2022 MARKET CRASH: GREAT DIVERGENCE - When will MARKET CRASH?
Perfect HISTORIC TRADING ANALOG
Hey guys, what's going on. I've been getting a lot of requests about Leo. Tell us what the market's gonna do next. Tell Leo, tell us how to trade this thing. Band. We, whoa. We wanna put some trades like your students do taking 20 K to 258,000. And in a matter of a couple of weeks, guys, this opportunity that we're faced with right now is actually way better than 20 K to 258. K, this opportunity right here, if you pay close attention to what I'm about to show you in this video, which what I'm about to do specifically, I'm about to show you the great divergence, but from a fundamental and technical stack point, I'm also gonna show you a precise historic analog of what actually happened next in the stock market. So this video is highly useful to you. If you're long term trader meaning, you're trying to figure out what's gonna be happen in the market for the next 12 to 18 months.
It's also highly important. If you're trying to decipher what's gonna happen in the market in the next 30 to 90 days, if you've been following 13 market moves, uh, for while you know that we are very good at finding historic analogs that will reveal what will actually happen in the market next, and in this particular video, we're gonna show you the exact timeframe in the history based of multiple characteristics, which I will break down to you. You, that will pinpoint to a high probability of what will actually happen next. So if you understand this, and if you understand the correlations, um, instead of trying to put together a hundred charts here and make it to a five hour long video, I'm gonna try to nail it in 20 minutes. So I mean, not be going, do as much detail as I'd like to on some of the subjects I'm about to discuss.
Uh, but bottom line is if you're trying to make money as a trader short term, all long term, okay, there's some insights that are gonna be highly useful to you here. So let's go, uh, the recession is already here while most of the wall street analysts are still blind and clueless. And the reason I got this particular side in green guys is because current market conditions represent huge money making opportunities and definitely not on the bull side. So if maybe you predominantly have been able to make money as a bull in the last few years, he goes, Hey, all you had to do is just buy the fucking dip. Okay? Uh, you may find yourself in a situation where buying the dip no longer works or no longer works based on the timeframes that you've, uh, been successful with. So I understand for every balance, there is a drop for every drop.
There is a balance, but there's certain instances where, especially if you're playing short term against the market, those are gonna be your most lucrative opportunities. And I'm about to break all of, of this stuff down. So if you've been a bull pay very, very close at attention, because the money you're about to make on a short side, meaning profit from when market drops, okay, it's gonna make your gains as a bull, make like a penny in relation to a million. So I mean, forget about all these bullish profits, okay. They trust me, there's not a bull ever in the history of the fucking stock market that have out traded the bear based on percentage basis. And this goes against everything that, you know, because initially most of the people that are initially bull, but it has always puzzling because you cannot cheat the simple math.
You cannot cheat the math in weekly options. Okay? Things drop a lot faster than climb higher and it takes things for a lot longer timeframe to climb higher. So when we're talking about specifically trading options, okay, this market conditions that we're facing right now, extremely lucrative. So if you've never made money, when the market actually drops, be very close attention. And if at any point, if you go through this information, you still have questions. Feel free to go to 13. Market moves.com, schedule a 20 minute. We can call it with the senior trader here. So we can actually help you take advantage of its right market conditions. So this is what's about to happen. Okay? The question you should be asking as a trader right now is what happens when fed money printed machine breaks. Now, this is a crazy quiet to ask because clearly the objection to that would be well.
What makes you think that the print machine will ever break? I mean, we've been printing money here in the United States forever and fucking ever, and it hasn't failed yet. So what makes you think that this print machine ever break? Well, there's certain conditions that are currently present that point to this fundamental flaw. So what is this fundamental limitation? What is this fundamental flaw? Well, the simplicity is this. I mean, so damn simple. That wall street is just, can't freaking look outside the box and see it. This is how the market has conditioned them to buy every damn dip that the absolutely neglected fundamentals, the fundamentals are such that no matter which debt you look at, whether you look at government debt, corporate debt, personal debt, it's at the highest fucking level, whether you like it or not. And government spending, which have been driving this economy through COVID through the last couple of years, it cannot be maintained if rates go higher.
As a matter of, I would argue based on everything we research here at 13 market moves is that if United States treasury yields were to go above 5%, it will be our mcg. And let me break this down. So currently we'll look at, at 30 trillion in debt, which some of it was finance at as low as a quarter point. Now 10 trillion of these debt is short term, which means average term of that debt is about three years. If interest rates actually go up to about 5%, just in interest rates alone, we looking, or the government is looking at spending one and a half trillion a year now to put this in perspective, the entire tax collection, okay. The entire tax collection for the government is about 4 trillion a year. So when you put this 1.5 trillion, if the rates go to 5%, okay, I mean, this ties up 40% of tax collections, which means you cannot spend as much on military, which that would be a devastating time to actually spend less on military, uh, by just approved the largest mil spend and bill ever in the history of the world.
So that would be very difficult to maintain going further from here, if interest rates actually, uh, going higher and certainly would be incredibly different and incredibly difficult to maintain it. If it freights got a forbid, moved to seven and a half, because then at that point expenses on interest rates along annual looking at like 2 trillion at 10%, you're looking at 3 trillion and at 12.5%, it is absolute arm getting okay, because at that point, when you combine the aftermath of what also the corporations are gonna be going through, the government could actually be collecting less in Texas, then what it would pay out in interest obligations. So this has never ever happened. So when we're talking about interest rates, a lot of times people will talk about 1980s, which we will glance about shortly. But this fan that we're dealing with right now is nowhere serious about lifting this rates because they know that if rage go to 12 and a half, God, if rage go to camp or sand, okay, it's oh, there's gonna be no fat.
