The Bubble Timeline
For the markets, the next couple of weeks will be the most instrumental of the year.
As forces line up for this decisive time, the direction, up or down from here for stocks is in focus. And, a big Chaos moment is becoming more likely with the breakdown of the Fed’s reputation via actions by some of its Governors and the fact that those actions were allowed by Powell.
As to the time line for the last stage of the Bubble and looking back at the past 18 months we see some reference points for the Bubble formation.
February 24, 2021 was the beginning of the final stage of the Bubble:
You will recall February 24, 2021 was the start of the final blowup stage.
June 29th 2021 was the momentum Top of the Bubble:
By looking at the VIX (volatility) we see that June 29th 2021 was the bottom of the low volatility period, kind of the top of the bubble as hubris on the part of the bulls took over.
October 28 – November 2 should be the start of the Climactic end of the Bubble:
Moving forward towards viewing a symmetrical pattern, taking into account the dates of the start and top we would expect that around November 1, there will see a major climatic finish to the bubble, with stocks declining and interest rates and the dollar moving higher. This will lead to a prolonged period of deterioration of stock prices as various factors become involved over coming months.
And don’t forget, September 23rd 2021:
This was the “Hammer Day” when things started to unfold more dramatically.
In the meantime, the market crowd that has been bullish on stocks and bearish on the dollar will try to prevail, but the new pattern has been put in place.