This Scary Correlation predicts a Stock Market Crash!
My fellow Steemians,
Past performance does not guarantee future results. History never repeats itself, but it rhymes! Those are quotes that are often found in the investment world.
The last action in the markets resembles a lot like the price movement we saw in the markets lately.
Some more experienced investors might recollect the year 1990. That year the Japanese Stock Market formed a top and eventually there was a steady decline that ended in the year 2009. In that period the Japanese economy also was in a deep crisis, where everyone could see what deflation can do to an economy.
Does Wall Street have to prepare for a crash?
According to Jesse Felder, of the Felder Report, says that at this moment there is a strong correlation between the S&P 500 index and the Nikkei Index in the period of 1988-1990 as you can see on the chart above. According to the guys from Nautilus Research the correlation is as high as 98%.
That doesn’t mean that Wall Street is going to be confronted with a crash, but the correlation is impressive.
So, it would be very wise to be a lot more careful in the near future!
Thank you for reading!
https://slimbeleggen.com/trends/angstaanjagende-correlatie-voorspelt-crash/
Interesting, when you look at the shape of the S&P chart it marked out a typical parabolic top with a correction then a bounce which could then lead to a major fall. It could also continue it's parabolic move, but we are more or less out of time now. Even if it goes up a lot further, it will collapse in the other direction very soon.
Does look scary the correlation... Fundamentals are somewhat different though but inflation and valuations are quite scary as well.
Only the future will tell ;-)
sounds like a good case for some physical gold as insurance?
There is one big problem. In 1988-1990 Japan was not facing a coming hyperinflation.
So, the stock market may go up while its crashing.
Further, crashes are more often done by manipulation.
However, the people in the market do indeed set themselves up for the fall.
Do you think a crash would help or hurt crypto currencies?
I think a crash would help crypto's as they would look the safer option and more money would be pouring into them, pushing certain coin values sky high. We live in hope! Lol.