I mean, this, this is a collapse of historical significance that we're possibly looking at here in not so distant future. So you may be highly skeptical of this, that I would actually predict an Armageddon here. And I think the only logical solution to this is that federal reserve will actually, after raising interest rates, a couple of times, maybe a quarter point, it will actually slow down because they have no all that alternative. So basically what I am saying here is the fundamental flaw is the government cannot service its interest rate expenditures. If interest rates go above 5%, they certainly cannot maintain the government spending at the rate that it, they have been doing it over the last 10, 12 years. And if the government spending be mainly attributed for the lower unemployment for the graph in certain sectors, if the government does not spend as much anymore, guys, all of this shit is going to slow down.
It's gonna slow down substantially. And therefore we're looking at a totally different big in the market, what we're currently looking at. So when you combine this again, understand that when insurance go up, a lot of companies that have been playing, uh, the rela with the market, meaning they've been actually borrowing money. One thing is when the company is actually making money and they decide, okay, we're gonna buy some stock back, which is still still manipulation, whether you like it or not. But there are companies out there because of simply of cheap rates, they win and borrowed a lot of funds and they bought back the stocks utilizing borrowed funds. Now that now works out, it may work out for a little while, but never stock at the end. So what I am saying this stock, this sort of companies that did borrow money and went and bought this stock, they will have to pay those loans out and they'll have to pay 'em while the businesses are actually slowing.
So, so the only ultimate solution would seem to be for these companies is to actually sell this stock. So not all the companies actually went out and borrowed money to buy their shares, but the ones that did, they certainly not only not going to buy their shares back in a longer, but they will also actually have to sell some, uh, because their profits are gonna be slowing down due to high rates. So understand this essentially what this means is on government level, the spending is decreasing on corporate level. The spending is decreasing. There is less, less drop, which leads to less profits, which ultimately leads to less tax revenue. So when we go slightly back to this slide right here, current tax collections of about 4 trillion could actually go down to let's say 3 trillion, but 2.5 trillion as the growth is slowing, uh, GDPs fall, it, the unemployment is going higher and I'm gonna give you some figures to back it up historically, why this actually has a high probability of happening.
So while we have high interest rates and increasing costs of servicing in the debt that the government has borrowed the highest ever, I mean 30 trail guys, that's not a joke. And we're looking at a situation where Jesus Wooster analyst, they're still saying there's gonna be no recession. Well, simple facts. I wanna break down first the stack inflation, just to make sure we're on the same definition we're discussing stack iation here. Stack iation is an equivalent of high inflation growth slowing down and higher unemployment rates. Now a low unemployment rate would be three, 4% on the five rate. 5% rate would be basically a dream for most of the countries in the world. And so we're currently at like 3.8 on, on unemployment. So unemployment is incredibly low, but the question to ask, what are the chances that we actually about have to roll into this ation type situation?
Meaning the inflation is gonna keep going higher. What, given that we've got an 8.5 for chant inflation number today, um, on April 12th. I mean, we, we definitely have a check mark here. Um, the slower growth, well, the earning season is about to kick in and I think this is also going to be a check mark and guys, as far as unemployment, that's easy. Okay. There's not much lower that you can go below 3.8%. That's about as good as it gets. So the probability of unemployment actually going high, higher above 3.8% is much greater than an unemployment actually going below 3.8%. So I think we're gonna be able to put a check mark here as well. So we've got this check mark. We're gonna add this check mark shortly. When we see the earnings reports from a bunch of companies in the next few weeks, and we easily will add this a unemployment, uh, higher unemployment rates within the next month or two, it shouldn't be an issue.
So we're gonna have three check marks right here. We're gonna be in a check mate. It's gonna be stack. And this is, this is the beautiful part about it. Like if you are a trader, okay, like, look at this goofball right here. All right. There's not even a hint of a crack in the labor market says Jimbo. Okay. So these dude is actually clueless. Okay. That he is the one, he's one of the Wolf analysts. That's gonna be losing his job. And he will be actually the reason why the unemployment rate is gonna be higher. Right? This guy's absolutely clueless. Okay. As a trader, you shouldn't be looking, oh, well this is, this is what the lay of a market is right now. Well, good luck making money with that as a trader, you should be looking at, okay, this is what M employ this right now.
What is the probability that from here, the unemployment is gonna go higher or lower and there's a 90% probability that unemployment is gonna go is gonna go higher from here. Not lower. I mean 3.8. That's about as good as the get guys credit Swiss. Okay. There's gonna be no recession until 2023, 2024, dude. Seriously. Okay. Before it's still late. Take 13 market moves chart course, please. Somebody send this guy a link, Jonathan goal of help him out. And I'm picking on these two guys, cuz there were just recent. I think those were yesterday, but there there's hundreds of these analysts, right? They're absolutely clueless. So my, my question is okay, if these guy at credit Swiss thinks that there's gonna be only no recession until 23 or 24. Okay. How much okay. How much is credits we is gonna lose based on this calculation guys, the losses are gonna be fucking phenomenal.
Okay. And the fact that he's not the only one has happened to have a picture of these guy, but I mean, there's again, there's a ton of wall street analysts that are unanimous, that there's gonna be no recession for another year, another two years and they're all fucking wrong because they can't look at at a simple chart. So let's look at some charts here in a minute. So the point is basing their conditions for their estimations or calculations. And the fact that the unemployment is just so low, there's no cracks and everything like, okay. And the war charts off the initial drop in the war was supposed to move higher. And so on guys, it's a bunch of bullshit this market conditions, okay. Resembled very few conditions in the prior a hundred years. And we're gonna point out exactly which conditions we should be focusing that, but let's get real unemployment at 3.8.
