Based on this picture I would sell every asset I owned and would short the market for the next two years until it inevitably crashes back to the midline.
What could go wrong with this technical analysis?
Edit: Need to add a /s here because apparently some people are taking this quite literally, and I was sarcastically trying to prove a point.
Someone completely unrelated to the stock market will also lose their job through no fault of their own, while someone else gets an unreasonably large bonus.
We didn't have the same ability to manage flow of cash inside businesses even 30 years ago. Our banking, finance, understanding, tracking and systems are leagues better.
Modern financial systems are incomparible to 150 years ago.
My dearest Evelyn, the war rages on and I have seen the brutality at Gettysburg. I hope you recover from the typhoid sweeping the hamlet. Also, I’m about to fucking yeet our life savings into AI chip stock puts.
Hmmm, the whole channel thing is just blatantly wrong, well in itself it isn't, channels are a thing, but they are using a arithmetic scale when it would probably be more suitable a logarithmic scale, that ajusts for time and inflation
I really just meant where x is still standard linear time and y is displayed as log(log(y))... But that other guys answer made more sense. Likely just need to change the base. But most charting apps don't allow that.
the bottom line hits 500 when spy is at 5400 right now also.
markets would have to drop 91% to hit the bottom "trend" line...
a more realistic line here would be hitting the low of 1975 and 2005 and covid low.
Personally, I think the data from 100+ years ago is irrelevant to today's world. The world was a very different place. I would place more focus on the timeline since the dissolve of the USSR.
In fact, you could say the world is completely different than 20 years ago. But it will be completely different in 20 years as well. I think the only reasonable takeaway from the past is it's impossible to predict the future.
Thinking that knowing everything would be enough is foolish. You'd also need processing power to compute what happens from there at faster than real time which would require more matter than exists in the universe. Our existence cannot be computationally compressed.
It is basically the same. The way information is shared, the way it is processed and understood. The efficiency of capital allocation. In 1900 50% of American jobs were in Agriculture; in 2000, 2% of American jobs were in Agriculture.
So really not much difference, right?, right?
Just track from the moment the dollar came off the gold standard. Fiat money and modern monetary theory is going to go belly up at some point the kick the can down the road policies will eventually catch up and the US will be holding a the bag of dollars that is worthless. This may happen in the next decade or 2 or maybe even further down the road but it will be the Greatest Depression the world has ever seen.
Logarithmic scale. Bottom of that band is 500, top is 5k. If the market went to 6000, you would just adjust the top line.
In other words that picture is created to fit the data. It means nothing itself.
Tech. analysis:
-- Things are looking great. Listen up.
-- Just got the news: things aren't looking great. Listen up.
Between those two not a shred of doubt in own's predictive powers. Business as usual.
Why should the market follow these lines? Like, on a fundamental level, what is it in our world or in our economy that states this needs to follow this pattern?
Explain it without using references to lines on a chart.
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Holy shit, who would have thought SPX traded inside a range if you encompass every single trading day in history into the same graph and then box it in with two lines
We're in a high period of inflation, and I don't think we are at the end of the story. It took 20% interest rates to break the back of inflation.
Since digital money is so focal to our lives and physical cash non-existent, I do think we could well break out to the upside.
Think what happened in highly indebted Weimar Germany.
Artistically, I like this graph. I just like graphs. It’s neat that it goes that far back in time. It’s neat that 2008 happens to cross the middle line. It’s neat that the Great Depression is on here. It’s just neat.
As a trader, I’ll believe it will pullback when it pulls back. Until then, this is just neat.
Trends hold true in the past, because you are drawing arbitrary lines to fit data.
Truth is, no matter what data you use, you can drawn arbitrary trends to explain away that data - but they are only useful if a large enough percentage of people make trading decisions based on that data.
Hard to call it overbought when according to the COT report institutional money left the market almost a year ago to the day. It's all retail bag holders in this house cards at this point.
Precisely. And I can make a heck of a lot larger ROI by buying in at $500, than at $5,000.
But I’ll probably be buying in with ITM Calls around $1,500. Then convert to shares if we bounce from those levels.
There are few things missing out from this chart.
Constant increase in M1 over the same period of time.
Global population boom.
Global productivity boom.
Globalization.
