The Ghost of Irving Fisher Returns?

So many market cliches have been used to describe markets over the years. These include Goldlilocks, the Fed Put, irrational exuberance, don't fight the FED, don't fight the tape, etc. The aptest phrase for today's markets is the famous quote from economist Irving Fisher in October 1929 right before the Great Depression of the 1930s set in:

"Stocks have reached what looks like a permanently high plateau"

                            Source: Market Cycles Chart - New Trader U

Of course, central banks have a plethora of unconventional monetary policy tools at their disposal to avert major crises these days, but valuations are quite stretched.

Interesting Market Views

 Here is a midweek take on markets from the pros I follow on Twitter:

✔️ #SPX S&P 500 repeats patterns from 1929, during the Great Depression https://t.co/6pe9ks71Mo

— The Tradable (@TheTradable) September 29, 2020

Remember problem child Evergrande? https://t.co/evKBwpkX9f

— The Market Ear (@themarketear) September 30, 2020

Credit protection - another move higher https://t.co/mXhKkzIuSQ

— The Market Ear (@themarketear) September 30, 2020

S&P 500 Bollinger Band Percent - no buy signal using Bollinger Bands on the daily chart - 3355 - 3365 key for Bulls to take out, for more up. A move under 3322 for an hour is a huge negative for this move up and suggests a failure. End of Quarter today. pic.twitter.com/f0vDEG063m

— David Larew (@ThinkTankCharts) September 30, 2020

China composite PMI vs Copper prices pic.twitter.com/tdHxnmd56o

— Callum Thomas (@Callum_Thomas) September 30, 2020

Transports testing top of the 5-year trading range. Its run out of gas three times near $200. Will it be different this time? https://t.co/U3R7eurYVh$IYT $SPX @MarketSmith @InvestorsBusinessDaily #IBDinfluencer #IBDpartner pic.twitter.com/yCQx40xIBM

— Chris Kimble (@KimbleCharting) September 24, 2020

Comparison of the Environment during Major Market Crashes to the Market Environment Today

Global Economic Downturn Ahead?

Major Sell Off Coming?

Chart of the Day - Great Depression of the 1930's

The chart of the day is courtesy MichaelMarkowski.net via Seeking Alpha and shows the stock market crash during the Great Depression of the 1930's. Are we going to have a repeat soon FED QE's not withstanding?

Early Signs of a Deflationary Collapse?

Some interesting developments are playing out in long term charts that make me feel comprehensively bearish over the long term:

a) Firstly a massive rising wedge  has formed on the long term S and P 500 chart. This is much bigger than that observed in 2000 or 2008 and has started to break to the downside which could have profound consequences. A major bear market could ensue post the break. Chart courtesy StockTwits.com:

b) Secondly Margin Debt is at record levels and has eclipsed levels seen during the maniacal peaks of 2000 and 2008. Once the above rising wedge breaks you could have a rush for the exit triggered by margin calls. Chart courtesy advisorperspectives.com:

c) Thirdly despite multiple dosages of Quantitative easing (#QE) from global central banks the velocity of money is below the levels observed during the Great Depression. This implies that changes in money supply will have little impact on the economy going forward. Further QE's are likely but won't really stimulate the global economy. Chart source armstrongeconomics.com.

The above developments taken together with ongoing bear markets in several key asset classes  make for a deflationary collapse increasingly likely in the not too distant future.

Why I am Ultra Bearish Long Term from Rajveer Rawlin

Deflationary collapse up coming? http://t.co/wiJoi1PQfi pic.twitter.com/Z7otAmPEF5

— samuelR (@RajveerRawlin) September 7, 2015