Do you really think it will go lower? Like 2.8% unemployment? Are you nuts? Okay. Here's somebody who started dating in charge from a historic animal that points exactly to what will happen next. So the closest timeframe in history, as far as chart pattern, as far as conditions, when we talk about this speed of rate increase the level of unemployment, okay. The rate of an unemployment increase that we could find throughout the history would be 1973. And what also coincides historically is the fact that in 1973, it wasn't a Russia. Okay. But it was Iran who, you know, we had an oil embar with the story repeats itself, almost identical. Now I want you to focus in because this is not the only historic example chart pattern wise. And guys, if you don't know what a tornado pattern is, I certainly cars. You go to 13 MTV and acquire crypto star horse because it's gonna show you exactly the criteria for the tornado pattern.
That's gonna help you nail some incredible trades fr your trading career. And guys, this tornado pattern is insane. I'm gonna show you in the next few charts here, but in 1973, basically focused on the Stein train between April and October. And we've had 1, 2, 3, basically. This is a, a tornado pattern before S and P 500 drops the hell out. Literally like 50% drop guys. This is not a joke. This actually happened a 50% drop in a timeframe of 12 months. I mean, this is, this is a, this is an insane drop that most of the people don't remember. Oftentimes we're talking about the 1929 crash. We're talking about the 1987 crash, but this crash is absolutely phenomenal. And it's got a very clear chart pattern, which I'm gonna illustrate to you is actually happening right now in the market. So remember this number, tornado pattern followed by a 50% drop in the S and P 500 in 12 months.
Okay, this is it right here. This is a thing of beauty. If you learn how to recognize this pattern on individual and cryptocurrencies guys, your account will move exponentially higher. So all these examples, and I'm showing you here on this video, no print them out, uh, post them on fridge. Uh, put it in your folder. When you collecting data on this chart patterns, this better is deadly and I would not against it. So let's move on. Just remember this, this number, okay. It's a 50% drop in 12 months off the tornado pattern. Now I'm gonna break it down to you from the standpoint of interest rates. Okay. We're gonna have to rewind all the way back down to 1973. And we're gonna look at GDP. We're gonna look at unemployment. We're gonna look at inflation. So as you can see in 1973, March 21st interest rates were at five and a half.
Okay. In that year, there was only at a quarter point rise and look, look at these notes, right? Fed raise rate a quarter point to combat 3.4 year over year inflation guys, year over year inflation right now in 2022 is eight and a half. And we're close to this interest rates of in the five handle. And please understand when I'm showing you this interest rates, I'm referring to the fed fund rate. Okay. I'm not talking about mortgages, the mortgages 30 year mortgage already owe a 5%. Okay. Now think about what could happen to mortgages and house purchases, a world. If indeed these rates were to double, okay, we're still at like 2.7, 2.8 handle on, on some of these, um, us treasury, uh, yields. But we're so far from these numbers that we had in 1973, but I want you to focus in these numbers right here.
So the GDP was phenomenal. How often do you get a GDP of 5.6? Damn. That's a strong growth. 1973 unemployment 4.9. Okay. 4.9 is very, very low unemployment. Mean it's not 3.8. Like we've got right now that four point a that's almost as good as it gets. All right. And inflation at 6.2%. So inflation of 6.2 would still be on the current levels in 2022. Now fast forward. Just a little bit. Okay. This is what happens next. Okay. We've got in 1974. Look at this picture. Just look at it from GDP of 5.6 and 1973, we go through GDP and negative GDP in 1974. See, this picture is very rosy. Hey, looks like, Hey, we're gonna do a quarter point rise in interest rates to comp that inflation when it's 3.4, by the end of the year, what's 6.2. What did that water per chant raise and interest rates do absolutely nothing.
And look what happens to unemployment, right? So we went from almost perfect conditions, right? GDP at 5.6 unemployment of 4.9, uh, in started out at 3.4. I mean, these are pretty good numbers. These are pretty good economic stats and look how fast they deteriorate. Okay. So fast forward to 1974 where negative GDP damn. That's like 10 times worse, 10 X, 10 X worse. But we were negative negative from 1973 to 1974. GDP collapses, unemployment. Okay. Almost doubles. Okay. So we're going from this Rosa picture, right? Remember this guy? Let me, let me just for this guy, this go ball right here. I mean like, do these guys not look at a history ever this go ball right here. There's not even a hint of a crack in labor market. Dude. Please take some of our courses. All right. So like when guys like that, they look at a picture.
I mean, he was probably, you know, 21 in 1973 was like, damn this low unemployment, a four point I, uh, GDP 5.6. There's not a crack in any of this data. Shit as good as it gets. And then the same guy. All right. Uh, next year, fast forward one year. Oh fuck what happened? Negative GDP, unemployment, almost double inflation from 3.4 to 11%. How the fuck did this happen? Cause hold on the entire time in 1974, what do they actually do? What does the fab do at 6% feds fund rate? This is where the, an, this is where we enter the period of stack inflation. Now, remember I showed you on the previous slide we got stagflation is what, when you have high inflation, when you have unemployment increasing and when you have growth slowing. So all of these factors are out here. This is just a quick summary, right?
