Nasdaq to follow Silver and decline 30%+?

silverndxdoubletop years apart feb 8

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When assets reach prior highs, its time to pay attention from a Risk On & Risk Off basis.

The chart on the left is Silver, going back to the mid 1970’s. As you can see it reached $50 in the early 1980’s and then quickly reversed, losing over 90% of its value in the next 14-years. Then it embarked on a rally, starting in the early 1990’s. This rally took Silver back to the $50 level in 2011, which ended up being a “Double Top” nearly 30-years later. After hitting the $50 level again, buyers disappeared and sellers stepped forward.

Selling pressure ended up driving Silver down 65% in four years, after it hit highs reached in the early 1980’s.

The chart on the right is the Nasdaq 100, looking back to the early 1990’s. The Dot.com bubble peaked in 2000 and tech stocks then proceeded to fall 90% in value over the next few years (nearly the same percentage as Silver’s decline). Turning the page forward, the Tech stock rally over the past few years, has pushed it back to the levels it hit, at the Dot.com highs in 2000.

Last year Tech stocks had the chance to break above 2000 highs and at this time, looks to have failed. Now it appears that the NDX created a “Double Top” 15-years later. Sellers stepped in when Silver double topped 30-years later, will sellers do the same in the NDX?

The Power of the Pattern in 2011 suggested that metals could fall for years to come, due to the double top in Silver and a topping pattern in the Swiss Franc (see post here).

franc suggesting gold down for years to come  feb 9

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If this is a “Double Top” in tech stocks, will they decline as much as Silver did? Humbly that is a great question, that will take some time to answer. We do know this; a potential double top in tech could be in place and support is breaking. Billions of free thinking people matter and how much selling could take place, is impossible to predict.

Due to this pattern in the NDX, Premium members are short the NDX, owning PSQ.

It took Silver around 11-years to rally from its 2000 lows to 2011 highs, to create the double top. The NDX has rallied strongly for the past 11-years (2003 lows to 2015 highs) which took it back to its 2000 highs. No one, including us has a crystal ball, that knows how much selling pressure will or won’t take place in the future. I suspect many doubted that Silver could fall 65% in 4-years, back in 2011.

The pattern in Silver and the NDX is NOT a exact repeat, some things do look a good bit similar. Odds remain are low that the NDX, follows Silver pattern exactly. The impact would be big if it does. Caution friends!!!

 

Gold Bugs and S&P 500 break 5-year channels at “Same Time!”

spx gold bugs breaks 5-year lines at same time  feb 8

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S&P 500 has created a series of higher lows and higher highs for the past 5-years! Some would define this as a bull market.

Gold Bugs Index (HUI) has created a series of lower highs and lower lows, for the past 5-years! Some would define this as a bear market.

Hey friends check this out; It appears the S&P is breaking 5-year support and the Gold Bugs index is breaking resistance, at the SAME TIME.

“Super Trends” coming to an end?  The Power of the Patterns suggests that if these support/resistance lines get taken out, this could be a pretty big deal friends!!!

Full Disclosure…Premium Members are long Silver.

 

Nasdaq closes below 5-year support line, DAX doing the same!

 

dax ndx break 5-year support at same time feb 8

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Two leading indices, Nasdaq 100 and Germany (DAX), look to be doing something neither has done for the past 5-years.

The Nasdaq 100 last week looks to have “closed below 5-year rising channel support” at (1) above.

At the same time, the DAX index from Germany looks to be breaking 5-year rising support and its 38% Fib ratio at the same time at (2).

We haven’t seen this in 5-year friends, this is a big deal from a Power of the Pattern perspective.

joefridayspxndxrepeatingtoppingpatterns feb 5

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Last Friday, Joe Friday shared that key topping patterns looked to be taking place in the S&P 500 and NDX, with monthly momentum at levels last seen at the tops in 2000. (See post here). Joe shared last week that a break of support could take the S&P 500 down to the 1,600 level in short order.

Full Disclosure- Due to these patterns, Premium Members are short the S&P 500 and Nasdaq 100.

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