or buying of put options, or so people have been saying for a few years now. Those poor folks who took the positions got squeezed like their heads are in a vice. Look at the past four months on the SPX (S&P 500 index)

spx daily.JPG

chart source: http://stockcharts.com/h-sc/ui

Since August 21 when we had a brief dip to 2425 on the SPX, it's gone to 2800. That's a 15.4% return in just 5 months and if it were to continue in this fashion we'd see it hit an annual return (August 2017-August 2018) of 37%.

  • The RSI on the daily is at 81 which is very high for an index
  • MACD is in very positive territory

If you want to know what the MACD is imma hit ya with some knowledge courtesy of investopedia.

https://www.investopedia.com/terms/m/macd.asp

And here's the weekly chart (each candle represents a week of price action) over a two year period in which we've seen a 55% increase in the SPX from 1800 to 2800. Astounding for a "safe but moderately aggressive" investment, right?

weekly.JPG

chart source: http://stockcharts.com/h-sc/ui chart set on weekly and refreshed

  • Look at the RSI! It is absolutely COOKED at a whopping 88!
  • The 50 MA is $326 higher (at 2488) than the 200 MA which is at 2161. When the 50MA is above the 200MA it's considered bullish and I won't even bother trying to find the last time the 200MA>50MA on the weekly time frame. It's been YEARS.

And there's the much longer term trends which show more of the same. Since 2009 the SPX went from under 700 to 2800 in 9 years. Sound like a bit much? I think so.

10 YR RV.JPG

  • That's a 300% return in 9 years and if my math is correct that's a 16.7% annualized return year after year for almost a decade.
  • RSI on the MONTHLY chart is at 87. Look at the chart a!nd tell me when the last time it broke well above 80 is. You can't see it in the past 10 years! Hasn't happened according to this chart

So when's the last time the SPX RSI was in the 80's? 1998 (ahh the dotcom bubble) and a year or two after that RSI was in the 80's the SPX dropped 50% from September 2000 to September 2002.

25.JPG

So I ask these chumps who keep hating on cryptos who's in a bubble now? I thought the average return on the broader indices was supposed to be 5-10% annually over a period of years (shooting from the hip I think the actual expected number is 7% annual growth).

The article claims we're entering the "irrational exuberance" phase of an aging bull market and I couldn't agree more. But I also wanted to hit back at these fools who keep the FUD going and are hurting and scaring new crypto investors on purpose for their own selfish ends and I think I've about exhausted myself in doing so.

So next time someone says crypto is a joke and a bubble just because of its meteoric rise, just think about the supposedly legitimate and large scale Index the S&P 500 and its performance.

Wall street, mainstream media--we know your games and we're tired of them. Cease and desist from the hating on cryptos until you even know what the hell you're talking about and you go back to operating in an honest and transparent manner.

Go back to your large scale corrupt stock market that's moved this way due to ridiculous monetary policy, the repeal of Glass-Steagall Act of 1933 in the late 90's and the casino that the stock market has become.

The repeal of Glass-Steagall was part of what enabled all of this market craziness and if you'd like to learn more about it here's a good basic starting point https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall:_aftermath_of_repeal

Have a great day and for the love of God never stop learning and always question the status quo.

--The Cryptokeepr

DISCLAIMER: This is not financial advice and is my opinion only. Never invest in anything you're not prepared to lose some, most, or even all of. I am not liable for your losses. Always do your own research before buying and if you're new to this game I'd highly recommend consulting a financial professional in whatever sector you're itching to buy into.

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good one @cryptokeepr more people need to see the light!!!

i posted a similar one 13 days ago: Dow Jones vs Cryptocurrency Market

let's keep it on going! because tradit markets got more tools to FUD us / cryptos!

Fantastic analysis. keep it up ♥ following you

I am no expert at all but me and a couple of colleagues were discussing this exact same thing the day before yesterday
I will have to show them this post with a great analysis

Well thanks for wanting to share it. I've thought like many others we've been due a 25% + correction for a few years now. The chart screams irrational exuberance and this could go further yet and faster but it's going to decline abruptly and sharply in the near to mid term.

most likely and so many people will get hurt by it I fear

Great article !! So much info and great analysis ! Thank youu for sharing it with us

Waiting for the bubble to burst ... Come on, do it - that i can sleep well again knowing it finally happened.

It's been coming and is overdue. The market can stay irrational for irrational periods of time though. But it'll happen.

Buffett dont need to no anything about tech or blockchain to know with almost certainty that cryptocurrencies will come to a bad ending. for the simple fact they have gone up to fast. buffett is too old too wise and to clever to be dismissed as some old Dinosaur who dont get blockchain. you can talk about dotcom that he not understand that and missed out but look at the companies that survived probably only 2% and the ones that did survive im pretty sure still lost 90% of there value and took years to recover. This guy is the yoda of the financial markets. Also pay close attention to those corrupt stock markets. because when they have a dip so will all cryptos.

If you're saying he made the claim it will have a significant pullback, that's true. I respect Buffet as his success speaks for itself.

I just think when he said crypto is near certainly doomed to fail that's an uninformed statement. If we went with that logic then none of us would have much reason to be here, especially those buying thouasands worth of STEEM and more. I have faith in it and my own money in it and other cryptos. And it (STEEM) already served me well--about four six fold on my investment here so far plus dividends (curation rewards.

This guys are trying to save their S, that´s why they are so afraid of crypto and it´s very smart from them to criticise the volatility that is super obvious in the crypto markets, but also present in almost every single market, that´s why I love economics, everything is unpredictable and unnexpected...

Yes, it's getting predictable and is one of many nice tools to have as a buy signal a few days after something negative--much of which is exaggerated. I think a lot of bankers are getting in Ripple right now. I started getting in around $0.20 and bought up to $1.8 and I'm pretty bullish on it even though it's centralized and the banks are involved. They do have money though so I'm betting XRP gonna do pretty well.

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Wall street is in a bubble and shit scam contract.

Hey thanks for the knowledge. I hear ever so often from people who work in the fiat stock market, that crypto is a bubble.. and I always say to them, it ain't any different than fiat.

Hopefully it doesn't come crashing down tho, cuz that could be bad for everyone obviously.

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