This is a global equity story. Not just the US. Indian benchmark indices touched all time highs today. Watching ETNOW and CNBC in India is funny. Their condescending opinions about markets are the daily dose of entertainment for me. Even more amusing is how the opinions turn on a dime day over day. With all due respect though. It's a tough job they have. I wouldn't fair better in all honesty.
RSI was made to be used in a rangebound/sideways market environment and not on a trending chart like that. It'll give you multiple overbought situations and divergences. Picking a better tool can enhance your predictions. We often go into depths and forget the basics. No disrespect. Cheers mate !
Kaustubh
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@ParthLongani, You may have a point there. Thanks! What do you make of this chart though? I know it doesn't necessarily mean a correction or a top. That was not my call in the first place. But may be a consolidation? For the most developed market to go up like that definitely means bubble to me. I can understand if EMs and FMs go up like that. This seems to be a structural problem. I am kind of mixing techs and fundamentals but that's the way it is. Cheers!
ParthLongani
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@Kaustubh, At all time highs, all the oscillators and other indicators wont tell you to sell. In order to pick the top, in my opinion only theories of Elliott/Gann can help us. Such steep upmove was witnessed before the Great Depression of 1929. Honestly, I am very bearish for 2018 and 2019 (I've already sold whatever I had) The top of September 1929 will complete 89 years in September 2018. But adding a Fibonacci number is not enough to call a collapse in world economies Lol ! But there are other patterns which are shouting me to sell (sorry cant disclose those) The next correction is not going to be bad, it is going to be UGLY ! But not sure whether it is going to be 2018 or 2019.
Global economies are sitting on massive debts with US leading with $20 Trillion. Federal Reserve consistently rising interest rates. Brexit in 2019. High yields on Bonds. Slowdown in China. Geopolitical tensions. Domestic problems being 2019 Elections, Bad Health of the Banking System, increasing Fiscal Deficit (High prices of Oil and Gold) Not sure what will be the excuse for the next bear market. Let me know your thoughts on this.
Kaustubh
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@ParthLongani, My thoughts are not entirely different than yours. But sorry, Ellliott waves is a hoax. Only right is hindsight. You can renumber the waves any which way. We can agree to disagree.
Anyhow..I have sort of investigated fundamentals and quants for living. And technicals for thrills. So I would agree with you mostly.
All the problems you mentioned are not new. The only problem is insane liquidity. When that runs out, we'll have some bad shit hitting the ceiling all at once.
But it's complicated issue.
As for India, yeas, I am very bearish.
For all the stupendous returns, we haven't done any better than EMs as represented by MSCI EM.
So not so special after all. The political situation is definitely a massive problem no matter which way one swings.
But the markets are drunk. And this is not the first time.
The problem goes back to mid 90s at least. To LTCM days when the Fed first got involved. After that dot com happened. Then the subprime. Each one worse.
The next one would be truly disastrous I think.
We'll see when.
Right now I like USD. IT and PHARMA if we must in Indian equities.
I have a portal where you can analyze these things yourself.
Try it on your computer (small screens don;t render too well) and let me know if this is useful. Or if you have any suggestions please.
This is free. So no worries.
Cheers!
ParthLongani
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@Kaustubh, congratulations! great job done there. I am devoted to Technicals but I know a few who might like the website.
neneram
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Well weekly RSI has gone above 90 , Absolute riped for correction followed with new HIGH
Kaustubh
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@neneram, yes. I am not calling top. But the more it goes up the scarier it gets.