When is the Next Crisis Coming?
It has been now almost ten years since the last serious financial crisis. We are not talking about the relatively minor pullbacks in the stock market, of course. Is the financial system stable now? When and why the next crisis can come? What might be the major causes for such an event? Oh, if we only knew…
However, one of the brightest minds on the Wall Street, Dr. Marko Kolanovic (his Ph.D. is in theoretical physics) warns about possibility of such an event (it is part of a very detailed and substantial 168 pages report published by JPMorgan).
He thinks that computerized trading and the abundance of passive investments set up the stage for a major calamity. Due to the speed of the trading algorithms, the liquidity in certain underlying instruments can disappear very quickly, and this will lead to the well-known phenomenon of sharp drops in the indices. A huge number of institutional and retail investors own the same positions either directly or via ETF’s and other instruments. If for some reason they all decide to sell even one position (think about Tesla’s CEO interview last week), this might lead to a complete collapse of the market.
Almost all trading algorithms stop trading during very volatile markets, and this might completely dry out the market. The banks will have to step in, the government will step in, a lot of pension funds will collapse, retail investors will lose their savings and this might lead to social unrest. Dr. Kolanovic does not necessarily predicts that but warns about the signs appearing on the horizon. Dr. Harari in his book “Home Deus” is asking a question about the soul and consciences of computer algorithms. They have none! Home Sapiens do, and their reaction to such market events might be very disruptive.
Once again, this is not a prediction but rather a food for thought.
Momentum Indicator for SPY turns positive, indicating new upward trend
SPY saw its Momentum Indicator move above the 0 level on June 03, 2025. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 69 similar instances where the indicator turned positive. In of the 69 cases, the stock moved higher in the following days. The odds of a move higher are at .
Technical Analysis (Indicators)
Bullish Trend Analysis
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where SPY advanced for three days, in of 366 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 434 cases where SPY Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The 10-day RSI Indicator for SPY moved out of overbought territory on June 11, 2025. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 45 similar instances where the indicator moved out of overbought territory. In of the 45 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 9 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The Moving Average Convergence Divergence Histogram (MACD) for SPY turned negative on May 28, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 53 similar instances when the indicator turned negative. In of the 53 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where SPY declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
SPY broke above its upper Bollinger Band on May 12, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
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