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Recession in 2020? Technical or Fundamental

 

If you have been reading the headlines lately, something would have come to your attention, several prominent economists and investors are calling for a recession in the year 2020. Market is a product of many participants, some trade on Fundamental grounds and some trade on Technical or a combination of both. Many keep calling and saying that only Blue skies are ahead for the US Economy, many believe the US President is responsible for the latest rally in the US Indices and many of the big stocks. The Fundamental argument is that the latest economic expansion is too good and consequently will leave Federal Reserve with no other choice but to raises Interest rates to cool the economy down which can creates the housing market to slow down and also investors and consumers to get out of the long side.

We are seeing all time records low in unemployment and rising wages which should create inflation and again pressurise the FED to raise interest rates, a lot of speculations there, Honestly, it can happen and even when we do not follow or use Fundamentals in our trading, we understand how it works, but when we see the Technical analysis supporting this argument, it gives us more conviction  For years, we have been telling members at  that something will happen in 2020, either a Financial crisis or a US Constitutional crisis, we don’t know exactly what it would be and we are not in the business of guessing that either. We believe that World Indices will end the cycle from 2009 at sometimes around 10.2020 in which case a Mid level correction will take place or a huge correction, the degree is unknown, Indices like $XJO-ASX which is the benchmark of the Australian equities will be the key to determining the degree, the Index should be reaching the 7322 area by 2020 and breaking the peak at 2007 will create a Bullish sequences against the low at 2009 and then Bulls will be in control. The Following charts show the Grand Super cycle and the Super cycle in the Index. Please note that numbers represent swings count and not Elliott waves count.