I’m going to show the signs that this bubble is bursting, and I’ll talk about what to do in your life, your business, and your investments at this point. As I write this in January 2020, we’re finally seeing clear signs that the bubble is bursting. Governments have been fighting this for years and year, with Trump adding corporate tax cuts and deregulation to the efforts on the fiscal side. Next is likely to come a payroll tax holiday or checks in the mail (helicopter money) to consumers when the economy continues to weaken ahead. But the number-one thing I’ve seen, the first sign, was a series of key stock market tops around the world, after the Trump bump from late 2016, in early January of 2018. I got more bullish again when Trump won against the odds and the Dow had a 3,000-point overnight reversal. I finally declared we were entering the orgasmic final blow-off phase or the bubble. That top looked like a blow-off top at first. But by early February I could tell that it wasn’t. The reason I switched to a sit stand desk was, simply, to find a reprieve from pain.
My analysis of the last 7 major stock bubbles in the last century shows that the first crash averages 42 percent in the first 2.6 months—ranging from 30 percent to 49 percent. The most extreme was that 49 percent in the Dow in 1929 in 2.3 months—the very crash on a 90-year superbubble cycle that I compare to this one. The least was the 30 percent crash in Japan, because their bubble burst alone in a more bullish period for the global economy. That January crash was limited to 10 percent and did not follow that 42 percent crash scenario. A height-adjustable stand up desk helps you cycle between sitting and standing throughout your workday.
What has happened since? Stocks keep moving more sideways, making slight new highs. But each correction thus far has been deeper. The second correction was 25 percent in late 2018. This is potentially shaping up to be a classic megaphone pattern; if that is the case, we are in the final up wave. This wave has broken higher than the past one, in what is called an overthrown pattern, which would signal a top. January started out with the assassination of Iran’s top general in a drone strike, and stocks pulled back at first. A adjustable standing desk is a desk conceived for writing, reading or drawing while standing up or while sitting on a high stool.
If they break below 26,300 on the Dow, we should see a fallback of up to 33 percent, from its 28,873 top to around 19,500. Then Trump would easily argue for a full-out Fed monetary stimulus and a direct fiscal stimulus to consumers. We would get a final steep rally, where I would predict that the leading tech stocks in the NASDAQ would make a new high, but the broader indices, like the Dow and S&P 500, wouldn’t. Then that would signal a top and I would then expect that 42+ percent crash. There are many ways that using a electric standing desk can improve your health.
If this is the scenario, you should not wait for that to happen. You should get out of stocks and hedge through strategies, like cheap put options, in such a strong top. Keep active at work or your home office with a standing desk that will help you to change working positions often.
This megaphone pattern is something I’ve been talking about for years, as there is a giant one forming over a larger time frame. It’s so obvious that any stock analyst can see it, but they’re in denial; they don’t want to. They don’t see it, because it only tends to occur rarely in major topping patterns. The last time stocks peaked at the end of a generation’s spending cycle was between the mid-sixties and the early seventies, We had a series of higher highs. There was a high late in 1965; then it crashed. Then there was a slightly higher high late in 1968, then a deeper crash. The last high was late in 1972, and the deepest crash in that whole series happened into late 1974. That crash was 50 percent, right down to where the trendline through the progressively lower bottoms projected. How do you draw this megaphone pattern? There was already a series of slightly higher highs and progressively lower lows. You draw a trend line through the tops and the bottoms, and it looks like a it looks like a megaphone. You can project where the thing is likely to end by where the final correction hits the bottom trend line.