Why you ask? The answer is J Pow used that multi week bull trap to convince the masses things will bounce back after the collapse. Now when it really does occur, there will be no bounce back. J Pow has to condition retail properly to ensure they lose maximum amount possible.
# Thankfully, AI will explain it so even the most regarded here can comprehend the charts. :)
First Chart: Shopify (SHOP) Bubble and FED QT (Quantitative Tightening)
* **Event**: This chart shows the price of Shopify Inc. (SHOP) experiencing a massive surge between **March 2020** and **November 2021**—referred to as the "SHOP Bubble"—with a rise of **483.82%**. This was largely fueled by the FED's aggressive monetary stimulus policies during the COVID-19 pandemic, notably when FED Chair Jerome Powell ("J Pow") vowed to "print unlimited money" in March 2020 to stabilize the economy. The combination of low interest rates and quantitative easing (QE) pushed asset prices, including tech stocks like Shopify, to record highs.
* **Key Event**: **November 2021** marked the beginning of the FED's **QT (Quantitative Tightening)**, which was a reversal of these supportive monetary policies. This led to the bubble bursting, with Shopify's stock falling **82.16%** as interest rates began to rise and liquidity was withdrawn from the market.
# Second Chart: Nasdaq 100 during Dotcom Bubble and 2008 Financial Crisis
* **Event**: The second chart covers a broader time frame and shows the Nasdaq 100's performance, particularly during two significant crashes:
1. **Dotcom Bubble (2000–2002)**: Following the tech boom of the late 1990s, the Nasdaq saw a massive bubble driven by speculative investments in internet-based companies. After a **January 2001 rate cut**, the market entered a sharp decline, with the Nasdaq falling **70.82%** by 2002. While the FED attempted to stimulate the economy with rate cuts, it was too late to prevent a crash.
2. **2008 Financial Crisis**: In **September 2007**, the FED began cutting rates again, attempting to stave off the impending economic downturn. However, the market still faced a **54.93%** decline as the financial system collapsed under the weight of subprime mortgage defaults and broader economic fragility.
# Analysis: FED's Policy Impact
In both cases (Shopify and Nasdaq), these charts demonstrate how **FED monetary policy shifts** directly influence market bubbles and subsequent corrections:
1. **Excessive Stimulus Creates Bubbles**: In the Shopify chart, aggressive QE in 2020 caused a massive price surge in tech stocks. Similarly, easy monetary policy in the late 1990s contributed to the Dotcom bubble.
2. **Tapering/Rate Cuts Too Late**: When the FED eventually began tightening (in November 2021 and 2007), markets reacted sharply, leading to significant declines. The delayed action in tapering monetary support and the rate cuts in previous crises often did not prevent downturns, but they reflected efforts to reverse earlier mistakes.
3. **Markets React Sharply to QT**: The Fed's move from QE to QT (reducing liquidity) is often followed by steep corrections, as seen in Shopify's sharp decline after the FED began tapering in late 2021. Likewise, rate cuts in 2001 and 2007 followed speculative peaks but came too late to prevent major declines.
In summary, both charts illustrate the FED’s critical role in inflating asset bubbles during periods of loose monetary policy and the sharp market corrections that follow once policy tightens.