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2008marketcrash

GOLD - Short Squeeze Similar to 2008 ?Hi Traders, Investors and Speculators of the Charts 📈📉 Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year. In today's analysis, let's discuss the recent surge in gold. Have we seen this before or is it dejavu? In light of the recent fears concerning the banking system, gold has been increasing rapidly. Bitcoin follows on it's heels as many investors diversify into crypto. (Please check out related ideas below, I did a comprehensive update on the SVB collapse). Now let's get call it what it is - a short squeeze. A short squeeze is a situation that can occur in the trading of commodities, stocks or other financial assets where investors who have bet against a particular asset (by shorting) are forced to buy back the asset at a higher price than they initially sold it for. This can happen when there is a sudden surge in demand for the asset, causing its price to rise sharply, which then triggers a chain reaction of buying by short sellers who need to cover their positions. To understand how a short squeeze works, let's start with a brief overview of short selling. Short selling is a trading strategy in which investors sell borrowed shares of an asset, hoping to buy them back at a lower price in the future. The idea is to profit from a decline in the asset's price, as the short seller can buy back the shares at a lower price than they sold them for, pocketing the difference as profit. However, short selling is inherently risky, as there is no limit to how much the asset's price can rise. If the price of the asset increases, short sellers may be forced to buy back the shares at a higher price than they sold them for, resulting in a loss. Now, let's assume that a large number of investors have sold a particular asset short, betting that its price will fall. If the asset's price starts to rise instead, these short sellers may start to feel pressure to buy back the shares to cover their positions, as they do not want to incur further losses. As more and more short sellers start to buy back the asset, its price may continue to rise even further, which can create a feedback loop. This, in turn, can trigger more short sellers to buy back the asset, creating a self-reinforcing cycle of buying that can drive the price up even higher. At some point, the short sellers may become desperate to cover their positions, as they fear the asset's price will continue to rise. This can lead to a sudden surge in demand for the asset, which can cause its price to skyrocket. This sudden increase in demand for the asset, driven by short sellers trying to cover their positions, is what is known as a short squeeze. The short sellers are "squeezed" out of their positions, as they are forced to buy back the asset at a higher price than they initially sold it for. A short squeeze can happen after a strong bullish surge because gold is a popular asset for short sellers to bet against. Short sellers often sell gold futures contracts or exchange-traded funds (ETFs) with the expectation that the price of gold will fall, allowing them to buy back the contracts or ETFs at a lower price and pocket the difference as profit. However, if the price of gold starts to rise unexpectedly, these short sellers may become nervous and begin to buy back their positions to limit their losses. As more and more short sellers buy back their positions, this creates additional buying pressure, which can push the price of gold even higher. If the price of gold continues to rise, some short sellers may become desperate to cover their positions, as they fear that the price will continue to increase and their losses will mount. This can lead to a short squeeze, as short sellers compete with each other to buy back gold contracts or ETFs, driving the price even higher. Additionally, a short squeeze in the gold market can be exacerbated by the fact that gold is often seen as a safe-haven asset , particularly during times of economic uncertainty or geopolitical tension. During such periods, demand for gold can surge, leading to a sharp rise in its price. This can create a situation where short sellers are caught off guard and forced to cover their positions at a loss, which in turn can drive the price of gold even higher. One notable example of a short squeeze in the gold market occurred in the early 1980s. In the late 1970s, gold prices had surged due to high inflation, political uncertainty, and a weak US dollar. However, by the early 1980s, inflation had begun to decline and the US dollar had strengthened, leading many investors to believe that gold prices would fall. As a result, a large number of investors began to sell gold short, betting that prices would decline. However, in January 1980, the Soviet Union invaded Afghanistan, leading to a spike in geopolitical tensions and a surge in gold prices. This caused some short sellers to begin buying back gold in order to limit their losses, which in turn led to further price increases. As the short sellers continued to buy back gold, other investors began to take notice and also started buying, leading to a widespread short squeeze that caused gold prices to soar to an all-time high of $850 per ounce in January 1980. This short squeeze ultimately led to significant losses for many investors who had bet against gold, while those who had held long positions in the metal enjoyed substantial profits. During past short squeezes in the gold market, prices have risen significantly, sometimes reaching all-time highs. For example, as I mentioned earlier, in January 1980, gold prices reached an all-time high of $850 per ounce during a short squeeze. Another example occurred during the global financial crisis of 2008-2009, when investors flocked to gold as a safe-haven asset amid market turmoil. In March 2008, gold was trading around $900 per ounce, but by September 2011, it had reached an all-time high of $1,920 per ounce. Can it be possible to see something similar to this over the next few months ? In other words, be careful to short gold at resistance. This is exactly what would seems like a logical scenario after a period of upward trading, but we're trading at ATH's and in uncharted territory, so who can say where the next resistance zone is? It's important to note that short squeezes are unpredictable events and can be influenced by various market conditions and factors. Additionally, historical price movements may not necessarily indicate future price movements. Therefore, it's always important to conduct thorough research and seek professional financial advice before making any investment decisions. _______________________ 📢Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎Hit like & Follow 👍 We thank you for your support ! CryptoCheck
