First off, late this past week Suze Orman warned of an imminent crash. As a registered perma-bull, she clearly is not an alarmist and so for her to see great risk means that the risk must be asinine stupendous. However, in the tradition of the buy and hold investment advisor profession, Orman never recommends selling stocks. The advice she gives is what one would give a twenty year old. Dollar cost average in the future. For those who are closer to retirement her advice is useless with regards to protecting them from risk. Investment advisors only ever recommend buy and hold. They never attempt to time the market.
If Orman is right, then all she did was add to the prevailing angst and confusion. The vast majority of people won't get out if the crash is imminent.
Here's what to do: Nothing
Getting back to the point of this post, Millennials are now massively leveraged to imploding Tech bubbles, cryptos, and junk stocks. So their gamified portfolios are the locus of maximum risk.
I believe one of the first bubbles to explode will be crypto currencies, given that they have an established history of exploding. These are the only markets that are open on the weekends and as I write Dogecoin has already dropped -50% and is staging a weak bounce. Third, I've noticed that Ethereum is currently 90% correlated to the Nasdaq. Of the major cryptos, Ethereum has been outperforming Bitcoin recently as it often does at an impending reversal.
After crypto Ponzi schemes, the next weakest link is Chinese stocks. Biden's China policies are merely continuing Trump's four year aggression. I predict it will all backfire spectacularly.
U.S. markets and the Nasdaq in particular are extremely exposed to Chinese Tech stocks which are trading like bricks. These will be the first stocks to test the March 2020 lows and they will drag down many U.S. Tech ETFs along with them.
The next most vulnerable trades are all of the various bubbles that formed in 2020: EVs, Biotechs, Work from Home, Cloud Internets. In other words Ark ETFs.
The Work From Home stocks have the clearest corrective wave pattern:
Biotechs are the next sector that will retest the March 2020 lows.
When all of last year's Tech bubbles final explode along with crypto, Chinese stocks, and Ark ETFs, then Millennials will get margined out en masse. Nasdaq volumes will skyrocket beyond anything we've seen before. Brokers will go offline for hours at a time.
Volatility will explode and vol targeting algos will dump S&P futures day and night. It took central banks three weeks to get markets under control last year, this year it will take at least as long, but the carnage will be an order of magnitude greater.
It will be a massive clusterfuck, beyond anything previously imagined.
Hard to believe, I know.
