How deep is the first support?

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I have lots of technical and fundamental reasons that this correction will be different and is going to be more than 10%, you will see the technical reasons in my charts. Let’s review the fundamentals:

1- The most important factor is limiting margin for hedge funds by banks, after Archegos capital management phenomenon..!

2- The Buffett Indicator was at elevated levels before the dotcom crash of 2000 to 2002, and before the financial crisis of 2008, but at respective values of 137% and 105%, lower than today's reading of 157%.(Stansberry research)

3- Americans are now holding more money in stocks than ever before... and that includes the peak of the dot-com bubble.The data is from JPMorgan Chase and the Federal Reserve. It includes any stock that folks may hold in 401(k) accounts as well.
Right now, 41% of our financial assets are allocated to stocks. Again, that's higher than the dot-com peak of 37%.

4- Constant money out flux since early 2021 which decreases the trading value in more than 95% of stocks!

5-Margin debt stands at $822 billion – an increase of more than 25% since September of last year.(Stansberry research)

Conclusion: Any factor that limits new money influx will have negative effects on markets, and Bubbles always burst when they have their biggest size!

To protect your capital:
*Use tight stop loss even for your long-term investments.
** Hedge your positions using inverse ETFs like SQQQ, SPXU,…
*** Always accept the loss when it is small, if it becomes bigger it will become harder to accept!

The above charts: show Nasdaq/ Gold
Below charts: show Nasdaq

Can we use Nasdaq/ Gold ratio as a prospective indicator of a market top?

If we are looking at the 2 previous major market top (just before the crash happened) in 2000 and 2007, we easily can see in 2000 the market top and the Nasdaq/ Gold top happened at the very same time. Moreover, in 2007, market Top happened in late October 2007 however Nasdaq/ Gold ratio top happened in mid-July, almost 2 and half months earlier..!

Now we can see why gold is called safe heaven, and we should monitor its price movement in the coming days.
Moshkelgosha



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