TVC:GOLDLong
by Crypto-Check-
39
SVB, Silvergate, Signature: 2008 Again?Hi Traders, Investors and Speculators of the Charts 📈📉 Ev here, committed to keep you updated on the latest major event that's taking the world by storm: The recent collapse of three major banks: Silicon Valley Bank $SIVB , Silvergate Capital Corporation $SI and now Signature Bank $SBNY . It has since came to light that many cryptocurrency companies had vested interest in thee bank including Coinbase, Circle and Ripple. Furthermore, over a dozen Chinese-based firms confirmed their exposure to SVB. Many other companies have since confirmed exposure including Roku ($487 million) , Etsy $ETSY , BlockFi and more. Most recently: 🛑 HSBC agreed to acquires UK branch of SVB for 1 pound . Yes, yes you read that correctly. 🛑 Just a few hours ago, signature Bank, a New York financial institution with a big real estate lending business that had recently made a play to win cryptocurrency deposits, closed its doors Sunday after regulators said that keeping the bank open could threaten the stability of the entire financial system. 🛑 It comes to light that SVB executives sold large portions of their shares earlier in February: - CEO George B. sells 11% on 27 Feb - General Counsil Michael Z. sells 19% 5 Feb - CFO Daniel B. sells 32% 27 Feb - CMO Michelle D. sells 25% 1 Feb Are we seeing some shocking similarities to the 2008 market crash? The global financial crisis of 2008 was caused by a complex interplay of factors, including the collapse of several major banks. Some of the notable banks that collapsed or were bailed out during the crisis: 1) Lehman Brothers: This investment bank filed for bankruptcy on September 15, 2008, after it became clear that it was heavily exposed to toxic mortgage-backed securities. 2) Bear Stearns: This investment bank was acquired by JPMorgan Chase in a government-backed bailout in March 2008, after it became clear that it was struggling to meet its financial obligations. 3) Washington Mutual: This savings and loan bank was seized by federal regulators in September 2008 and its assets were sold to JPMorgan Chase. 4) Merrill Lynch: This investment bank was acquired by Bank of America in a government-brokered deal in September 2008, after it became clear that it was heavily exposed to mortgage-backed securities. 5) Wachovia: This commercial bank was acquired by Wells Fargo in a government-brokered deal in October 2008, after it became clear that it was heavily exposed to risky mortgage assets. These are just a few of the banks that experienced significant financial difficulties during the crisis. The collapse of these institutions had a profound impact on the global economy, leading to widespread job losses, foreclosures, and economic turmoil. In case you missed the earlier updates and important facts: In the past few weeks, there have been two significant bank failures in the United States that have sent shockwaves throughout the financial world. The collapse of Silicon Valley Bank and Silvergate Bank has sparked concerns about the stability of the banking system and the future of the crypto industry. The failure of these banks highlights the fragility of the financial system and the challenges faced by institutions that operate in high-risk sectors like tech and crypto. Silicon Valley Bank ( SVB ) was closed by the FDIC on March 9 due to its heavy losses caused by the downturn in technology stocks and the U.S. Federal Reserve's aggressive plan to increase interest rates. The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the US Congress in 1933 to maintain stability and public confidence in the nation's financial system. The FDIC provides deposit insurance that guarantees the safety of deposits in member banks, up to a certain limit. In the event that a member bank fails, the FDIC will step in to insure deposits, provide assistance to depositors, and liquidate the failed bank's assets. The FDIC also regulates and supervises member banks, as well as conducts research and analysis on the banking industry. Silicon Valley Bank bought bonds using customers' deposits, but the value of those investments fell as interest rates rose. This is usually not a problem for banks, but Silicon Valley Bank's customers were largely startups that needed cash. Venture capital funding was drying up, and companies were tapping their existing funds deposited with Silicon Valley Bank, which was at the center of the tech startup universe. In response to this liquidity crisis, SVB sold a $21bn bond portfolio at a loss of $1.8 billion. The bank attempted to fill the solvency hole with a combined equity offering of $2.25bn on March 8, but the attempt failed. This is the largest failure of a financial institution in the United States since Washington Mutual collapsed more than a decade ago. The closure of SVB had an immediate effect on some startups that had ties to the bank, as they scrambled to pay their workers and feared having to pause projects or lay off employees until they could access their funds. SVB , the 16th largest bank in the US, had assets of $209 billion, with more than 50% of its investments tied up in long-term securities, including exposure to the Silicon Valley tech and health startup world. The bank's sudden collapse has raised questions about its risk management practices, and the impact of its closure on its clients, who are largely startups and wealthy tech workers. The bank's large uninsured deposits and exposure to high-risk sectors like tech and crypto contributed to its downfall. But SVB isn't the only one... Silvergate Bank, which has been a significant player in the crypto world, has announced that it is closing and returning deposits. The bank's holding company, Silvergate Capital Corporation, stated that the decision was made "in light of recent industry and regulatory developments." The closure follows the loss of one billion dollars in a quarter after customers withdrew $8.1 billion, and a subsequent filing in March revealing even worse financials. The closure of Silvergate Bank is concerning for the crypto industry, as it may lead to companies turning to less regulated institutions for their banking needs, potentially making the space even riskier. Coinbase, Crypto.com, and Paxos have already started moving away from the bank. The collapse of the bank will likely draw scrutiny from lawmakers who are concerned about the crypto contagion affecting the traditional financial sector. The Silvergate Exchange Network, which allowed crypto exchanges like Coinbase, Gemini, and Kraken to move money between themselves and other institutions, has also been shut down. The bank's financial struggles have been ongoing for some time, with some of its high-profile clients like FTX and Genesis also experiencing challenges. Silvergate's collapse raises concerns about the future of the crypto industry, as companies may turn to less regulated institutions for their banking needs, potentially making the space even riskier for everyone involved. The bank's failure is also likely to draw scrutiny from lawmakers concerned about the potential contagion of the crypto industry on the traditional financial sector. Late Friday night Coinbase, a popular cryptocurrency exchange, announced that it would suspend conversions for the USDC stablecoin. This led to a rush of people trying to sell their USDC holdings, causing it to depeg from its value of $1 and trade as low as $0.87 before recovering to $0.92. Another stablecoin, Dai, also depegged and experienced a high volume of trading. Stablecoins are important in the cryptocurrency market as they provide a way for traders to move funds between different exchanges or cryptocurrencies without having to convert back to fiat currency. They are also used as a store of value by some cryptocurrency investors who prefer a more stable asset compared to the volatility of Bitcoin or other cryptocurrencies. If stablecoins depeg permanently, it could lead to a loss of confidence in their stability and reliability. This could potentially cause a sell-off of stablecoins and a shift towards other assets perceived as more stable, such as traditional fiat currencies. But before we panic too hard and FUD out, it's important to note that the impact of this crisis on cryptocurrencies such as alts and Bitcoin would depend on the severity and duration of the stablecoin depegging event, as well as other market factors such as investor sentiment and regulatory actions. In the past, there have been instances of stablecoins temporarily depegging from their underlying assets without significant impact on the broader cryptocurrency market. One notable example of a stablecoin depegging in the past is the case of Tether (USDT) in 2018. Tether is a stablecoin that is pegged to the value of the US dollar , with each USDT token representing one US dollar . In October 2018, Tether's price dropped below the $1 peg on several cryptocurrency exchanges, leading to concerns about the stability of the stablecoin. The depegging was attributed to a variety of factors, including regulatory pressures, concerns about Tether's reserves, and a general market downturn. The depegging led to a sell-off of Tether and a shift towards other stablecoins such as USD Coin ( USDC ) and TrueUSD (TUSD), which saw increased demand as traders and investors sought more reliable alternatives. Despite the depegging of Tether, the broader cryptocurrency market did not experience a significant impact, with Bitcoin and other cryptocurrencies largely unaffected. However, the incident highlighted the potential risks and uncertainties associated with stablecoins and their reliance on centralized institutions to maintain their pegs. In terms of price action for the immediate term, the Tether (USDT) depegging event in 2018 did have some impact on the cryptocurrency market prices, although the impact was relatively limited and short-lived. Following the depegging of USDT, there was a brief sell-off of Tether and a shift towards other stablecoins such as USD Coin ( USDC ) and TrueUSD (TUSD). This led to increased demand for these stablecoins, which helped to maintain their pegs to the US dollar . However, the broader cryptocurrency market, including Bitcoin , was largely unaffected by the Tether depegging. While there was some initial volatility and uncertainty, the market quickly stabilized and resumed its upward trend. 💭 Share your thoughts in the comment section and stay tuned! _______________________ 📢Follow us here on TradingView for daily updates and trade ideas on crypto , stocks and commodities 💎Hit like & Follow 👍 We thank you for your support ! CryptoCheck
SShort
by Crypto-Check-
29
2008 LEVEL ARE CLOSE - COULD IT BREAK IT - WAIT - ZB1! - WEEKLY30 years US Dollar Future could be going back to its 2008 level. Potential probability exists to see it going even lower. Market price have failed to break its 2020 down trending resistance. The potential historical resistance, illustrated with the horizontal upper line, shows that the market have tried to go in the long direction but have failed several times. The recent acceleration of the price sinking have possibly revealed a waiting zone pictured by the rectangle. It can be a potentially perfect zone to enter long but here the fundamental analysis need to be thoroughly done. For the time being, this idea will flag it as being bearing until the 2008 level is touched. At the 2008 level, potential pullback up could be interesting. See previous analysis on the ZB1!, linked to this idea, pretty interesting!
CBOT:ZB1!Short
by Diallo_Charts_Ideas
Worst Case Scenario for SPX!Visual comparison of 2022 SPX and 2008 SPX crisis! If this pattern repeats, will lead us a -50% (or more) market, meaning giving us great buying opportunity for long term wealth investment. You don't need to get the dip with all your money invested and leverage x100, cause probably you won't get the real dip. Probably, the best way to trade this is DCA (Dollar Cost Average), meaning you should start buying SPX NOW! but... not the 100% of you patrimony. Start buying small pieces and when we start getting closer to the POSSIBLE bottom, increase the % you buy.
BLACKBULL:SPX500Short
by Horizon_Trader
2
9 weeks rally and then what? Similar pattern to 08, everyone talking about repeating the same pattern, even the news about banks defaulting are the same, and even the hero of 08 is the same Dr . Burry. Move to 100ma and then back to 200ma? and then everyone sees it and goes short? yea...... I am contrarian here if everybody sees it and talks about it I would rather do the opposite. Do your own research, all of the above is out of my imagination, please trust no one's opinion. Look first/ Then leap
SP:SPXLong
by UnknownUnicorn274312
DOW JONES - Signal That We Haven't Seen Since the Crash of 2008Dow Jones Index has showed a monthly signal not seen since 2008. The price action that has currently developed is very similar to the beginning of the 2008 crash. In fact, the next rally (if we get one) can be the final "make or break". See the chart comparison between 2008 and 2022. I'm not a perma-bear nor do I ever like predicting crashes or waiting around for one. However, the technical setup with the current inflation and aggressive FED rate policy can be just what it takes to crush this market. TECHNICALS: The monthly histogram has fired negative for the first time since July of 2008 and is also in a volatility squeeze (John Carter...). The squeeze tends to fire in the direction of the primary trend. Yet unless the macro picture changes (i.e. FED reverses course, etc), it appears the squeeze is already beginning to fire SHORT. I'm anticipating another 40% lower from where we are now, that is using the same projection from the crash of 2008. Now, a lot can change and the macro picture is very different from that of 2008. A lot of people will buy the next leg up in this BEAR TREND hoping to have nailed the bottom. It will be those buyers who will end up capitulating and puking the market when it catches them off guard. Word of advice - be very cautious on going "all in" on this next counter rally. The market is in a massive squeeze. (similar theme will apply to other indices) OANDA:US30USD SP:SPX NASDAQ:QQQ AMEX:DIA Stay safe all and God bless.
OANDA:US30USDShort
by andremkv
Tools to assess SPX for potential bear and bull marketsIndicators - • CM_Ultimate RSI Multi Timeframe • CM_Stochastic Multi Timeframe • CM_Stochastic Highlight Bars Ticker - QUANDL:MULTPL/SHILLER_PE_RATIO_MONTH – Now I cannot seem to find the ticker through the search of Trading view. However, I found this by clicking on a post made about this ticker, opening the full chart, and adding it to your watchlist. (If any knows this ticker, please post it in the comments) (If you want to add it to your watchlist I suggest clicking on the ticker link above this post and adding it through there) Possible Ticker - QUANDL:MULTPL/SP500_PSR_QUARTER – This is a price to sales ratio of the SPX. This does not have as much history as the Shiller ticker on TradingView however may just be as useful in the future. This is the Shiller Cape Ratio and first a little about it. The Shiller P/E was created by Nobel Prize winner Robert J. Shiller. This ratio helps investors understand whether stocks are overvalued or undervalued while also correcting for short-term volatility. This analytical tool is most used to evaluate the overall U.S. stock market. It is also known as the cyclically adjusted price-to-earnings ratio (CAPE) or the Shiller P/E 10, due to the 10-year data it uses. As much as these indicators can be used directly on the SPX, I find It cancels out the noise and gives you a strategy and indicator that helps you feel more confident about your decision knowing it is backed by fundamentals. A lot of people had compared the similarities between this crash and the 2008 and this current bear market. The similarities of the point of crossover of the stochastic in the exact position of the 2008 bear market. Not to mention, with the RSI still not having reached oversold territory this indicate that the market has a way to go. Technical analysis can work great on these indicators as using support and resistance levels in the same way you would use them on any other security. Using them to look for potential bounce or resistance levels in bear a bull markets can work wonder. Another ticker that these indicators work lovely on is the S5FI and the S5TH for look for oversold levels as well as divergence a momentum. I will be completely honest, as I am only new to technical analysis. However, I find that similar to crypto using of chain analysis, that trading of fundamentals or underlying key figures give me loads more confidence in making more accurate decisions and better precisely timed decisions and a better understanding of what drives markets.
SP:SPX
by Ryan1993
1
2008 vs 2022 I found a lot of similarity's between this crash and the 2008 financial crisis stock market crash. Quick TA summary: 1. We have the same kind of downwards parallel channel 2. The chart of the 2022 crash so far fits pretty well into the 2008 crash, the chart of the 2008 crash fits pretty well into today's chart. Quick Fundamental summary: There are so many reasons why the economy could have a meltdown. I wrote about it last year in November in my previous post, but there are other things to talk about now: 1. The FED changing the definition of a recession. The US GDP came in at -0.9% for Q2, which is the second consecutive quarter in a row that the FED published negative GDP growth. Here is how we actually define a recession, like we have always done: "Experts declare a recession when a nation’s economy experiences negative gross domestic product (GDP), rising levels of unemployment, falling retail sales, and contracting measures of income and manufacturing for an extended period of time. Recessions are considered an unavoidable part of the business cycle—or the regular cadence of expansion and contraction that occurs in a nation’s economy". I mean come on guys, these terms/indicators exists so that governments and central banks can change their policy's on time. But instead of actually changing their policy to a recession policy, they simply deny the recession and even try to change the definition of it. We have heard the "this time is different" enough times and it has so far always lead to real problems. This has to do with the fact that there are going to be new elections soon, so denying the recession is a convenient thing for them to do. 2. The biggest drop in Average and Median New US Home prices since 2008. April Median: $457,000 and June Median: $402,400 this is a decline of 11.95% in the past 2 months. April Average: $569,300 and June Average: $456,800 this is a decline of 19,76% in the past 2 months. 3. 40% of Americans Are Struggling to Pay Their Bills Right Now. "More Americans are struggling to pay their bills now more than any other time in 2022 — and possibly even since the pandemic began.For more than 91 million U.S. adults, affording typical household expenses is “somewhat difficult” or “very difficult,” according to data released this week by the Census Bureau. That accounts for 40% of the Americans who responded to the bureau's survey between June 29 and July 11. (If you include folks who took the survey but did not respond to that particular question, the portion is 36%.)" 4. Unfortunately inflation is not coming down, even though the FED is raising it's interest rates pretty aggressively. They told us that inflation was going to be temporary, but it wasn't. They have clearly underestimated the situation. 5. 80% of all US dollars in existence were printed in the last 22 months (from $4 trillion in January 2020 to $20 trillion in October 2021 (honestly what were they thinking, this isn't monopoly guys...) 6. US OIL en UK OIL have both dropped below $100. Every time this has happened we have gone into a recession, and most of the time the stock market had pretty significant losses. Gasoline prices are still abnormally high, as you noticed when you are refilling your car with fuel. 7. A lot of company's have been beating their EPS lately. However the expectations for EPS are like half of what the company's had been reporting from 6 to 9 months ago. 8. We are heading into September next month, which is statistically the worst month for stocks. The biggest crashes have happened in November. PE ratio's are still high so they have to come down. As of 4:00pm EDT Fri Aug 5, The current Shiller PE Ratio is 31.10. Mean: 16.96 Median: 15.88 As you can see we still have a long way down to go... 9. Food shortages for the following products: (1). Chickpeas 2. Wheat 3. Sugar 4. Avocados 5. Paper Goods 6. Canned Goods 7. Eggs and Meat 8. Pet Food 9. Baby Formula 10. Liquor Why Are These Items in Short Supply? "It’s because of labor shortages and supply-chain issues, from food manufacturers to grocery stores. There simply aren’t enough people to “make the goods, move the goods and sell the goods,” says Jim Dudlicek, a representative for the National Grocers Association. According to Parade, the recent invasion of Ukraine by Russia plays a role, with supply chains from Europe heavily disrupted. Labor shortages also continue, with people still out due to COVID-19 or resigning due to low wages and poor work conditions. In addition, supply is affected by more people cooking and eating at home, a trend that started at the onset of the pandemic. “Demand has been very, very high,” Denis says. Still, she doesn’t think there’s a reason for people to stockpile. She pointed to lumber as an example of a product that was extremely hard to get for a while, but has become more plentiful in recent months, and the food supply chain likely will rebound in a similar fashion, although it may take time." 10. Micheal Burry wrote: "Dead cat bounces are the most epic. 12 of the top 20 nasdaq 1-day rallies have happened during the 78% drop from 2000's top. 9 of the top 20 S&P500 1-day rallies happened during the 86% drop from the 1929 top. Micheal Burry also wrote: RE: paradigm shifts/speculative peaks, the SP500 bottomed 13% lower than 2002's bottom in 2009, 17% lower than 1998's LTCM crisis low in 2002, and 10% lower than 1970's low in 1975. 15% lower than the COVID low is SPX at $1862. - Shiller PE of 16, nominal PE of 9. In historic range.
