Weekend Update: DJI 1987 Progress, GANN Jan 27 and Bitcoin Forecast 17/15/20/14/30/20….
Dow Jones Industrial and Bitcoin
Over the last couple of weeks, I have been researching the 1980’s period and there are a lot of similarities between the 1970-1987 and 2000-2018 period. At least, for the stock market.
“Rising bond yields. Full employment. Fed tightening. Trade frictions. Weak dollar. Rising twin deficits, spurred by tax reform. Sound familiar? It should. This was 1987. Start rebalancing.” Full article here.
Let’s start with the conclusion and then I will explain how I got there.
During the week, I will share my analysis and trading ideas on this page: Chart of the Day!
Scroll down for the Weekend Update!
Conclusion – DJI Weekly Chart – 1987 vs 2018 period – Conclusion: Green or Red Scenario
In both scenarios, the green or red, we should expect a period of more volatility and weakness in equities.
The green scenario assumes a drop of 5%-10% and then another parabolic move up to Dow 30k.
The red scenario assumes a re-run of the 1987 crash is next.
Green Scenario – Daily Chart – Drop of 10%, then new parabolic move up into 2019
In 1986 we had the Reagan Tax Break, stocks topped a year later.
In 2016 we had the Trump Tax promise, and the bill was signed JAN 2018. So topping out a year after the Tax break would point to Q1/Q2 2019, a high for the 2nd parabolic move up of the green pattern.
Red Pattern – This fractal analysis assumes that the 1987 period matches the current 2018 period and a crash is next
Red Pattern 2018 = 1987
So, now what?
Both patterns seem valid to me and what they have in common is that for both patterns, a drop of 10% next should be next.
After that corrective wave, the red pattern says: CRASH and the Green pattern says: PARABOLIC UP.
But no need to worry about a crash or not, as for both outcomes, a corrective pattern of 10% (abc) should come first.
Once that has formed, it’s time for either call options or (more) put options.
GANN – Annual Forecast – 2019 High Stock prices – 2020 Panic Cycle –> Favors Green Scenario –> Crash not in 2018 but > Q1 2019 – 2020 period
Bitcoin Daily and Weekly Charts
I noticed that the latest correction had the same pattern (fractal) as the early 2017 correction.
So if we assume that history could repeat, it would lead to the following forecast: 17-15-20-14-30-20.
I have 70% of my crypto assets secured through my ledger nano s. The other 30%, I trade at Plus500: low spread, guaranteed stop loss and leverage of 5 is possible.
During the week, I will share my Bitcoin ideas and trades on this page: Chart of the Day!
Also, check out this analysis: