Quote:
Originally Posted by PokerPlayingGamble
okay, what was that reason?
I can't give that one away exactly since I haven't seen anyone else put it together, but I'll give some hints on how to find it.
Someone has created a stock market mania/panic indicator that measures bubble size and the expected crash depth, but that was not their explicit intention.
This has traditionally been the ultimate cause of the end of these between recession crashes, but it doesn't explain 2010 and 2011:
The true explicit cause for the start of the crash phase is 100% economic and has a 100% success rate, and it goes back to the 1920 crash at least.
That mania indicator suggests a 1987 sized crash or worse, and you can see it in the crash shapes of 1929, 1987, the false start earlier this year, and now: a one month decline from the top of about 10%, about a 50% retracement, meandering downwards, then a soul sucking crash over a few days. All we're waiting on now is the final leg of the crash unless the true economic cause reverses course hard.
Though this is 100% economic, the phenomenon shows up in simpler technical indicators like Eliades's "Sign of the Bear".
https://justsignals.blogspot.com/201...n-of-bear.html His timing is less precise than the economic cause which finally fired again recently. All the stars have to be in alignment for the crash phase to begin, and we're pretty much there.
In terms of the economics, which are everything to this type of crash, they're all firing hard. And now, the Fed is nuking housing, autos, energy, semis, and capital goods. The only thing, and I mean the only thing, that's holding up the market is residual mania. Trump's tariffs and Iranian oil sanctions were the cause for the delay from early this year to now by holding up manufacturing, energy, and energy associated industries as everything else went to hell, but he's blinked hard on those, so we may start hearing about even further supplier orders being cut tomorrow in addition to what's been coming out of hardware tech like the semis.
So we have a Fed tightening cycle coming to an end which is smashing everyone across the globe; another major Chinese downturn like 2015-2016 that has nothing to do with tariffs and should persist for another year at least; and now Trump going from jerking the economy upwards with tariffs and Iranian sanctions to pulling it back down hard by totally caving on Iran and probably halting his rescue of US labor participation. There is nothing good on the horizon, and the mania persisting will only hurt the economy more.
The economy always wins.