SP:SPXShort
by Y_Duursma
11
The 5 Crashes That Shook The Markets.A very brief look at 5 of the most significant market crashes to date, using the Dow Jones Index. Content taken from various online sources. Great Crash 1929 Many factors likely contributed to the collapse of the stock market. Among the more prominent causes were the period of rampant speculation (those who had bought stocks on margin not only lost the value of their investment, they also owed money to the entities that had granted the loans for the stock purchases), tightening of credit by the Federal Reserve, the proliferation of holding companies and investment trusts (which tended to create debt), a multitude of large bank loans that could not be liquidated, and an economic recession that had begun earlier in the summer. During the mid- to late 1920s, the stock market in the United States underwent rapid expansion. It continued for the first six months following President Herbert Hoover’s inauguration in January 1929. The prices of stocks soared to fantastic heights in the great “Hoover bull market,” and the public, from banking and industrial magnates to chauffeurs and cooks, rushed to brokers to invest their liquid assets or their savings in securities, which they could sell at a profit. Billions of dollars were drawn from the banks into Wall Street for brokers’ loans to carry margin accounts. The stock market stubbornly kept on climbing. That is, until October 1929, when it all came tumbling down. Catching on to the market's overheated situation, seasoned investors began "taking profits" in the autumn of 1929. Share prices started to stutter. They first crash on Oct. 24, 1929, markets opened 11% lower than the previous day. After this "Black Thursday," they rallied briefly. But prices fell again the following Monday. Many investors couldn't make their margin calls. Wholesale panic set in, leading to more selling. On "Black Tuesday," Oct. 29, investors unloaded millions of shares — and kept on unloading. There were literally no buyers. The rapid decline in U.S. stocks contributed to the Great Depression of the 1930s. The Great Depression lasted approximately 10 years and affected both industrialized and non industrialized countries in many parts of the world. When Franklin D. Roosevelt became President in 1933, he almost immediately started pushing through Congress a series of programs and projects called the New Deal. How much the New Deal actually alleviated the depression is a matter of some debate — throughout the decade, production remained low and unemployment high. But the New Deal did more than attempt to stabilize the economy, provide relief to jobless Americans and create previously unheard of safety net programs, as well as regulate the private sector. It also reshaped the role of government, with programs that are now part of the fabric of American society. Black Monday 1987 Many market analysts theorize that the Black Monday crash of 1987 was largely driven simply by a strong bull market that was overdue for a major correction. 1987 marked the fifth year of a major bull market that had not experienced a single major corrective retracement of prices since its inception in 1982. Stock prices had more than tripled in value in the previous four and a half years, rising by 44% in 1987 alone, prior to the Black Monday crash. The other culprit pinpointed as contributing to the severe crash was computerized trading. Computer, or “program trading,” was still relatively new to the markets in the mid-1980s. The use of computers enabled brokers to place larger orders and implement trades more quickly. In addition, the software programs developed by banks, brokerages, and other firms were set to automatically execute stop-loss orders, selling out positions, if stocks dropped by a certain percentage. On Black Monday, the computerized trading systems created a domino effect, continually accelerating the pace of selling as the market dropped, thus causing it to drop even further. The avalanche of selling that was triggered by the initial losses resulted in stock prices dropping even further, which in turn triggered more rounds of computer-driven selling. A third factor in the crash was “portfolio insurance,” which, like computerized trading, was a relatively new phenomenon at the time. Portfolio insurance involved large institutional investors partially hedging their stock portfolios by taking short positions in S&P 500 futures. The portfolio insurance strategies were designed to automatically increase their short futures positions if there was a significant decline in stock prices. On Black Monday, the practice triggered the same domino effect as the computerized trading programs. As stock prices declined, large investors sold short more S&P 500 futures contracts. The downward pressure in the futures market put additional selling pressure on the stock market. In short, the stock market dropped, which caused increased short selling in the futures market, which caused more investors to sell stocks, which caused more investors to short sell stock futures. A key consequence of the Black Monday crash was the development and implementation of “circuit breakers.” In the aftermath of the 1987 crash, stock exchanges worldwide implemented “circuit breakers” that temporarily halt trading when major stock indices decline by a specified percentage. For example, as of 2019, if the S&P 500 Index falls by more than 7% from the previous day’s closing price, it trips the first circuit breaker, which halts all stock trading for 15 minutes. The second circuit breaker is triggered if there is a 13% drop in the index from the previous close, and if the third circuit breaker level is triggered – by a 20% decline – then trading is halted for the remainder of the day. The purpose of the circuit breaker system is to try to avoid a market panic where investors just start recklessly selling out all their holdings. It’s widely believed that such a general panic is to blame for much of the severity of the Black Monday crash. The temporary halts in trading that occur under the circuit breaker system are designed to give investors a space to catch their breath and, hopefully, take the time to make rational trading decisions, thereby avoiding a blind panic of stock selling. The Federal Reserve responded to the crash in four distinct ways: (1) issuing a public statement promising to provide liquidity, as needed, “to support the economic and financial system”; (2) providing support to the Treasury securities market by injecting in-high-demand maturities into the market via reverse repurchase agreements; (3) allowing the federal funds rate to fall from 7.5% to 7.0% and below; and (4) intervening directly to allow the rescue of the largest options clearing firm in Chicago. Dotcom Bubble 2000 The dotcom crash was triggered by the rise and fall of technology stocks. The growth of the Internet created a buzz among investors, who were quick to pour money into start-up companies. These companies were able to raise enough money to go public without a business plan, product, or track record of profits. These companies quickly ran through their cash, which caused them to go under. The Internet bubble, grew out of a combination of the presence of speculative or fad-based investing, the abundance of venture capital funding for start-ups, and the failure of dotcoms to turn a profit. Investors poured money into Internet start-ups during the 1990s hoping they would one day become profitable. Many investors and venture capitalists abandoned a cautious approach for fear of not being able to cash in on the growing use of the Internet. With capital markets throwing money at the sector, start-ups were in a race to quickly get big. Companies without any proprietary technology abandoned fiscal responsibility. They spent a fortune on marketing to establish brands that would set them apart from the competition. Some start-ups spent as much as 90% of their budget on advertising. Record amounts of capital started flowing into the Nasdaq in 1997. By 1999, 39% of all venture capital investments were going to Internet companies. That year, most of the 457 initial public offerings (IPOs) were related to Internet companies, followed by 91 in the first quarter of 2000 alone. The high-water mark was the AOL Time Warner megamerger in January 2000, which became the biggest merger failure in history. As investment capital began to dry up, so did the lifeblood of cash-strapped dotcom companies. Dotcom companies that reached market capitalizations in the hundreds of millions of dollars became worthless within a matter of months. By the end of 2001, a majority of publicly-traded dotcom companies folded, and trillions of dollars of investment capital evaporated. The bubble ultimately burst, leaving many investors facing steep losses and several Internet companies going bust. Companies that famously survived the bubble include Amazon, eBay, and Priceline. The US government would date the start of the dot-com recession as beginning in March 2001. And by the time of the economic shock from the terrorist attacks of September 11, 2001, there was no longer any doubt. In that tragic month of September, for the first time in 26 years, not a single IPO came to market. The dot-com era was over. Global Financial Crisis 2008-2009 The crisis, often referred to as “The Great Recession,” didn’t happen overnight. There were many factors present leading up to the crisis, and their effects linger to this day. The foundation of the global financial crisis was built on the back of the housing market bubble that began to form in 2007. Banks and lending institutions offered low interest rates on mortgages and encouraged many homeowners to take out loans that they couldn’t afford. With all the mortgages flooding in, lenders created new financial instruments called mortgage-backed securities (MBS), which were essentially mortgages bundled together that could then be sold as securities with minimal risk load due to the fact that they were backed by credit default swaps (CDS). Lenders could then easily pass along the mortgages – and all the risk. Outdated regulations that weren’t rigorously enforced allowed lenders to get sloppy with underwriting, meaning the actual value of the securities couldn’t be established or guaranteed. Banks began to lend recklessly to families and individuals without true means to follow through on the mortgages they’d been granted. Such high-risk (subprime) loans were then inevitably bundled together and passed down the line. As the subprime mortgage bundles grew in number to an overwhelming degree, with a large percentage moving into default, lending institutions began to face financial difficulties. It led to the dismal financial conditions around the world during the 2008-2009 period and continued for years to come. Financial stresses peaked following the failure of the US financial firm Lehman Brothers in September 2008. Together with the failure or near failure of a range of other financial firms around that time, this triggered a panic in financial markets globally. Many who took out subprime mortgages eventually defaulted. When they could not pay, financial institutions took major hits. The government, however, stepped in to bail out banks. The housing market was deeply impacted by the crisis. Evictions and foreclosures began within months. The stock market, in response, began to plummet and major businesses worldwide began to fail, losing millions. This, of course, resulted in widespread layoffs and extended periods of unemployment worldwide. Declining credit availability and failing confidence in financial stability led to fewer and more cautious investments, and international trade slowed to a crawl. Eventually, the United States responded to the crisis by passing the American Recovery and Reinvestment Act of 2009, which used an expansionary monetary policy, facilitated bank bailouts and mergers, and worked towards stimulating economic growth. Covid Crash 2020 The 2020 crash occurred because investors were worried about the impact of the COVID-19 coronavirus pandemic. The uncertainty over the danger of the virus, plus the shuttering of many businesses and industries as states implemented shutdown orders, damaged many sectors of the economy. Investors predicted that workers would be laid off, resulting in high unemployment and decreased purchasing power. On March 11, the World Health Organization (WHO) declared the disease a pandemic. The organization was concerned that government leaders weren't doing enough to stop the rapidly spreading virus. Investors had also been jittery ever since President Donald Trump launched trade wars with China and other countries. Under both the Trump and Biden administrations, the federal government passed multiple bills to stimulate the economy. These included help directed at specific sectors, cash payments to taxpayers, increases in unemployment insurance, and rental assistance. These measures further soothed investors, leading to additional gains in the stock market. Investors were also encouraged by the development and distribution of multiple COVID-19 vaccines, which began under the Trump administration. The driving forces behind the stock market crash of 2020 were unprecedented. However, investor confidence remained high, propelled by a combination of federal stimulus and vaccine development.