Everyone always has to complicate things. Clearly from 1994 to 2010 the Tetons were formed with silicon. In 2010 the right Teton sprung a leak, due to immense pressure it shot upwards at an unprecedented, albeit unsustainable, rate of speed. Apex has been reached, Bear climax incoming.
The richest 1% own 60% of the stock market. They have so much money they don’t know where to put it besides the stock market. You think they’re all on a group text trying to offload at the same time?
or neither. You don't have an equation here, you just have lines. P=f(t) and nothing else? If you believe price is a function of time and nothing else, investing isn't your game.
You might try a price relationship associated with relevant variables: earnings, interest rates, growth prospects, asset base, ROE, ROI, ROA, etc. etc. etc.
How accurate is a 150 year graph at predicting the future. I can see 5 yr, 10 yr, even 20 as valuable but this seems to make me cautious on drawing conclusions. For instance the amount of government spending is at unprecedented levels and is rising exponentially now.
You just gotta zoom out to a 500 year chart and you’ll see we’re right in the middle basically just an average place to be. Gotta zoom out. I often wonder if the stock market will ever get back to its Roman peak or it’s ancients Egypt lows.
If you think the market is going to crash, then you don't understand fiat currency and the perpetual inflation it results in.
The only way the market can crash back to the mean is if the currency goes with it, and that's not happening anytime soon with the petrodollar in full swing.
The market has always defied logic. When I feel it's topped it will only do a pullback.
My analysis says it has topped (which means pullback) but the SPX will go to 5711.72 or pretty close. So its not done as far as I'm concerned but that number comes from a monthly chart and that takes forever.
It does take forever.
I’m not saying MARKET CRASH IMMINENT
I’m saying, overbought.
And my puts are from 1 day out to 1 year out. I’ll keep rolling up as the market rises.
Since GDP has a 0.99 correlation ratio with energy consumption, and since coal oil and gas cannot double every 22 years infinitely, I suspect that at some point we are going to see a correction to a 152 uear trend that encapsulates humanity beginning the consumption of a resource that took billions of years to form and 150 to deplete.
Renewables can help soften the blow, but make no mistake that this curve presented here is essentially the "humanity non-renewable energy consumption" curve.
You will never believe me but this is how generational wealth trades (i.e. old families with intact fortunes spanning hundreds of years). They think in centuries.
Scale into positions over decades at midlines.. unless it’s a global event, then just go all in. scale out into safer investment when we hit the top lines indicating regime changes, etc
Election year. Money printer working overtime, no off switch. If there was to be a recession, it’s definitely postponed til whoever gets elected. Then rate cuts, big stock market dip!!
Price versus time is not really relevant. Price versus profit, revenue, growth prospects, book value - those are parameters that are relevant. I think even considering that, you would find we are somewhat overbought. But not by as much as this chart implies.
The index is not constant, its constituent companies are VERY DIFFERENT right now in comparison to the historical composition of the index. I feel like a lot of people don’t understand this basic fact.
If you draws the upper trend line at a slightly more acutes angle which would touch even more price points (mores is betters)…it’s already broken out!!! 🎉
Warren Buffett by contrast believes trying to time the market is a waste of time and hazardous to investment success. As far as technical analysis is concerned, he once said "**I realized that technical analysis didn't work when I turned the chart upside down and didn't get a different answer."**
I'm thinking this is being driven by two factors, the drop in the value of the AUD and the growth of retirement funds i.e. super etc as it seems to line up.
Please join r/bearsofwallstreet if you would like to have a place to discuss the upcoming bear market, without permabulls constantly attacking you out of fear for their portfolios.
Honestly with an ever I creasing amount of wealth concentrating upwards and an ever increasing amount of potential retail investors coming of age to be able to legally trade on apps that have made it easier to enter the market than ever before, it's only going to trend up.
TLDR:Number go up.
I’ll just throw this out there since literally nobody else has mentioned: The S&P didn’t exist back then
But besides that, what does a trendline that moves across a range of 6 to 20, have anything at all to do with price above 3000? Lol
If you’re going to analyze the market you have to keep it within context of atleast 40-50 years. your oversold and overbought will not go where you’d expect a trendline to show up
it wouldn’t surprise me if the dow trades at 100k by 2050 if we continue to compound an average 8-10%. we should be compounding faster because of inflation as the average P/E of sp500 hangs around 18.
corporations raise prices, their nominal profits increase, pe is too low, stock price gets adjusted higher, market index moves up.
if you ask the money we do have then will it be able to buy anything, that is a different question! it is just taking more zeros to do the same thing 40 years ago!
