Why I think we are finally entering the blow off top stage 🚀
We've discussed the meltdown before-now, there's evidence of the final leg 📈
Its been a good ride 🎢
We have been enjoying the easy ride market for nearly 3 years now. The July 2024 Japanese Yen scare, rattled the markets and provided the first major evidence that there were cracks in the market. Then, we experienced extreme volatility downward in late December 2024, a reminder to investors that assets do in fact go down as well. Now we have talked extensively about a melt down event, a situation where assets drop rapidly. But before that, I speculate a “blow off top”.
A blow-off top is a short lived parabolic pump in the markets. Peak euphoria is achieved. Undoubtedly my bearish posts on TikTok will receive lots of negative comments, particularly from newer investors that never directly experienced major events, like the 2008 stock market crash (yes, I was there for that and it was my red learning years). I’m mentally prepared for that…I got the same hate in 2022 with the meltup forecasts and plenty of hate in 2021 calling crypto crashes. Blow-off tops usually occur due to excessive optimism, speculation, and sometimes a last surge of investor excitement
Blow off tops vary in duration, from a few days to a few months. The 1987 blow off top rally, leading into Black Monday lasted approximately 3 months. Considering the leverage difference between now and then, I speculate our run will be shorter. Longer term blow-off tops lasting several months are rarer, but can occur. Gold in 1980 pumped for more than a year. Short term blow-off tops typically occur in more volatile assets, such a crypto. It’s a lot of fun….and then it’s a lot of not. In both of these instances, and several other examples, the market traded sideways for an extended duration before recovery occurred. And yes, I do think we will have another bull market after this large crash.
The trading action the past 2 weeks has now provided strong evidence we are in the final leg. There is ample evidence to support a serious market downturn, which we have already documented.
So what are the clues? And what should we do? 👀