You have inflation from 3%. Now jump to 11%. You have unemployment from 4.9 when everything is perfect in rosy and the unemployment fix. Now all of a sudden, almost dabbles to 7.2 and you've gotten GDP from 5.6, just to collapse of an entire state building minus on five. Okay. While the entire time they've been raising rates and notice we kick into the period of stagflation. When, when interest on the second interest rate hike, guys, we're not very far from second interest rate hike. Now notice the first hike was a quarter point. Okay. The second hike quarter point between December 19 generat. There's not a hike there. And then on February, uh, six and a half. So we go quarter point, quarter, point half a point, and it's over guys. It is over. Okay. And before, you know, same year, you have a recession. So we're looking for another two rate hikes this year.
First, we're gonna transition into a stagflation. Second, we're gonna transition. We're gonna transition into a recession. All of that could happen in the next six months. So when these analysts are saying, there's gonna be no due 2023, 2024, guys, this is the perfect historic analog from 19 73, 19 74, almost a mirror image of what's actually taken place right now with exception of one thing. And that is the fact that the total gut and back in 19 73, 19 74 guys, it was nothing. I mean, it was under a hundred billion. It was like 50 billion, 60 billion. Now we're looking at 30 trillion. I damn it are you like what? There's a huge difference. So back then the fed had the Liberty to raise the rates. And as you can see in the same year in 74, you go from six to 11 and you still cannot contain inflation. And part of the inflation was the fact that there was an OPEC embargo, okay.
It all had to do with a well it's exact mirror image of what's actually taking place right now in the markets with the conditions in Russian and Russian oil and Russian energy. So forward to 1975, the conditions don't improve the GDP still negative. The unemployment goes up the inflation, just the tiny bit lower. It's still high as hell. All right, fast forward, little bit more. Okay. As you can see, the interest rates got as high as 13 per shat. And again, the fed does not have the Liberty to get the rates this high, because I told you then the government will be will. The government's interest rates on the current size of debt is going to exceed the money that's actually taken in. And the only way for the fed to actually service the money that they have already borrowed would be to borrow more. But they're not gonna be able to borrow money at no 10 or 13% rate. So the fed isn't a check mate. There's nothing it can do to get out of it.
In other words, they cannot raise the rates in the shape or form they were raising in the 1970s or eighties. And the outcome of that is that inflation is going to rock it. Okay. It is going to rock it. And I'm gonna show you some charts to back this up in just a moment. So at one point in 1975, you're like, okay, well, the inflation is sticking from 11% to 9% now. So let's go ahead and start lowering rates. So they did from 8% to seven to six, they got to the fives and they saying recession. And it, as soon as they lowered the rates to five and a half, what happens to the inflation? Boom, it spikes again, both inflation and unemployment. And then I just wanna show you a quick picture of the dollar. Um, before we look into some more detail. So 1973, okay.
The title of this video was the great divergence on both, uh, fundamental scale, which is the fact that the current market conditions, while most people are still asleep, we already in the recession, but most of the people still don't see, which is, the fact is what makes you great trader recognizing that it is already here. And if you take the right stance and the right trades and the right tracks and the right terms, this is how you create a fortune. But right now I want you to focus on the other divergence, which doesn't surface very often in the market. And that is the correlation between us dollar and gold. We're gonna take a look at multiple charts so you can understand the correlation a little bit better. It can also help you trade cryptocurrencies. If you understand this correlation, I'm gonna elaborate on that in just a moment.
Focus in 1973, what happens to the dollar from 1 0 9? It drops all the way to 98. So basically dollar is tanking. Dollar is tanking. It does not pick itself B uh, pick itself back up in a meaningful way until we got Paul Walker, uh, taken, uh, over the federal reserve as the chairman in 19 79, 19 80, 19 81. Uh, this is where he really goes aggressive in the rates and the dollars starting to take off until then remember this 1973, while they were raising the rates. Okay. The dollar was actually dropping. Now, generally speaking, when the federal reserve is raising the rates, the dollar should be going higher. Okay? Because it gives more people incentive to keep them money in dollars because now they're earning more interest rate. Okay? But understand this. This is not what was happening in 1973. Higher rates did not stop the dollar from dropping. And this is very, very important to you on staying what the market is actually working through right now in 19, uh, 78, 19 70 in late should be saying late seventies and early eighties, the fed was really serious about getting inflation under control.
If you look at a timeframe which the most aggressive timeframe of any federal reserve chairman is viewed as Paul Walker. But if you look at this guy right here, William Miller, 1978 to 1979, it's only chairman for one year, but this guy did not miss a bit. I mean, look at this guy. He was owned Viagra every month. Look at this. January raises the interest rate, uh, April raises rate look, September, October, November, December. This guy is raising rates every month. Okay. Ray hike almost every month. And look, we're not just stop. Look. I mean, okay, here's a quarter here. Here's a quarter percent look. There's half a point rise, half a point. Okay. I mean, this guy was not playing around and what they do, they replace this Miller guy with Paul Walker. Okay. And this guy, I think they're like, wow, this Miller guy is just not cutting, man.
He's only raising rates. I quarter point half a point. I mean, damn, we need somebody who can really get this inflation in control. So, uh, Paul here says, well, you know, uh, I mean, I can't just come in here and just start raising rates, you know, three, five points at the time. So at first he takes it easy, right? Quarter point Wayne, half a point. Not nothing different from what this Miller guy was doing. But then look here like overall, if you look April for, for October overall, you got five points, five points. Damn it. Okay. And this was just the beginning of fall. Okay. This, and he was like, listen, this is insane. Cuz he was doing all these rate hikes while GDP was negative. Unemployment was at seven, seven point. Inflation was at 13 five. And in this one meeting alone, right, October eight through October, 2020, right.
