When to short stock market and when to buy Bitcoin
In this particular video, we're going to talk about an important signal, potentially important cell signal that could get triggered on the stock market very soon, if not potentially today or tomorrow from really from about here.
So I've been short in the stock market really from this region. As you can see here currently sitting in about a 2,600 pounds profit. Just let me know, I only risked about 300 pounds when I began the straight, so that's a better risk reward if nine to one which is not bad at all. And by the way, in our member videos, I've been calling for a stock market drop. Really from about here. Again from this stock market was about here, I've been warning about a potential drop in the stock market. So we've been ready for this for some time. The bottom line is that now we've had this drop.
What could this potentially mean? Well, there is an important signal that almost every chartists and every analyst knows about and that's called the Dow theory cell signal. The Dow Theory Cell Signal, put it very simply and plainly is this. Firstly, you need at least a 3% drop in the s and p or the Dow, but mostly the s and p. And once you get a 3% drop, then you need the 3% bounce. We should have it as well. So we've had both the drop and the bounce. Now for the sales signal to take effect, you need the s and p and one other market, which I'll tell you about in a few moments to then to drop and then take out the lows we made before before that prior bounce. So in other words, for the sales signal to get triggered, we need the s and p to drop, which it has done, but also to take out the Lowe's it made on the first prior drop that you see right there.
And not just the s and p, but one other key markets, which is the Dow Transportation Index. Now if you've been watching our previous videos, you know this by now because I've been mentioning this Dow Transportation Index for quite a quite a long time. Let's go on this week. He chalked now in a previous video, you may recall, I mentioned this, that this is a leading indicator. Why is the doubt transportation the leading indicator for the economy and the stock markets? Because when anything gets manufactured, it has to be shipped and transported. Remember there are companies that make stuff and there are companies that take stuff. Therefore, transportation is very sensitive to shifts in the economy. And look at this, the doubt transportation index has now broken and important supporting trendline is, you can see right there, there it is. This week we broke that trendline. That's not a good sign by the way, for the economy or the stock markets, which means we're beginning to see the first leading signals of a major drop in the stock markets and indeed potentially a recession down the line as well.
So here's the thing on the dow transportation, we just go to the daily timeframe chart. We have actually seen already the cell signal on this. So we've already had a, at least a 3% drop, at least a 3% bounce, and we've taken out that previous prior low. Okay, so the Dow transportation seems to meet the requirements for the Dow Theory Cell Signal, by the way, not just the doubt transportation, just to mention quickly small cap stocks. The Russell, the Russell also had a major drop yesterday as well, which does not looking good either, but in any case, what we need to see now for the Dow, the resell signal to be confirmed if it hasn't already been confirmed, is we need to see the s and p follow through lower and essentially the takeout those lows that we see here. Okay. Which I think is quite possible in the problem in the next few days.
So if the s and p now follows through lower and takes out those lows, we made a couple of about a week or so ago, especially the August lows than the Dow theory cell signal could actually come into effect and become confirmed, which means what? Essentially what it means is that the stock markets could be due for a much more significant drop. Let me just go back a little bit. In other words, what we could be seeing is a minimum of 10% at least a 10% correction or drop in the stock market, which means what? Which means that by the end of this year, we could see the stock market essentially. Uh, well, we'll see this rally here. This is the rally that started back in from December and continued all the way to more or less July, August, we, Quincy, the stock market's wiping out and date to put it to less politely, uh, excuse the expression, but essentially pooing on this entire rally, if not the entire rally, but at least the most of it.
The smart way you should try to start Bitcoin trading with small amount of money
I would say at least a 50% to 60% of this rally could be wiped out potentially by the end of this year. So we could be setting up for a major drop down the line here. Now, four months ago, I showed you this video and here's the video. You can see here is this chart warning of a recession. That was back in March when I posted the video. And in that video, I warned of a potential recession. In fact here, the chart I was talking about, about the yield curve inversion, and funnily enough, it is only now that the mainstream media is finally talking about this. In fact, here's CNN last night, finally talking about this yield curve version and recession warning. Here it is very quickly
fears of another recession causing panic on Wall Street. Today the Dow taking a dramatic tumble ending the day down more than 700 points at the closing bell, 800 there on the chart right there, the huge slide was set off by one single warning experts, say a specific economic indicator that is historically predicted oncoming recessions and measure that flashed a red warning light for the first time since 2005
which is the inverted yield curve. And what that essentially means is that it costs less, it costs more for a borrower to borrow over a shorter amount of time, then a longer amount of time. That is an unnatural state of affairs. And if you take a look at this chart, recessions have followed each time we've had an inverted yield curve. This is very troubling to the market.
Alright. So as you heard there, they were talking about, uh, essentially what we've been talking about in our videos for several months now. And guys, let me say this. If you want to know what's really happening in the markets, keep watching our videos and you know, keep watching our channel because the mainstream media is lagging way behind the markets. Now here's the question. The question is, if indeed we're getting these recession warnings, then what could it mean for the stock markets and for potentially Bitcoin as well? Now here's the thing. As far as the stock market is concerned, we've seen in previous times that we usually, when there's a yield curve inversion, and when we see this recession warning, there can be a delay or lag of time before the stock market crashes. For example, 10 years ago or over 10 years ago, the recession warning came in 2006 and the market actually continued to rally higher before it crashed.
Okay? So sometimes there's a delay of about 12 months before the stock market crashes. Okay. Back in the year 2000, it was actually a bit more quicker. So the recession warning came very soon close to the actual crash that occurred in the stock market. So sometimes it's quick, sometimes it's about a delay of about 12 months. The fact that it doesn't really matter because the stock market usually tells us what he wants to do. So that was back in the last couple of recession warnings. What about, let's say bitcoin truly, we don't know how bitcoin reacts in a recession. The last time we had a recession was back in 2007 2008 and guess what? Bitcoin did not exist back in 2007 2008 so nobody really knows for sure how bitcoin acts in a recession. However, I did make a video a several months ago about what could potentially happen to bitcoin if a recession and a stock market crash occurs.
Um, what I said in that video was, I don't think a recession is a good thing for bitcoin. If you want to know the reasons why, go ahead and watch that video. I don't want to go through it all over again. But I personally think that a recession once it starts and once we hit through a full on recession, I personally think it could be a negative for Bitcoin, not a, not a positive. Now that might be a good thing or a bad thing depending on which side of the equation you're on. If you're, if you're looking to buy bitcoin for, for the long term, having cheaper bitcoin prices actually might be a good thing. I don't know why anyone would think that's a bad thing. Having bitcoin prices cheaper, a lot cheaper would be a good thing for the longterm. However, I should say that not everybody thinks that the recession is going to be a bad thing for a bitcoin. And again, um, my friend Zach mentioned that in the previous video as to why he thinks that a recession might be a positive thing for bitcoin. So that's an a, that's a, that's a different theory altogether. All right guys, so I don't want to make this video too long. That's all I want to say is that potentially very soon we could be getting that dow theory cell signal getting triggered. If not today, perhaps by the end of this week.