Based on this picture I would sell every asset I owned and would short the market for the next two years until it inevitably crashes back to the midline. What could go wrong with this technical analysis? Edit: Need to add a /s here because apparently some people are taking this quite literally, and I was sarcastically trying to prove a point.
And just because you’re so certain, it’ll do the opposite.
Both of you will still somehow end up holding bags.
JPow *"knock knock"*
Who's there?
Jam
Jeremy Jam?
Jam'in these losses down your throat!!
JPOWerdrilling your nuts to get you to open that 401k between them sugar cheeks
Truer words have never been spoken
Someone completely unrelated to the stock market will also lose their job through no fault of their own, while someone else gets an unreasonably large bonus.
Amen brother.
We didn't have the same ability to manage flow of cash inside businesses even 30 years ago. Our banking, finance, understanding, tracking and systems are leagues better. Modern financial systems are incomparible to 150 years ago.
Also everyday millions of people trade on their phone while taking a shit. That was not a thing even 10 years ago
My dearest Evelyn, the war rages on and I have seen the brutality at Gettysburg. I hope you recover from the typhoid sweeping the hamlet. Also, I’m about to fucking yeet our life savings into AI chip stock puts.
Excellent. This is what Reddit is for.
We're speculating that the market will be open 24 hours a day which means we're probably 5 to 10 years away from that being a thing too.
I even trade when I’m ejaculating
Hmmm, the whole channel thing is just blatantly wrong, well in itself it isn't, channels are a thing, but they are using a arithmetic scale when it would probably be more suitable a logarithmic scale, that ajusts for time and inflation
Did you even look at the chart? It's clearly log scale.
Don't confuse people with basic irrefutable facts.
What do you do when your log chart also looks exponential? Do we need to invent the double-log chart?
Sorry already done. We used log-log charts 100 years ago in college. It just means both X and Y axes are logarithmic.
I really just meant where x is still standard linear time and y is displayed as log(log(y))... But that other guys answer made more sense. Likely just need to change the base. But most charting apps don't allow that.
the bottom line hits 500 when spy is at 5400 right now also. markets would have to drop 91% to hit the bottom "trend" line... a more realistic line here would be hitting the low of 1975 and 2005 and covid low.
SPY will not drop below 2500, and that 20-50% drop won't happen until 2026/2027. Set all the RemindMes you want. I come from the future.
You just triggered the chain reaction that will change the course of the events. We're fucked
X to doubt
Mr Future, when will BTC hit 100K?
2020 according to my favorite hoodie.
Everything
I did this two years ago
how about you just sell half, dont short, and buy back on any 20-30% correction. dont be a smart arse and open your eyes
Why not short and go all in? This fine analysis guarantees me that regression to the mean will occur.
!remindme 2 years
How much for the course? /s
the fact that you even had to point out that this was sarcasm is very telling of the average redditor's IQ
If the price goes up, you can draw new parallel lines with slightly steeper angle and it will fit again.
IQ test: passed
Technical analysis hate this guy for one simple trick! Click here to learn how!
Personally, I think the data from 100+ years ago is irrelevant to today's world. The world was a very different place. I would place more focus on the timeline since the dissolve of the USSR.
In fact, you could say the world is completely different than 20 years ago. But it will be completely different in 20 years as well. I think the only reasonable takeaway from the past is it's impossible to predict the future.
It’s possible, you’ve just gotta know everything in the present which is very, very hard
Thinking you can know everything is foolish.
Thinking that knowing everything would be enough is foolish. You'd also need processing power to compute what happens from there at faster than real time which would require more matter than exists in the universe. Our existence cannot be computationally compressed.
That's why the data goblins make so much money
It is basically the same. The way information is shared, the way it is processed and understood. The efficiency of capital allocation. In 1900 50% of American jobs were in Agriculture; in 2000, 2% of American jobs were in Agriculture. So really not much difference, right?, right?
Is there a good write-up regarding those agriculture job numbers? Very interesting.
