“Thelma and Louise” Moments in Markets

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by Gary Christianson, Miles Franklin:

The movie “Thelma and Louise” was released in 1991. One theme it discussed was “crossing over” or going beyond the point of no return. The consequences were tragic.

Markets occasionally experience “Thelma and Louise” (T&L) moments when they “cross over” into a new phase. The results are usually tragic. Now is a good time to call Miles Franklin to convert over-valued digital assets into real silver bullion.

Thelma (Geena Davis):  “… something’s like crossed over in me and I can’t go back…”

“Thelma and Louise” moments or T&L moments occur in markets when:

a. Market prices have moved rapidly higher and almost vertically. Such vertical or parabolic moves are unsustainable, but the degree and timing of the correction or crash is unpredictable.

b.Technical indicators such as the RSI (relative strength) are very high and turn downward.

c. Market prices fall below a rising support line.

Consider T&L moments in history:

The DOW in 1973

Gold in 1980

The DOW in 1987

The NIKKEI 225 in 1990

The NASDAQ 100 in 2000

Crude Oil in 2008

The S&P 500 Index in 2008

Present day Possibilities:

The DOW in 2018

Netflix in 2018

Amazon stock in 2018

XIV in 2018 (confirmed)

The above markets from 1973 – 2008 went vertical, were strongly “over-bought” and eventually broke support lines. Usually they crashed.

No guarantees exist and markets do not crash or correct every time, but consider the similarities to stock markets in early 2018.

From “Thelma and Louise”

         Max:  “You know, the one thing I can’t figure out are these girls real smart or real real lucky?”

         Hal:  “Don’t matter. Brains’ll only get you so far and luck always runs out.”

The market parallel:  Astute trading will create success, and luck helps, but an exit strategy is always necessary. 

Read:  Bill Holter: “Something Is Definitely Changing

Examine the graphs of these T&L moments from history. Note where over-bought prices fell through the green support lines – marked with red ovals.

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