Sven Henrich: Did The Coronavirus Just Infect The Markets?

Is the coronavirus the pin that will end the 10 year-long Everything Bubble?

Quite possibly, cautions Sven Henrick, technical analyst and lead market strategist for Northman Trader.

For too many years now, the financial markets have been conditioned that “dips don’t last”. Confident that the Fed will always provide the liquidity needed to push assets higher, investors have come to believe that risk doesn’t matter.

Well, covid-19 is exactly the kind of unexpected exogenous shock that central banks are powerless against. No amount of intervention by the Fed, the ECB or the PBoC will slow the spread of the virus, or force-start factories idle from workers quarantines.

So, what to expect from here? In terms of damage to market prices, we haven’t seen anything yet, predicts Sven.

And today’s failed recovery is a sign that the previously-bulletproof market ‘exuberance’ of the past decade is now losing out to ‘fear’.

Combine further spread of the virus with continued de-celeration of global trade, then “all bets are off” warns Sven.

Click the play button below to listen to Chris’ interview with Sven Henrich (44m:45s)

Then, if concerned by the market risks Chris and Sven address, consider scheduling a free consultation & portfolio crash audit with Peak Prosperity’s endorsed financial advisor:


This is a companion discussion topic for the original entry at

Up until a few days ago our prep was stealth. Now the CDC is openly saying we have problems. Market got hammered 2 days in a row.
People will slowly wake up to our predicament

People forget during a crash stuff goes down, everybody goes down. Various reasons for it; both price manipulation as well as margin calls - everybody having to sell gold/silver to pay for the longs that just went bust. In 2008, both silver and gold crashed after a long run up. Wiped out all gains for years.
But once that ended… well. The chart speaks for itself. If history rhymes in bubbles it rhymes in aftermath too.
I like reading Sven’s articles too. His chart game is absolutely on point! Definitely can recommend!
EDIT: New video from Chris (that doesn’t have a accompanying article yet):

Just 2 for now because there’s many things that’ll happen and i wanna let others have their say too :smiley: but these are VERY important for Americans to consider:

  1. Pensions will be GONE!
    Just search for “Illinois pensions zerohedge” to get all the info you need to understand Illinois pensions are completely broke. So if you can exit out of 401ks or whatever you can do to drag some pension money out of there. Will there be bailouts? sure. But this is a national problem. At some point you can’t keep bailing yourself out (without triggering hyperinflation and then everybodies poor anyway).
  2. The student debt bubble will explode. This is some original work from yours truly! But i didn’t have anywhere to post it at the time where somebody would pick it up, so i posted it to the only people who would gain atleast some shadefreude from it.
    (You have to add https://www. yourself because HOLY HELL it fetches and posts the entire reddit post and my god did i ever spent hours working on it/typing it so it’s a long one. Not gonna do that. Nope.)
    I wonder if somebody will pick up on it now. In any case; Sallie Mae is the only student loan maker in the US, it’s basically the same as Freddie Mac and Fannie Mae, except they wheren’t nationalised in 2008. So that’ll have to happen now because it’s a private entity, a private bank, and student loans where already at an incredibly high default ratio back in december - and all those day trading students who just got wiped out will not be paying back those loans.
    If nothing else, it’ll be a fun read if you’ve ever had to suffer under student debt. Atleast your tormentors will get their due.

Cured from diabetes with Herbal medicine
I was diagnosed of DIABETES for sometime, I have tried all possible means to get cured but all my effort proved abortive, until a friend of mine introduced me to a herbal doctor from Africa by name Dr Nelson, who prepare herbal medicine to cure all kind of diseases including hepatitis B, DIABETES and (HPV). When I contacted this herbal doctor via his email, he sent me his herbal medicine via courier service, when i received the herbal medicine he gave me step by step instructions on how to apply it, I took it as instructed after 3 weeks I went for check up and my result was negative. I am very grateful to DR Nelson may God bless him and continue to give him wisdom. I will continue sharing this testimonies,You can also Contact him on. drnelsonsalim10@ gmail. com
or send him a whatsapp text on +2348116522191.
he has herbal cure for Herpes Virus and outbreaks, Fibroid, cancer, Hepatitis and heart diseases

