So far, the resemblance between the vertical pattern of the DJI 1970-1987 and the current vertical pattern of the DJI is remarkable.
If this pattern keeps aligning, then it looks like the US stock markets are on its way for a rough year.
CHART 1 – Dow Jones Industrial – Monthly Chart – Target 25.800 (check)
This is one of the charts from the previous analysis of the US Markets: Dow Jones Industrial – Party Like It’s 1987 & Why That Is A Positive Thing, in which I showed the similarity in patterns between two, 30 years apart.
Chart 2 – Fresh DJI Monthly Chart – Zoomed in on (7)
The DJI is still following a similar pattern as in 1987, reaching 2nd, (red) resistance area @ 25.800.
In 1987, the Dow briefly ripped above red resistance and then dropped below black support in the next candle.
That could lead to the idea that FEB 2018 = SEP 1987 –> – 8% intra month, – 4% close. The so called Dead Cat Bounce before the real fun for bears begin.
For the short term, I’m very bearish on stocks. So I hedge most of my equity exposure by using short positions at eToro and I bought several put spreads on the Dutch stock market index (AEX). It’s not rewarding yet, in fact, it’s costing me 3.4% total return so far (10% weight in this strategy and a -34% performance = -3.4% contribution to the total portfolio).
Obviously, a negative contribution is not something I like to see, but it’s also not that worrisome (yet). I do realize, that if it does break down to the downside over the next couple of months, then this strategy will pay out, big time, and might even add more than 20% to my total portfolio.
Keep an eye on the 24.800 – 25.000 support area (black trend line FEB 2018).
Trading below poses an imminent risk of a market crash to 20.000.
CHART 3 – LONG TERM DJI PATTERN
DJI Monthly Chart – Main Idea: 1970-2000 = 2000 – 2030
Long term, I will add to stocks when they are 20% to 40% cheaper, for ultimately a Dow of $100.000 in the year 2032, peak of the flight to private assets according to Armstrong.
Start JAN 3 – Investment 0.01 BTC ($150), Withdrawals: $ 0.006 BTC ($90, after fees) since 8 days.
JAN 12 – I have made a request for the 3rd withdrawal limit of 0.0035 BTC, bringing my investment close to break even: a free lunch for the days to come?
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Total Portfolio Strategy 2018
If you want to read more about my Total Investment Strategy, then please read this update first: 2017 Performance and Total Portfolio.
Or read my latest update on the US Markets: Dow Jones Industrial, Party Like It’s 1987!
This is what I will do over the next couple of weeks/months:
- I will add monthly to a mutual fund (worldwide stocks), as I expect stocks to skyrocket into the year 2030, peak of flight to private assets;
- I will add 2% of my assets to buy put spreads AEX Dec 2018, as a hedge for my equity exposure, medium term trade (12-24 months, 2018-2019);
- I will add 7% of my assets to to my 2018-2019 eToro hedge strategy: – Hedge US Stock Market for a 20%-40% crash
- I will contribute small amounts to interesting ICO’s and tokens that pay out a periodic cash flow;
- I decreased my crypto exposure from 20% of total assets to 4% of total assets;
- I will add to my short sovereign bond strategy (rising interest rates) when rates come down a bit into 2018 or if they break key resistance to the upside.
Crypto Rating Desk and our ICO Portfolio of 100
ps. I started a new project, for and by my international students.
We analyze upcoming ICO’s and when we see a project that we like, we contribute. Our latest contribution is LHCrypto, a token that pays out a monthly cash flow, has a working business model and is active in a growth market.
We now have 15 contributions, and our goal is to build a portfolio of 100 tokens that generates a periodic cash flow (Portfolio of 100).
Feel free to follow our ideas: CryptoRatingDesk.com
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