I have not seen many people who look into patterns and I am quite astonished that this pattern does not get attention.
Before the bubble popped in 2000, previous market leaders (amazon etc.) started underperfoming a few months before the bubble eventually popped. Dji kept moving until october, but nasdaq topped out in march. So nasdaq started underperforming and dji outperformed for the latter parts of the bubble, on a relative basis.
Right now, amazon, apple, tesla (and more) who were market leaders have started underperforming the rest of the market since a few months back. Now nasdaq has started underperforming dji. It is very similar to what happened in 2000.
Another example is that the 12 month deviation between nasdaq and russel 2000 have only been at these levels one time in the past, and that was just when the bubble had started to pop. (Wish i could post pictures but no)
The bullish tone is clearly there (fed put, optimism for the reopening, rates cant do much more damage, the worst is over etc.) and everyone seem to think that any dip should be bought.
For me, this is the perfect storm. People get stimilus checks, see a decline and buy more because the last time the market dropped it came back (recency bias)
When I posted here that I had shorted tesla at 873 with 3x leverage, I got laughed at. Turned out to be a good bet (position closed at 600). Now everyone seems to believe that tesla is making a comeback). I believe that what tesla did with the 20% gain in one dat just confirmed that the tesla bubble had popped. It was the final signal, the bull trap.
I believe that nasdaq will not make any more highs in the near future and that dji will outperform for a short while, then we will see a similar scenario to 2000.
What are your opinions? (Sorry for the spelling, I am on my phone with swedish auto-correct so I could have let some errors slip)
Submitted March 14, 2021 at 05:27AM by politiksnubben https://ift.tt/3ldZDRH