That two and a half point rise in interest rates two and a half point. I mean the market is getting edgy every time you talking about a quarter point. Like what if the, what if the rate hike was 10 times that two and a half points. So, but Hey, this ain't nothing. Okay. You don't know Paul. So this ball guy right here, he goes and look at this 81, holy shit. 81, digging these guy. Some extra Viagra. He raises rates from 15 to 2015, 20% in one meeting, five points guys. This is like 20 times the rate hike that the fed just implemented. Can you only fucking imagine? Seriously? Just, can you only imagine what would happen to the market if they raise the interest rates five points in the last meeting like this would be, oh my God. Okay. So he doesn't stop there though.
Okay. Here's here's the figure right here. I mean this, this shit is unreal. This guy a over 13th. So he raised it to 20, a couple of rate drops here and there. Uh, where 12%, six point rates, six point. Whew. So what I'm saying, the current federal reserve, uh, team, they're not serious about raising and rates. I mean, you can clearly see when someone was serious about getting inflation in control. When you have five point hikes in the meeting, six point hikes in the meeting like this fed is just so they wanna raise rates, but their actions are actually showing exactly the opposite. And they're showing exactly the opposite for the very reason I have shown you on the first few slides. And it's the fact if their interest rates that funds rates go above 5% it's arm get, okay, just the simple comparison. Some of you can still relate to the housing collapse in, uh, oh 7 0 8.
Just remember if the defaults were gonna go over 5% on these mortgages, it was gonna be our MCGI and it was so the same thing is playing out right now, but a much greater scale, the fed cannot have funds rate to go above 5%. So they're gonna slope base it. Quarter point, quarter, point, quarter point the moment, there is a chance, any probability that I could be miscalculating something and the fed announces half a point hike. You're just gonna be a major, major move, but lower of course, but what I am saying, it don't have to do a half a point hike in one meeting, you can just continue doing quarter point and the market will unwind. I'm gonna show you the charts in just a moment. So first let's rewind the dollar chart. So now we're looking at the 1980s, uh, Paul takes office for the fed and 1979, as I just showed you on the slide, it raises rates just slightly, but this is where the rates really take off.
Right? 1981. I mean, this is where you got, you know, that funds rate at 20% is a particular timeframe. I want you to really pay close attention to, which is a period of the grade divergence, which were, are seen in the market right now. Again, these analysis of these, uh, charts are between U S D and gold. Most of the time understand this, especially if you're brand new, you may not understand what is the typical correlation. The typical correlation is if dollar goes higher, gold should be dropping, right? Because gold is a good inflation hedge historically. But if the interest rates are continuously rising, that gives people incentive to keep the money in the dollars. And therefore dollar gets stronger as a, of all these multiple rate hikes. Okay? The dollars that really taken off, as you can see on this chart, uh, when Paul Walker took the office, the dollar just, it started having this highly bull trend, but in this timeframe, okay, this should be highly negative for gold, but this was the timeframe where gold was also rising, which is what I called the period of the great divergence.
And this is what the market is going through right now. We have both gold and dollar rising. Now here's the kicker. The dollar goes all the way to 165 valuation in 1985. And this is where United States government actually decides to manipulate the value of dollar. And you would think, especially if you're a new, well, why would United States want a lower value of dollar? Well, as the dollar value rises, if you are actually exporting something to other countries, it definitely hurts your exports. And now we're not making anything basically in United States. So it doesn't make a huge deal of difference. But in 1980s, we're still making stuff here in the United States. Maybe not as much as in the 1910s of twenties or thirties, uh, or you know, forties and fifties. But, uh, you know, that's when America used to be a great power, but now United States is still in 1980, still trying to hand onto exports and it's not working out because nobody can afford American exports.
Uh, stronger dollar makes perfect sense in current conditions where China manufactures 90% of the shit made in the world and stronger dollars actually allowing us citizens to buy more of Chinese goods cheaper. But when you are the country that is trying to export, you want your co you want your currency to be weaker in relation to the country, that's buying your stuff because it makes selling to them a much easier endeavor. Okay. So in a nutshell, great currency manipulation in 1985, known as the Plaza court, the dollar tops. And I've got this picture here on, on, on purpose because I'm really trying to show you. So as a student of the market, you really try to understand the typical correlation between the dollar and gold. So, so pay attention when this artificial manipulation was made in accord with China and Europe to actually drop the value of dollar, it didn't work. The dollar did drop 51% drop in three years.
And what seems to be so puzzling is off the dollar or it dropped. So my much, uh, in October, the federal reserve got together October, 1987, uh, actually was in September. The federal reserve got together in October, 1987. We're gonna have this huge crash. And this is actually one time the federal reserve was actually cut and rate. So the huge 1987 crash actually happens after Eureka damn. So typically people associate well rate cuts are good. Damn. This is the time to buy stocks. Well, hell no, not in 1997. So you should really go after and all the market conditions before you go short long on something. Um, so this is definitely a case study for you to go and investigate further to really, if you're really trying to understand the markets better. So the key takeaways from this, I'm gonna show you the next chart of gold is you can see this orange box again.
This is the time when GU should be doing what dollars going higher, like a rocket gold should be dropping, but correlations change in the marketplace for a certain amount of time. And if you can acknowledge those correlations, this is where you spend a chance to make a to of money. So if you keep using the same correlation at times, it, it is highly. At times, things are highly correlated in the market times, the correlation, uh, dissipates a little bit and it's just not as much correlated. And at times it goes away completely. And at times it is exactly the opposite of what it used to be. So understand the general correlation in gold gold should be collapsing here, but it's actually moving higher. So you have B dollar and gold moving higher, which is exactly the opposite of the typical correlation. Now this is where the normal correlation kicks in 1985 gold.