What we are seeing right now on stock markets with this current correction is just an temporary event and it will not last.
Markets remain in a very strong technical secular bullish uptrend and I will counter that even more money will flow there over the coming years.
This will take place against a backdrop of an increasingly strong dollar and continued deflation in industrial commodities. That includes both gold and silver which stand to sell off substantially during the next 24 months.
My long term gold target is sub 1000 dollars and we are going there in spite of every narrative proclaiming such a thing is impossible. Well it is indeed possible and the charts are unequivocal in that respect.
Both GDX and the HUI, for example, have to this very day failed to make new highs versus the 2016 price highs and let me assure you of the extreme bearishness of that one simple fact.
I suppose I would be remiss to tell you all just how bad it’s going to get for gold so let me just get to the point and warn you what the target looks like.
First off, we are not in a bull market for precious metals at this time in spite of the usual people proclaiming such. Not yet anyway. We still need a fairly steep decline to complete a long standing pattern that is as good as etched in stone.
Price will fall to around 968 dollars before all is said and done and that should warn you about the severity of the deflationary impulse that is now being unleashed on the entire globe.
Along with silver, these are two assets that should be sold for several more years. Instead, if I were to offer a better alternative it would be to remain focussed on both the stock market and dollars as that’s where we will see continued performance.
Gold miners will not see a final low until January 2024.

Goddamnit i forgot a very important one for those who don’t know yet. That’ll be alot of people since this news hit amid the repo panic/WWIII panic so it got snowed under.
Since January 10th 2020, Germans can no longer Anonymously buy any physical gold above €2000 with cash. This was down from €10,000 in 2019 and €15,000 in 2017. This means, at current prices, they already cannot buy a 1 oz gold coin purely with cash.
Now obviously this will shunt most of you into a “gubment gonna gitcha gold” mentality, and you’d be right to consider it. However, i don’t think that is the government’s end goal.
Deutsche bank is bankrupt, as are others ( But it’s in dutch, with only auto translate on the captions, but i thought i’d atleast link my source for those statements). The scale of the German banking system is too large to save without a bail-in.
A bail out is when the government uses tax money to save the bank. A bail in is when the bank uses haircuts on deposits from customers to “pay” for the bad assets they have. If they’re liable to give less money back to people, their capital ratio increases. In other words; they gon’ gitcha money.
Buuuuut we saw in Cyprus in 2012 when they trail-runned that bad boi that there is no point if you announce the bail in. All the Russian Oligarch money was gone before the financial “lock down”. They won’t make that mistake again.
As soon as all transactions are cashless, you just flip a switch. If you can’t buy gold with cash, and if you can’t get cash, then you turn off the access of gold traders to the banking system and voila - no more gold sales.
No where to spend your money on as they first take it via bail ins, and then dilute whatever you have left with hyperinflation.
Even if they wanted to confiscate gold a la 1933 (i think?) the government’s not going to have the man power to go door to door, or check all the vaults to see whats in them. They’re going to rely on people turning gold in, and more importantly, no additional gold sales frontrunning the inevitable price hikes. It’s simply going to be: They’re going to look for gold as long as they can bear it and who ever’s left standing, wins.
Prepare accordingly. I’m not going to give advice as what you should buy when. But along with delivery and demand shortages, you should also keep your government’s actions in mind.
(oh and obviously, when the german banking system goes, the US goes with it, because we learned nothing from 2008 and banks are just as interconnected as they ever where).

Thank you for your studies/opinion. Do you think the Fed. etal. will allow deflation to develop? I almost got convinced to stop buying gold in the early 2000s because a guru I followed said it was going to drop to $100/oz. But I kept reading my charts and bought 10 oz. @$252/oz. the day of the low. Scarry, h##l yes, but sometimes those are the best buys. I think, because of the debt, they have to keep printing.