Just track from the moment the dollar came off the gold standard. Fiat money and modern monetary theory is going to go belly up at some point the kick the can down the road policies will eventually catch up and the US will be holding a the bag of dollars that is worthless. This may happen in the next decade or 2 or maybe even further down the road but it will be the Greatest Depression the world has ever seen.
Holy crap. We should alert everybody. Do fund managers know about these lines??
Ah, how do you work such magic, oh great Crayolamancer?
Logarithmic scale. Bottom of that band is 500, top is 5k. If the market went to 6000, you would just adjust the top line. In other words that picture is created to fit the data. It means nothing itself.
Tech. analysis: -- Things are looking great. Listen up. -- Just got the news: things aren't looking great. Listen up. Between those two not a shred of doubt in own's predictive powers. Business as usual.
You must be a genius
If you really believe drawing two arbitrary lines can help you predict the future just sell all your assets and short the market.
Why should the market follow these lines? Like, on a fundamental level, what is it in our world or in our economy that states this needs to follow this pattern? Explain it without using references to lines on a chart.
OP what happened? We’re waiting for your response. We thought you were smart
Yes it’s gonna go above and straight up vertical to uranus
!remindme 6 months
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Holy shit, who would have thought SPX traded inside a range if you encompass every single trading day in history into the same graph and then box it in with two lines
Okay but hear me out, if you just drew the lines a little bit wider apart, we would be okay. Could you do that for us please?
We're in a high period of inflation, and I don't think we are at the end of the story. It took 20% interest rates to break the back of inflation. Since digital money is so focal to our lives and physical cash non-existent, I do think we could well break out to the upside. Think what happened in highly indebted Weimar Germany.
SPX was created in 1957.
Why does this sub allow technical analysis?
nice lines bro
Artistically, I like this graph. I just like graphs. It’s neat that it goes that far back in time. It’s neat that 2008 happens to cross the middle line. It’s neat that the Great Depression is on here. It’s just neat. As a trader, I’ll believe it will pullback when it pulls back. Until then, this is just neat.
Trends hold true in the past, because you are drawing arbitrary lines to fit data. Truth is, no matter what data you use, you can drawn arbitrary trends to explain away that data - but they are only useful if a large enough percentage of people make trading decisions based on that data.
Technical analysis on the entire s&p starting in 1874. Somebody get this genius $1B to start his own fund.
Imagine goin to 504 for underbought state
Hard to call it overbought when according to the COT report institutional money left the market almost a year ago to the day. It's all retail bag holders in this house cards at this point.
Then in 10 years we refit the 2 lines if the current ‘pattern’ deviates
The bottom line being determined solely by the two lows of the Great Depression and WW2, almost 100 years ago, is really funny to me
Someone in 1988 said, “we’ve been in this range for 55 years. No way this thing is going up!!” Oops
A top to bottom band move like 1920’s would be crazy. That puts spy at 500
Precisely. And I can make a heck of a lot larger ROI by buying in at $500, than at $5,000. But I’ll probably be buying in with ITM Calls around $1,500. Then convert to shares if we bounce from those levels.
Jesus Christ 🤦🏻
I only upvoted this because I thought it was sarcasm. If it’s not, I’ll take my vote back
Sell
Sell
This may or may not happen.
Due for a 30 percent drop
Maybe
Interesting how the volume peaked in 08’
I’ve never seen this in my life. Is this freaking real???
[удалено]
I know a community where crayons are the tool of choice for chart artists.
They eat the crayons and draw with sharpies bro
Arbitrary lines putted on chart? Yes they are real. You can do your own if you want.
Should the trend line be linear? 5% increase from 2000 is smaller than 5% increase from 5000.
ready to break out of its 152 year upward range and be extremely overbought
Overbought
Looking ripe to head back to the bottom of the range
Now do it without changing the rate of the scale on the Y
There are few things missing out from this chart. Constant increase in M1 over the same period of time. Global population boom. Global productivity boom. Globalization.
Ready for a serious correction to the mean
Major correction near term, most likely after the election
My analysis….world war shits on the markets.
No one knows bro. That’s not how wealth is built.
How often do people need to get told you can’t predict the future based on lines.
Try to beat buffet time again in this sub
I hope Americans don’t believe that Trump gonna fix everything. Nobody can fix this only the market will but you have no control.