Okay. This is the bottom in gold, which coincides we want look 1985, the bottom and gold and a rocket ship higher for gold prices. Okay. Coin sizes. We want 1985 top in the us dollar. So dollar collapses, gold rocket higher. Now we're back to the typical correlation. There's orange boxes, highly important because this is what the market is doing right now. Got dollar moving higher. Well, we got gold moving higher. Now in 1980s, the resolution of this clearly was the fact that after this orange box gold started dropping and dollar cap rocket in higher. Now in this particular case in 2022, we're looking at exact opposite of this situation. So after the orange box, after the orange box, we we're supposed to see dollar drop lower substantially, while goal is gonna continue rocketing higher. And I've got high evidence chart. I'm about to present you with, uh, shortly.
So bear with me here now also to want you to understand the other, uh, moving dollar that has taken place extremes in dollar, right? So in 1980s, they kept raising interest rates. The dollar kept moving higher to the moon, to the point of where it was like hundred 60 plus, um, in the financial crisis of 2008, dollar hits a low of 75. So you have huge movements and of course, financial crisis, what are the cut rates? The cut rates, the cut rates. I mean the cut rates, the point where there's zero. All right. And so you have two complete extreme year dollar at 75 in 1980s, you have a dollar at 165. That's a huge difference guys. That is a huge difference. And the importance of showing you this charge is to help you understand that dollar could be just as volatile as anything else to trade in the market.
And just for majority of the time, the majority of the time, dollar clearly doesn't trade like Bitcoin, it's a lot more stable, but it is capable of making some significant moves. And most of the time, the significance moves to the upside of the downside will coincide with a major chaos in the market where the correlations are broken, where things are just not as they normally are. And the greater, the speed of change in relation to the time factor, the greater of trading opportunities you'll have. So this is what we're projecting for the dollar, because based off to 1973, historic analog, we believe that the market could sell off at any given moment. And for those of you that will say, well, the market doesn't drop in April. It does not do it. I mean, you can look statistically, every analyst on wall street tell you the market cannot drop in April about to show you something that you should be 100% aware of.
But we believe due to the selloff, that's about to take place. The dollar is actually going to create a double top at about a 1 0 4 level, which coincides with a historic crash historic COVID crash, which we actually predicted on our channel. Guys. We posted the video before this crash, before COVID was even invented. We pointed out that in the next 60 days, I pointed, I posted the video at the end of December, 2019 saying the next 60 days the market was gonna collapse. And I was basing the analysis based off the chart, not based the out my knowledge of COVID. I was looking at 13 market move sequences. I was looking at the chart and said, look, next six days is gonna be ugly. And this is where the market collapses, uh, from over, uh, 3,400 points in SAP to 2200. And this is what dollar reaction is.
So clearly as people are cashing out of stocks during the COVID, where does the money go? The money goes and the dollar. So the dollar rockets from 93, all the way to 1 0 4 good size move. So we think dollar currently, this is slightly outdated chart from April 8th. Today is, uh, uh, April 12th, but we're looking at evaluation on dollar just at the hundred, just at the hundred today. And so still got about a full point move that we're expecting in dollar due to the upcoming sell off. And from here after 1 0 4 level, creating this double top, which by the way, when we say double top could be off, but like a, a point of two, uh, but we're expecting dollars to actually deteriorate substantially after that fact. So you should know that financial system shocks happen when something dropped sharply within a short amount of time.
So the criteria for you, you to be trading actively and to be applying a significant amount of your capital to substantial increase your trade and account size, the most determined and factor is time versus magnitude of the move. So, and right now in a position when the magnitude of the move end dollar could accelerate and it could cause the market to create some insane opportunities in some sectors. And particularly I'm gonna break down the easiest trade that you could be taking. And that is the trade in gold. Now, uh, we believe gold can hit 6,000 right now. It's at 1970 as of today, uh, gold at 6,000 in 24 months. Now it sounds a little crazy, but I'm gonna say that this chart right here in gold is about as good as it gets. All right, we've got fundamental conditions or a right. The dollar could still move higher, but I've just shown you right in 1980s, where gold and have been moving higher together with exception in 1980s, they had the Liberty to continue to rise rates to the point of 20% on us treasury, but the, that does not have the Liberty to do that.
So we're gonna have a distinct shift in the nuts of distant future. Maybe I'm talking about next few weeks, maybe as much as a month and a half to where gold is going to explode. Now it could start exploding as early as tomorrow as early as you know, next Monday, uh, after this Friday holiday. But this each move in gold is about to happen because this we're not talking. Look, the more timeframe you have on a chart pattern, the more valid it is, it could take a little extra time for the pattern to materialize, but these couple to handle breaks out. I mean, they're good for 30, 40% within three months. I mean, we're looking, we're not looking at like a couple to handle over a six month time spent. We're talking about a 10 year cop with a handle on gold. Now this is meaningful.
Okay, this, this is highly meaningful. And if you're wondering how I'm coming up with a $6,000 valuation for gold, besides this highly impressive chart pattern based on timeframes and the criteria, um, I I'm look, I've got this historic timeframe of gold guess where from 1973, because that is the historic analog we believe is actually going to play out in the next, uh, year or two, as you can see. And this is a, this is like a, a 15 year chart here. So it may be a little hard to visualize, but if you focus on this time interval right out here, or basically gold goes higher, then it goes sideways and then explodes higher. This resembles the cup with the handle back in 1973, but on a, not short a timeframe. And look what happens to goal. It basically goes from like sub 40 level goes all the way to 200 bucks.
