Markets Update…End Of The World History Chart : 2021 Edition

We hear so much negativity from both sides of the isle that if a Republican is elected to the presidency then everything is going to hell in a handbasket and if a Democrat is elected then you will be better off to find another country to live in because things will be so bad in the US you won’t want to live here anymore. Conspiracy theories are running so rampant right now that the average American doesn’t know what to believe.

Besides the stock markets giving me financial freedom it has also taught me how to think for myself which can be pretty tough these days. You’ve heard me say this a million times, “playing the stock market is a game of psychological warfare more than anything else.” A good example right now is how most members keep wanting to short the stock markets because everything they read says the markets can’t keep going up for a myriad reasons.

The Great Rescission that began in 2007 and lasted until early 2009, scarred many investors for a lifetime. I saw the same thing with my dad who grew up in the Great Depression. During the 1990’s bull market, which was the greatest bull market of all time at that time, he could never understand how the stock markets could keep going up because of all the fundamental reasons he thought should stop secular bull market dead in its tracks. We had some great debates on the direction of the markets but I wasn’t scarred emotionally by what happened in the Great Depression so I had an open mind and could view the charts with an objective point of view.

One of the hardest things to do as a human being is the ability to change how we perceive things once they become ingrained in our psyche. We are who we are by everything that has ever happened to us which makes us a unique individual. The thing is the stock markets don’t care about our uniqueness it only cares about taking every last penny it can get from you.

Here is a  Market Update I did on Election Day November 3, 2020, which shows the End of the World History Chart.

November 3, 2020:

I’m headed out to do my civic duty and vote. I have no idea how long it will take so I’m going to post this chart now.

For those that have been with Rambus Chartology for a while know about this long term monthly chart that goes all the way back to the late 1970s which I call, The End of the World History Chart. It is a satirical look at all the important lows that felt like the end of the world if you were trading back then. Every time there is an end of the world type of event I just add it to the chart to see what happens. The 2020 crash was the latest end of the world event in which I stated, “end of the bull market or a great buying opportunity,” shortly after the low was in place.

The center dashed midline has been holding resistance for the last 20 years or so. I can’t tell you how long I’ve been waiting for the breakout above that 20-year center dashed midline which I believe could lead to a rally up to the top rail of the major uptrend channel similar to what we saw back in 1995. When the center dashed midline gave way back in 1995 that was the beginning of the parabolic rise into the 2000 secular bull market top which took five years to complete. It is simple, above the center dashed midline is bullish, and below is bearish, everything else is noise.

I recently added the presidential cycles to this chart so you can see how the COMPQ responded to a Republican or Democratic president. I won’t go into detail as it is pretty self-explanatory. The green shaded areas show what the market did when a Republican was in office and the blue shaded areas show what the stock market did during a Democratic president.

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