That’s a definitive negatory on deflation. I couldn’t possibly find it right now due to all the activity but i saw a chart on Zero Hedge that showed there hadn’t been any (real) deflation in the past 90 years since the creation of the Fed. There had just been slowdowns and speedups in inflation.
Now all logic says both that Deflation Must Happen, because it hasn’t happened for so long and deflation is an integral part of the economy. They learned that lesson in the Great Depression, because they had prevented deflation from happening for so long they ended up in a deflationary spiral.
In short; they had eliminated deflationary crises by simply kicking the can and stacking all of them on top of each other. Which is now coming due.
But the answer to Deflation is still the same; print and circulate more money. It actually is; if i was central bank president i would’ve already said 2 things: 1. the virus is the real deal and we need to prepare, 2. Here’s 2 trillion in liquidity. It won’t be for the stock market. it will be for mid to small sized businesses to lend directly from the Fed at zero interest rates to survive the initial virus impact and continue paying a percentage of wages rather then outright terminating employees, to make sure whenever this is over everybody still has a job to return to and they can go into lockdown without worrying about income.
Sounds completely reasonable right? It would be! But i also wouldn’t have printed $4,5 Trillion dollars during a bull market so my balance sheet would go from $0 to $2 trillion. If there EVER is a real recovery, rates would normalize, and the US would brankrupt itself overnight. So it’s a rock and a hard place: print nothing and deflate, print everything and hyperinflate.
Considering both Trump and Bernie have both announced massive spending plans with no way to pay for those, and while there will be a rush into the dollar as a safe haven first, no foreign country is going to buy bonds when they need cash themselves for supplies. Who in the damn hell is going to buy all these things when the world is on lockdown?!?!
The central banks that’s who. And they have only 1 way to do so. But this time the problem is compounded by >real intrinsic value< disappearing. It’s the other side of the coin. If Money represents Value, and Value is reduced while the amount of money stays the same, Money becomes worth less.
In practice you know this better as food inflation or “Bad harvest, less oranges, orange more expensive”.
Bonus points for spotting the trading places reference. So not only are we going to see more money, we will see less value that money represents. Prices will skyrocket, even during a deflationary episode.
And since the Repo Crisis on September 2019 meant the US effectively went bankrupt (because it forced the central bank to buy bonds >out of necessity because nobody else wanted them< which is the definition of bankrupt) the fed will have to keep printing now. There is no choice.
Inflation Must Happen. The charts that say interest rates will normalize at one point are stronger then the ones that say we’re headed for a deflationary spiral. NOBODY is going to tolerate a -3% savings rate on their bank account they’ll just pull cash out of the system.
Which are also more arguments for this going into hyperinflation at some point, we are, once again in a liquidity crisis. Those are deflationary in nature, after all if there is a premium on liquidity there is a premium on cash, cash increases in value vs real value thus; deflation. They will print this difference away just like in 2000 and 2008, balance sheet be damned.
BUT! now that real world value is plummetting and starts acting like a multiplier on the whole thing, when investors are desperately going to look for value to hold on to whatever money they have, interest rates will start to tick up. Slowly at first, but they will. (AKA we get deflation first as they adjust the amount they’re printing upwards, but they go too far for too long cause that’s all they ever do).
The bond market has been running on faith for a very long time. Once people realize it doesn’t matter whether they lose their money in bonds or lose it in WeWork shares, it’s lost either way. So it’s much better to bring it closer to home in the form of cash and gold/silver. (putting an even bigger drain on liquidity) (and i say both of those because they hedge each other: if the deflation persists, you spend the cash on more gold. If deflation then turns, the gold protects your value on the way up. You can always sell it at the next top.)
It’ll hit a tipping point where the bank won’t be able to print fast enough. Because if you see the central bank printing $1 trillion a day, you will start losing faith in the dollar real quick. That’s hyperinflation - a total loss of confidence in the currency. The dollar will eventually survive, but as a remade currency - the greenback is DOA.
So their preferred kicking the can one last time method will be trying to not print all the money at once and just let prices rise a little. then a little more, then a little more. After all, 10% monthly inflation isn’t 1000000% monthly inflation, right? No need to worry it’ll be fine. This didn’t happen in the Weimar Republic or Zimbabwe exactly like this before or anything.
Deflation won’t happen until the day they kill the greenback and allow you to exchange it for New Dollahs at a rate of $4 trillion to $400 or something like that. Nobody will have any left to care with at that point.
And the rich?
As always. The Rich will be fine. It’s not about not-losing money. It’s about losing less then everybody else:
I have $10. You have $100. You have 10x my wealth. Bread stabilizes at a price of $1, because there are many more of me (poor) then of you (rich). You can buy 100 breads.
Crisis hits. I have $5. You have $70. You lost $30. I lost $5. In flat terms, you lost 6 times what i lost. You now have 14x my wealth. Bread stabilizes at a price of $0,5, because there are many more of me (more poor) then of you (more rich). You can buy 140 breads.
Welcome to Wealth Transfer 101. May i hang your Wallet?
I’ll stop here after that Zinger :smiley: cause i could go on for hours, i really think we’re in the end game here. As usual, the normal caveats: I do have logic on my side as well as alotta charts, but no man can see the future. The moment somebody takes me seriously is the moment my predictions start falling apart, as people change their behaviour. So what ever you do or believe; it’s your own damn business (that’s why critical thinking is so important; i can’t do it for you because i refuse to take responsibility for your decisions).
Time will tell if i’m right or not. All i’m saying is i’ve got €1000 in cash next to my silver and gold, just in case i’m wrong and deflation pulls me way down. Considering 50% of Americans don’t even have $1000 in their bank account, relatively speaking, if gold becomes worthless i’d still be rich (cause cash will move in the opposite direction). Deflation is like turning back the clock, and since the US didn’t have it for 90 years, it’d be like owning $1000 in 1900. Considering my current wealth i’ll take that deal.
Just be smart bout whatever you decide to do. Don’t take my word for it, read what people opposite of me are saying, and ask yourself which sounds more likely, then construct your own events from your local situation as to what might actually happen. That’s what i like to call, an Informed Decision.