I mean, that is oh three acts in two years. And so gold is just under 2000 bucks. Call it nineteen hundred, nineteen hundred fifty guys. If you're part of our alert program, I've been telling you to buy gold for the, for the last week, two weeks. Okay. Uh, you'd be making, uh, good money if you got into these trades just a couple of days ago. I mean, gold is up 70 bucks in the last two days alone. And like, don't miss out opportunities like this. That's all I'm gonna say. Uh, and if you don't know exactly, you know, what strikes to go with, you should give us a call guys. I mean, if you're not making crazy money in the market, I, the ones that I'm showing you on the trades that, you know, I posted in, in the videos here on this channel, guys, you're missing out the market is a lot more than making $500 a day.
It's about, you know, catching these waves of opportunities that don't come don't come around very often, but they have insanely high probability of material. Okay? So this is one of the, this gold chart, got a historic analog. You know, we've got the very high probability matching pattern here, and we know the timeframe of when that moves likely to happen. Now, remember despite of how bull you could be on something despite of how great the church good look. I mean, there's still gonna be pullbacks. Look, I mean, here's a pullback. Here's another pullback. Here's another pullback, right? But there's time to buy pullbacks and there's time to short bounces. And so in gold, you wanna be buying every pool bag because overall, if you focus on this couple to handle the major move is gonna be to the upside. So if you take the current valuation goal at like 1,950 times three, uh, you get to about $6,000, all right, which is essentially the historic catalog that we're looking at here now, 19 73, 19 75, it was more like 3.3, 3.4 acts over two year timeframe.
So very simple, very basic, but this historic analog based off the interest rates. So I walked you through guys. It's, it's beautiful. Now we, it in that same timeframe, remember, okay. Not every time the market crashes does gold go higher, but basically historic analog. These are the conditions while the market's gonna drop gold is actually move higher. Remember in the COVID crash, did gold go higher? Hell no crash with the market. It went down from like 1800 bucks down to like 1480 in the same timeframe. And so gold was not moving higher, but it's important for you to understand when is the right time to be doing what on goal to be doing? What on the market? So you wanna be short S and P you wanna be short as that. You wanna be long gold. These are simple patterns. These are simple trait. All right.
And that's, for those of you that are skeptics that are brainwashed by the media, like, Hey, the market can't drop in April. Well, here's a chart from April, 2000. Whoa. Well, hold on. I mean, that looks like holy shit. Look at all these red candles. Well, damn, that was in April. Hold on. When did that start? Oh, wow. That was April 12th, 2000. And then through April 17th, the market just keeps going lower and lower and lower and lower and lower. Uh, damn I, I, where did you find that chart? Leo? Well, shit. You can find that chart too. You go to your thing, you use for church. It's there guys. All right. And look, it starts out at the small drop, kinda like the ones we had in the last two days and it accelerates right. The drop is actually accelerated. So if this is a perfect historic match, you should see in the increase in the drop of S and P shortly.
And I know typically a holiday weekend, like we have this week, like Friday, the market are closed. Okay. It's not something that you would normally associate with a market dropping, but trust me, pay attention to historic analogs cuz they will play out and the market can absolutely go lower in the month of April. Now what's equally true is the market could also have a rather good size balance. So the idea is to catch the right moment. And that's why I invite you to work with the UR and market. Most coach, uh, go to 13 mtp.com, schedule a 20 minute coaching call and get yourself going in the right direction here now. Great de globalization has just begun to keep criteria from a fundamental standpoint to action. Really focus on here is the fact that the broad market has not reacted yet. De de globalization is already here, but the market no reaction.
Okay. So we're looking at decrease in private sector, private sector spending and the collapse of machine. I mean that's quite often, okay. Number two, cost and efficiencies in ever sector equals less production. Well, you can't sell what you can't produce and you certainly can't sell what you can't produce, but you don't have the demand for. So guys shorten stocks like Fastly is a no brainer. It's an absolute, no brainer. And if you're Tesla bull, you should go watch. One of the videos where one of our students make over a couple of million short Tesla, uh, not a few guys made a couple hundred thousand going Tesla along, but have you made a few million dollars on Tesla going low? Of course it depends on the size of your account, but let me rephrase this. Have you taken a hundred thousand dollars and made $3 million long on Tesla?
Okay. If you haven't, you have an opportunity to short Tesla with a hundred K right now and make 3 million. If you don't know how to the fuck to do it again. 13 mark moves.com scheduled call talk to a coach. Now let me just summarize what all of this is boiling down to. We're going from here into a higher unemployment state, lower U S D. Now remember USD could steal the rocket higher to the 1 0 4 level, possibly 1 0 5 and then it's gonna have a substantial move. Lower ultimately high unemployment, lower USD is gonna impact company's profits. Okay. We're looking at a lower growth period. All right. So a lot of companies are gonna be impacted. I'm gonna be outlining some of the easy ones, but you know, when I suggested everyone is and the alerts to short and V when it was up and high, um, it already came down quite a bit.
It seems to be wall street from wall street down, uh, from wall street, top favorite stock to, you know, wall street, most hated stock. I mean, that's what stock market is about. I mean, you sneeze, you lose. I mean, you can't just be highly bullish in something. And then it's down, you know, 30% in 10 days, right? That's the kind of market we're in the market. Sentiment changes rather rapidly. So what used to be the favorite stock that everybody was loading on now is the greatest stock of paying for the market. Meaning everybody is getting out of that stock for the same time. Not that Invidia is not a be, is not a good stock. It is not that Invidia is not a good company. It is all right. The point is everybody owns it. And when everybody unloads it at the same time, what happens, it drops.