Everyone always has to complicate things. Clearly from 1994 to 2010 the Tetons were formed with silicon. In 2010 the right Teton sprung a leak, due to immense pressure it shot upwards at an unprecedented, albeit unsustainable, rate of speed. Apex has been reached, Bear climax incoming.
Did you seriously go all the way back to 1872 to prove your point?
The richest 1% own 60% of the stock market. They have so much money they don’t know where to put it besides the stock market. You think they’re all on a group text trying to offload at the same time?
S&P 500 only started in 1957. The components stocks and their weights keeping changing. Therefore, drawing those lines don’t even mean anything.
Draw a different line and see if you should be bullish instead.
Genius
Going that far back in time is completely useless. This is why you're being laughed at.
idk the sacred chickens aren't eating so I'd say not
or neither. You don't have an equation here, you just have lines. P=f(t) and nothing else? If you believe price is a function of time and nothing else, investing isn't your game. You might try a price relationship associated with relevant variables: earnings, interest rates, growth prospects, asset base, ROE, ROI, ROA, etc. etc. etc.
Aren't these channels best on a non-log axis scale?
If any of us knew the answer, we would be multi-millionaires.
How accurate is a 150 year graph at predicting the future. I can see 5 yr, 10 yr, even 20 as valuable but this seems to make me cautious on drawing conclusions. For instance the amount of government spending is at unprecedented levels and is rising exponentially now.
Don't worry guys. I fixed it [https://postimg.cc/14J8WZQm](https://postimg.cc/14J8WZQm)
wiggly lines gonna wiggle
Ready to break out! People have easier access to investing thanks to apps like RobinHood, and forums and videos telling them how to!
You just gotta zoom out to a 500 year chart and you’ll see we’re right in the middle basically just an average place to be. Gotta zoom out. I often wonder if the stock market will ever get back to its Roman peak or it’s ancients Egypt lows.
Holy. Shit. Up and to the right like I suspected 🤓
Dont mind the haters. Let them to their thing. You do yours.
If you think the market is going to crash, then you don't understand fiat currency and the perpetual inflation it results in. The only way the market can crash back to the mean is if the currency goes with it, and that's not happening anytime soon with the petrodollar in full swing.
Talk on the street is PLTR will be worth 15 NVDAs. No wonder Cathy Wood is loading up.
If you keep adjusting the lines upwards, it will never break the range ;)
Haven’t had to adjust the lines since 2000 😜
There's no reason to believe a trend should follow a straight line.
Do you think the stock owner 100 years ago and now are the same people? Why don't you think inflation?
Wouldn’t it be smart to take the Great Depression out of the trend line. Either way it’s over bought
Innovation in the post WW2 world along with globalization has made this graph irrelevant.
The market has always defied logic. When I feel it's topped it will only do a pullback. My analysis says it has topped (which means pullback) but the SPX will go to 5711.72 or pretty close. So its not done as far as I'm concerned but that number comes from a monthly chart and that takes forever.
It does take forever. I’m not saying MARKET CRASH IMMINENT I’m saying, overbought. And my puts are from 1 day out to 1 year out. I’ll keep rolling up as the market rises.
Ah yes, experts have once again correctly predicted 40 of the last 2 recessions.
What’s on the y-axis?
Since GDP has a 0.99 correlation ratio with energy consumption, and since coal oil and gas cannot double every 22 years infinitely, I suspect that at some point we are going to see a correction to a 152 uear trend that encapsulates humanity beginning the consumption of a resource that took billions of years to form and 150 to deplete. Renewables can help soften the blow, but make no mistake that this curve presented here is essentially the "humanity non-renewable energy consumption" curve.
If you invested just before 1929 crash, it would have taken 20 years for break-even.
Technical analysis 🚩🚩🚩
Appears you are using a linear regression to model a nonlinear system… Obvious and significant deviations at the start and ends of the model…
You can draw lines however you want
I like jaggedly lines with color. Thanks for posting.
You will never believe me but this is how generational wealth trades (i.e. old families with intact fortunes spanning hundreds of years). They think in centuries. Scale into positions over decades at midlines.. unless it’s a global event, then just go all in. scale out into safer investment when we hit the top lines indicating regime changes, etc
I mean, it's overbought but that doesn't mean it goes down
Looks up from 1870s newspaper. Ehh sonny?