TVC:DJIEducation
by bL1TZZ
9
NASDAQ VWAP to 5074 ? Done.Chart show's NQ Monthly price 2002 - present. Red dotted line: 1 year VWAP +/- 2.5 SD www.investopedia.com White dotted line: 10yr VWAP, and the white band is+2.5 SD 10yr VWAP today is at 5074 (thus the title) while price Is it reasonable to suggest NQ may drop to it's 10yr VWAP, to 5074? Yes, it's a plausible expectation because. It's happened before (2002 and 2008). Every year price has followed its 10yr VWAP, albeit from 2.5 SD above. There's a fundamental narrative that allows for just such a drop. Is this certain? No. Because: At the end of VWAP's period (10yr, 1yr, Q, M, W, D, etc) its calculation starts afresh with volume=0. For example the red dotted 1yr VWAP gaps to price (up/down) every January 1st. Therefor alternative outcomes include: 1. Price remains 2.5 SD above VWAP until Jan 1st 2030, then gaps-to price. 2. If price comes down slowly over a multi period, the 10yr VWAP will rise (as lower prices get averaged in) until they meet far above 5000. Notes: NQ futures, first contract continuous. VWAP's SD may not be valid at this TF. The 10yr VWAP's lower band quickly drops below zero. That said, the +2.5 band has been very useful over the last 12 years. Finding a useful solution is left as an exercise for the reader. (Hint: Percentage)
CME_MINI:NQ1!Short
by gb50k
Interest Rates vs Everyone - How Crypto Can Bounce BackA pretty rough week for the markets - especially crypto. The recent dips are a result of mainstream money (crypto curious, but not necessarily dedicated) leaving the space as a response to inflation woes and the Federal Reserve planning to increase interest rates over 2022. The US housing markets are also set to slow down as well, possibly leading to a recession in the US markets and the global economy as a whole. What's the silver lining? Well, the last time the housing market dipped was in 2008-2012, which coincides directly when Bitcoin itself was invented by Satoshi Nakamoto. Will the same sort of sentiment emerge as a result of fiat money crashing this time around? Time will tell.
ECONOMICS:USINTRLong
by RyanTanaka
2
SPX Fractal: 2008 Market Crash “History Doesn't Repeat Itself, but It Often Rhymes” – Mark Twain I've been noticing similarities between the 2008 top and the current market. If history rhymes, the market should find some support soon (3900-4000) before further downside later this year. This theory is further supported by: 1. sentiment,which is at an extreme low 2. the long term logarithmic trendline, acting as support on several occasions Best of luck traders. Tips: ETH: 0x13cd45d7d282ee0ee4635645cce2e2a566d9bed8
OANDA:SPX500USDShort
by Cryptogold14
Great Recession Fractal - This time is different?Greetings everyone. Check out my chart comparison of the period just prior to the stock market meltdown (on bottom) to where we are now here in 2022. Looks awfully similar to me. All kind of voices screaming don't fight the FED this decade plus long bull market. Now with the FED raising interest rates leading to demand destruction with the intent of combating inflation; those same voices believe they are bluffing. Capital from Europe and Japan is flooding into the dollar, not crypto and equities. If this plays out the DJI is likely enough to revisit the flu lows ($18K) of 1st QTR 2020 and BTC heading to $18-$20K on it's macro Wave 4. Cash will be king during this short term deflationary period until they print more stimulus, which I predict will be close to the mid term US elections.
TVC:DJI
by CryptoDude79