In March they will bomb Trump away and with it Q and justice.
Look who is coming to the forefront. Obama probably by UN, possibly by election.
The antichrist is visible back in business.
Good luck with that…

No, the Fed is powerless to stop deflation. What is about to happen is much bigger than the collective power of the world’s Central Banks which is why they are now talking about MMT.
We are on a deadline now.
What most people don’t know is that the bond markets already peaked in 2016. We are only awaiting the other shoe to drop as the chart confirms it by topping a second time during 2020.
In other words the so-called bond bubble will burst this year and it will no doubt be attributed to our global slowdown brought on by a steep economic decline in Asia.
But I can tell you that I have been watching this unfold from the perspective of capital for many years already and even though I could not identify the reasons, I could forecast when the trouble would start.
So rates will rise as bonds come down. It does not matter what theory or narrative anyone puts forward since this cannot be stopped from happening. It’s more a matter of how we deal with it once it begins.
Don’t count on the Fed for any answers though because they ultimately follow the market and the market is already telegraphing that the cost of money will start going back up.

Years ago, now lost in the mists of time and moving, I read a prediction of a US hyperinflationary cycle that stretches back to the Revolutionary War days. Due to hit 2022-2024. So, I hope I survive covid2019, cuz I’d like to see what happens. I think diversification is good.

Funny thing about consistent chart angles, whether up or down. If there’s a trendline, and you’re lucky, consistent, or brainwashed enough to follow them, it’s a steady payday.
If major markets do an upper left to lower right on the chart for the upcoming period, there are dozens of readily available index short ETF’s to choose from.
I piled onto 5 shorts the past 2 days, closing out or placing tight stops at the end of each session. Also put a bit into PHYS as a hedge and medium term play should safe haven trades kick in.
Take it a day at a time, and if you have the stomach for it, short it all the way down. BE CAREFUL with the leveraged short positions and don’t leave them in play overnight… for most folks just stick with the 1x levered shorts (ie SH). Our IRA just went up a few mortgage payments in 2 days should we need it if this virus knocks our jobs offline…
NOT a professional investor, but would offer this advice to anyone not super financially savvy with a passive 401k: GET OUT. Go to cash (ie exchange all your funds for a money market). Employer provided 401K’s unfortunately tend to offer only upside options - nothing bearish, gold related etc.
Go. To. Cash. Do it immediately. Call your 401K 800 number if you’re unfamiliar or haven’t logged in in awhile. This isn’t going up, and could nosedive quickly. Take what you have and park it now, and if you’re comfortable ride the water level down with shorts.
Good luck everybody - this is about to get real.

You need to research what investments are held in the money market. Might be a bunch of sketchy bonds and mortgage backed securities. Very little is safe now days.

I don’t spend much time watching the DOW and S&P charts but just took a longer look. Sorry to admit it but Sven is right. We have three years of sideways and down markets coming. Looks like almost everything will deflate…bonds, stocks and gold. The dollar will rise. What a screwfest this is going to become.
But the world won’t end. It’s just going to be a protracted slowdown and long consolidation period for the markets.
Maybe it’s a good time to walk away from the computer and just enjoy life a little more instead.

Hong Kong just announced a variety of fiscal stimulus measures…including a “cash handout” of HK$ 10’000 (total budget cost = HK$ 71 billion) - which looks and smells exactly like helicopter money to me. I imagine this will get saved before it gets spent.
PP has long talked about helicopter money spelling the beginning of the end…
And so it begins, it seems…

Who cares? COVID-19 is just another event that causes the market to move. It’s only a problem for people (like Sven) who have a green market bias. Lose the bias, adopt market neutrality and trade in both directions.