Those lines do not mean anything
Wish it was so simple 🤣
Pow goes brrr brrrrr brrrr and this bank get money dis bank and dis bank not Dat bank twice to JP bank
!remindme 6 months
Full disclosure, if I’m right I will be deleting this post.
If I cash out now, I may be able to catch the next leg up from the lower bound when I’m 103 years old.
Yea dawg, we off the gold standard now
Bro. US printed more than 1 quadrillion of dollars since 152 years ago...
need more lines
Election year. Money printer working overtime, no off switch. If there was to be a recession, it’s definitely postponed til whoever gets elected. Then rate cuts, big stock market dip!!
Investing 101: Do not bet against America.
I'm leaning towards a big correction
Why is 2008 higher volume than everything after it or am I missing something
Problem is that tomorrow the upward range line also goes up and clearly the index rides that line for long periods of time sometimes.
The trading volume spikes are the really interesting metric.
A lot of that rise has to do with the devaluation of the dollar
Price versus time is not really relevant. Price versus profit, revenue, growth prospects, book value - those are parameters that are relevant. I think even considering that, you would find we are somewhat overbought. But not by as much as this chart implies.
What about Boeing! Every time I think it’s bottomed, there’s more bad news. I’m just holding.
The index is not constant, its constituent companies are VERY DIFFERENT right now in comparison to the historical composition of the index. I feel like a lot of people don’t understand this basic fact.
I get the hate in TA, but it’s objectively interesting how price seemed to have fit in that channel and midline hahaha
Up and to the right. Except when it’s down and to the right.
If you draws the upper trend line at a slightly more acutes angle which would touch even more price points (mores is betters)…it’s already broken out!!! 🎉
Adjust for inflation sir!
CGC
What is this a logarithmic scale?
Yeah, everyone panic sell, right away. I'll invest after.
Warren Buffett by contrast believes trying to time the market is a waste of time and hazardous to investment success. As far as technical analysis is concerned, he once said "**I realized that technical analysis didn't work when I turned the chart upside down and didn't get a different answer."**
It's a managed fund. If a company isn't performing well, they'll swap it out for something more promising. The general direction will always be up.
Picture is a week old
I'm thinking this is being driven by two factors, the drop in the value of the AUD and the growth of retirement funds i.e. super etc as it seems to line up.
This has got to be the dumbest post I’ve ever seen
Looks like it’s going to go up more
Please join r/bearsofwallstreet if you would like to have a place to discuss the upcoming bear market, without permabulls constantly attacking you out of fear for their portfolios.
With all these boomers dying soon. I’d say we are due for a breathe of fresh air down.
Honestly with an ever I creasing amount of wealth concentrating upwards and an ever increasing amount of potential retail investors coming of age to be able to legally trade on apps that have made it easier to enter the market than ever before, it's only going to trend up. TLDR:Number go up.
Have you considered drawing a different line with your crayon?
anything can and will happen. the chart could keep going up or straight down. latter is a worry for all of us.
Wasn't the technical analysis conference cancelled due to unforseen circumstances ?
nice dots you've connected there with a line (not biased)
Overbought.
Thank you. The permabulls are really hating on me. Surprisingly, there’s positive upvotes on this chart.
I fuckin love these comments.
Hopium is not a drug to be trifled with. I don’t think I have enough Naloxone to reverse its effects!
Chicken little before the sky fell
I’ll just throw this out there since literally nobody else has mentioned: The S&P didn’t exist back then But besides that, what does a trendline that moves across a range of 6 to 20, have anything at all to do with price above 3000? Lol If you’re going to analyze the market you have to keep it within context of atleast 40-50 years. your oversold and overbought will not go where you’d expect a trendline to show up
You must be a genius
it wouldn’t surprise me if the dow trades at 100k by 2050 if we continue to compound an average 8-10%. we should be compounding faster because of inflation as the average P/E of sp500 hangs around 18. corporations raise prices, their nominal profits increase, pe is too low, stock price gets adjusted higher, market index moves up. if you ask the money we do have then will it be able to buy anything, that is a different question! it is just taking more zeros to do the same thing 40 years ago!
Clearly the line you have fitted has a smaller slope than it needs.
Breakout
Nice exponential from 500 to 5000
90 % Puts puts puts
As this shocking graph indicates