And that's where you make a shit load of money. So just think of semis like this. If I was to summarize it real quick, okay. The whole idea for shirt and semis. Okay. Missing a lot of ingredients that go into manufacturing, all sorts of chips. A lot of them unfortunately have to utilize, uh, materials that are longer available due to sanctions. And there is no other countries that gonna be able to replace those components. So short semis, their sales are gonna on down that the profitability is going lower. If they manage to replace those components, they're gonna be replacing a much higher cost. Therefore their margins are gonna be negatively impacted. And who in the right state of mind is gonna be buying their stock back when interest rates are going higher and you know, your company, sales and projections are gonna be going lower and lower over the next few years. So checkmate on semis,
You should be thinking, why didn't I sign up for 13 market most, couple of weeks ago when we made the call to short semiconductor stocks and make sure you don't miss out on the next few sectors and the specific stocks, how to trade them, um, gonna basically break down what de globalization means for you as a trader. You short China. So they sanction the shit out of Russia. Okay. Who's next? Like it's not the fact that the sanctions are placed in Russia every fucking day. The questions you should be asking, okay. Who are they going to sanction next? Read between the lines. China just send a bunch of weapons to Serbia. Now, why would they do that? Well, United States in 1999, just learned a little bit of history. Bumped the shit outta Serbia. Okay. Nobody makes any claims. Oh, United States was, you know, violating human rights.
Nobody gives a shit. Why? Because it was United States, bombing fucking countries, not Russia. So why would China be involved here? Well, while they bombing a bunch of civil people in Serbia, United States actually managed to blow up a Chinese embassy surprise, surprise. China just sent six planes of weapons to Serbia. Now, if you don't know where Serbia is, it's pretty di am close to the conflict in Ukraine and Russia. So if you don't see the big picture here, okay, which means translates into trade in terms I don't like to get into politics a lot, but this one just screams to be translated here. So basically you shorten for national stocks and you long local stocks. The only stocks you actually long is the ones that don't depend on any international components, companies that actually manufacture something inside of the country where you reside. Okay? Whether it's United States or other country, uh, Canada, you wanna focus on countries that are not in any way dependent on this, uh, international deglobalization that's about to get worse.
And clearly deglobalization means short travel stocks, which every analyst on wall street is bullish. Travel stocks. You gotta love it. You gotta absolutely love it. As a trader. Every idiot on Wooster wants to long travel stocks. Okay? Just as these stocks are bought the report, the most fucked up earnings over the course of the next year travel stocks. Oh my God. With the fuel prices consistently rising and fixing to rise anymore. Why the hell would you want to be in airlines of any other sort of travel stocks? Short all of sales. Okay. Again, you can't sell shit that you can't even manufacture. It's simple on top of that outta sale, get hit twice. Not only they can't manufacture shit, but now they gotta fight the higher interest rates, which makes the monthly, the payments higher for the public. Good luck with that.
The national outcome. You want a lawn stuff like wheat, which a lot of it is taken out of the marketplace due to current worldwide conditions, natural gas, gold. We broken that down. Okay. Here's another chart for those of you just delivers to say, whoa, the market can't drop in April. Here's April, 2001. Drop one, drop two. Beautiful. And look at the timeframe again. The way you make money on weekly options, something has to drop within a very short amount of time for you to make a December, 2007. Now this is a tornado pattern, okay. Right before what? Right before this. Now in 2007, 2008, we actually have a double tornado pattern. Have 1, 2, 3 tornado, 1, 2, 3, second. Tornado. You got double tornado pattern translates in to 15% drop, 15% drop in what a month guys. It's 30 days, 15% drop in the market. Remember early, I had you remember 50% drop over the course of 12 months.
Now this is a 15% drop over the course of 30 days. This is what this stuff that gets you really paid now December, 2018 and not a tornado pattern. I hope you can see it. If you can't see the tornado pattern here, guys, you've gotta take the crypto star war by 13 market moves. Uh, it's actually gonna break down the tornado pattern. This is the most brutal pattern. Okay? This is the pattern that allows you to make 10 X, 20 X, 30 X type traits. If you don't know this pattern, you trade without it. No wonder your account. Ain't going nowhere. So here it is the tornado pattern. You can't see it. 1, 2, 3. Watch what happens next? Done 1, 2, 3, tornado, boom. There it is. Okay. 11% drop. All right guys, what's the timeframe on this? It's less than 30 days. So now I have given you three examples, right?
Of where the market could be going short term, 30 to 90 days, you can easily get basic the tornado pattern. You can easily get 11 to 15% drop in S and P. Now, if we're looking longer term, we look at 1973 top pattern formation. We're looking at 50% drop, which is not a big deal because not so long ago, we're at 2300 2400 due to the COVID crash. It wouldn't be surprising at all. If we actually revisit those levels over the course of the next 12 to 18 months, now learn how to short stocks. That's the main message of this video. Hopefully something, but if your aspiration is to be a greater trade on which you're currently at, make sure you learn how short the markets now 13 market moves prides itself to be the best short selling type strategy E world. So if you wanna learn from the best learn from 13 market moves, 13mmtv.com.
Get your education.
Get working with a coach.
Take advantage of current market conditions.
Leal. I'll get you the next video soon.
want to make money on next market crash? This historic analog tells exactly when the crash will happen…bear market sign 1973 1987 2000 2008
#2022marketcrash #marketcrash #2022recession #tradinganalog #historictradinganalog #chartdivergence #bearmarket