A bit of sanity re: The Stock Market "Plunge"

If we take a look at a little longer perspective we can see where the money printing really ramped up. This is a monthly chart going back to the 60's. The green line is a line I drew as the mean average and I started that line in the 1980's. The last time we hit that line was in 2009 and the dow was roughly 7k. We've been printing money like crazy ever since. If we were to return to the mean today that would take us down to about 12,500.

In the 1930's the dow was at about 100. 80 years later we are at 7k. And then 16 years later at 44k. In no sane world does that even make sense.

We are just coming off a double top so a move to 32k roughly speaking would be a decent support level. A prolonged period between 32 and 34k would form the right shoulder in a head and shoulders pattern and if we break down from there then we are looking at another 10-12k drop down to 20-22k. Although that wouldn't eliminate all of the excess money printing it would get rid of a lot of it.
From there we would still have a ways to go to get back to that mean price target. One way is for the markets to just drop down and get it over with. Another if for that level to hold there and stagnate for years until that upscoping green line finally catches up.

Keep in mind also that from roughly 1932 to 1969 the dow went from 100 to 800 or 900. A 700 point move in 60 years. Of course we were on a gold standard then and weren't just printing money like crazy. Hard to argue that times weren't better back then though. Dr's made house calls and you could pay out of pocket. No insurance existed. Everything was more affordable and people could raise a family on 1 salary.

Fast forward to today and it's really hard to say what the real value of anything is. Everything is a fiction. Entire industries have cropped up to keep that fiction alive. Especially in the housing industry.
Popping the bubble has been long overdue. How much air will Trump let out of the balloon is the real question. If he is serious about getting this country back on track then he 1st has to eliminate the wasted money printing that made Wall Street mega rich.

Young traders today don't remember what a real correction or bear market looks like. The Fed/PPT have done all they can to backstop stocks and keep the wealth illusion going.

People Do Not like losing money. Even if they watched it go up that whole way they think they were geniuses and earned it. As soon as it slips back away they start to freak out. So 20% down is a big deal. The very rich and very seasoned traders behind my broker, Tastyworks, were starting to freak out this afternoon.

As we say, buy the dips...

Or sell the rips.

Unca Walt said:

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Thanks Unca, it is always helpful to put things in perspective.
Re silver, Rick Rule would say, 20% corrections are normal within bull markets. (But the speed was unusual)

@Cigarlover, that chart is scary.
A liquidity crash could lead to exchanges closed, trading suspended etc., just scary.

T calls for 90 day tariff pause = 2K upswing DJI. Will it last?

I sort of get what Trump is doing and getting the rest of the world to the negotiating table is good for the US. However these daily announcements are insane. Yesterday we were pausing but then we weren't pausing and today we are pausing. It's not healthy for the markets nor for the population at large.
From what I read the pause does not include China and 125% tariffs were put on China. China says they won't back down so have to wait and see who blinks 1st. China could retaliate with tariffs or by dumping treasuries. If they dumped T bills then rates skyrocket. 8% or higher is very possible. Will the fed step in and buy everything? I think they would have to to avoid a depression.

I haven't bought or sold anything so far this year. TLT is on my radar though but with all the volatility I'm just watching. So far for me this year my account is down 103 dollars after all of this. LOL.

Peter89 said:

Thanks Unca, it is always helpful to put things in perspective.
Re silver, Rick Rule would say, 20% corrections are normal within bull markets. (But the speed was unusual)

@Cigarlover, that chart is scary.
A liquidity crash could lead to exchanges closed, trading suspended etc., just scary.

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It is insane how extended everything is. Money printing is the only thing keeping everything going. From the sounds of it the money printing isn't going to stop anytime soon. The budget they went to pass increases US debt by another 5 trillion

-1700 now

Cigarlover said:

I sort of get what Trump is doing and getting the rest of the world to the negotiating table is good for the US. However these daily announcements are insane. Yesterday we were pausing but then we weren't pausing and today we are pausing. It's not healthy for the markets nor for the population at large.
From what I read the pause does not include China and 125% tariffs were put on China. China says they won't back down so have to wait and see who blinks 1st. China could retaliate with tariffs or by dumping treasuries. If they dumped T bills then rates skyrocket. 8% or higher is very possible. Will the fed step in and buy everything? I think they would have to to avoid a depression.

I haven't bought or sold anything so far this year. TLT is on my radar though but with all the volatility I'm just watching. So far for me this year my account is down 103 dollars after all of this. LOL.

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I hear ya.

But there have been some countries that have already gotten back in line, with the leaders changing their stance from telling Trump to piss off, to smiling and shaking hands with him while doing what Trump fargin told him to do.

And Rome was not built in a day.

As far as the market: We are in for it one way or another. One way is an enormous enema. The other way is to go on like we are... and die.

The enema: Anyone who gives ten minutes of their time realizes the market is computer-game crapola with inflated, hollow, empty, "numbers".

My guess is that if the USD and our lifestyle is to survive, the market fluffinflation must go -- and that looks like 50% to me. It is that or NOTGELD and all the inevitable disaster that NOTGELD means:

Voodoo said:

People Do Not like losing money. Even if they watched it go up that whole way they think they were geniuses and earned it. As soon as it slips back away they start to freak out. So 20% down is a big deal. The very rich and very seasoned traders behind my broker, Tastyworks, were starting to freak out this afternoon.

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But they haven't lost much. Compared to crashes as historic as 1929, as malaisical as 1972-83; as out-of-the-blue as the GFC crash of 2009...this was just, not even a correction.

The REAL problem here is that YUUGE swaths of our population have been mind-controlled into semisentient zombification. Look at how quickly they clicked on the BURN-TESLAS switch. How quickly they turned on the STAND-FOR-YOU-CRANE switch.

Fifth-Generation Warfare at work. The only way to counter it is personal - kill your television, ignore your phone screen, careful what you see on your Web portal.

But for us, now, it indicates two things. Whoever controls the switch or trigger, wants Trump violently out. And they want more QE-Infinity and ZIRP, to blow more stawk bubbles and fund more malinvestment. With maybe a few lucrative NGO startups, to boot.

Facts, regarding the DOW correction...don't even suggest a problem. Of which there is one, but the stonk market is completely detached from fundamentals, now.