Since 2014 when I first started my twitter I have seen crash calls after crash calls after you guessed it, more crash calls. Meanwhile the market is up over 50% since then. To be honest I have never been a fan of making outlandish calls to one day get 1 out of every 50 correct. That's just not the type of trader I want to be, and truth be told I wouldn't even know how to position myself to trade a crash call like that. Even if a trader is right about a crash in history it has been extremely hard to correctly time such a call meaning you have to position and size perfectly to be able to take on lots of water, stay calm when the markets going against you, and patient as ever. In my opinion a fraction of a number of the best traders in the world can correctly time and position for a crash correctly. I am in the business to generate wealth over a longer period of time, not get my name published in the news because 1 out of every 50 crash calls are correct.
Now with that said that doesn't mean that I don't turn bearish at times because I certainly do. In fact heading into the end of 2017 I flipped from bullish to bearish and In January 2018 I brought up to my members that I am expecting a sizeable pullback. Fortunately that turned out to be correct. Once that was seen I mentioned a Elliott Wave triangle that would call for the S&P to rally towards 2900-3000, that worked out well. From there the expectation was for another period of weakness and one that was much more than early 2018, this also worked out well. Now at this point you are probably thinking this guy is an asshole and he just wants to gloat. That is hardly the case, I never expected the 19% rally that we are currently seeing. In fact my target was around 2200 while we only saw 2350 that bottomed on December 24th 2018.
Now their is a lot of debate and arguments on twitter as to if we crash 50% or if we go to 3000+. I am somewhere in the middle, I do not expect to see new ATH quit yet and my current lean is still that sometime in 2019 we will break the December 2018 lows. This rally that we have seen has been extremely impressive and one that I tried to short and was burned on.
Over the weekend when I was doing my weekend research I found a correlation that I felt was quit significant and made me scratch my head. When you overlay the Nifty 50 and SPX (as below) you can clearly see they trade very similar to one another. However you will also notice while US Indexes are running like their is a candle flame under their ass the Nifty is not. In fact it is struggling big time.
Click here to enlarge: Chart Link
The US markets have been digesting a lot of different information that has been thrown at them the last few months. The Nifty is probably a much more realistic look of where the S&P would be if it wasn't for the Fed to step in and support it. India is a major source of global demand growth and I just cannot ignore this bearish consolidation on the Nifty 50 since October.
The Nifty is by no means a timing signal for how to trade the S&P but if the Nifty takes another leg down here soon what do you think the US Markets will look like?
Click here to enlarge: Chart Link
Above is my personal take on what is a possible outcome for the Nifty 50 and by no means is this a crash call for the US to have a financial reset/depression. I am clearly making this post to rant because I have nothing better to do and to make my case for the Nifty 50 failing lower and the US Indexes to catch wind and eventually follow.
I hope you enjoyed! Thanks for reading!