Outrageous Predictions
Executive Summary: Outrageous Predictions 2026
Saxo Group
Read Saxo's Outrageous Predictions for 2026, our latest batch of low probability, but high impact ev...
You can access both of our platforms from a single Saxo account.
Is it really so different this time?
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: A look at two historic Dow Jones Industrial Average charts may help us differentiate between a minor correction or the start of a more profound sell-off in equities.
The ongoing sell-off in equities has seen the benchmark US indices lose hold of key long-term support levels even as some investors continue to insist that it's just another buying opportunity. Is this time really so different, one wonders, or is history preparing to repeat itself?
Let's take a look at two near-identical chart patterns representing the same instrument at two different points in time.
Zooming in on Chart 1, we see a double top formation with an 11% correction between tops and a bounce off the 55-week moving average. We massive Relative Strength Index divergence with the second top slightly higher than the first; this top is followed by a selloff to the 55-week MA.
Let's take a look at two near-identical chart patterns representing the same instrument at two different points in time.
Zooming in on Chart 1, we see a double top formation with an 11% correction between tops and a bounce off the 55-week moving average. We massive Relative Strength Index divergence with the second top slightly higher than the first; this top is followed by a selloff to the 55-week MA.
Now let's look at Chart 2. Here, we another double top with a 12% correction betweemn the tops close to the 55-day MA; RSI shows massive divergence. Again, the second top is slightly higher than the first and this top is followed by a selloff to the 55-week MA.
The biggest difference between Charts 1 and 2 is the time between tops.
The biggest difference between Charts 1 and 2 is the time between tops.
Look at Chart 1 again – this time, we will zoom out a little.
This is a weekly chart of the Dow Jones Industrial Average index, the oldest stock index in the world.
Here we see that the second top was slightly higher than the first, and in fact marked the index's all-time high in early October 2007. Thereafter, the index dropped to test the 55-week MA before recovering into December (a short Santa Claus rally).
Bears regained control around year-end, taking the DJI Index below the 55-week MA. In Q1'08, it was close to the 200-week MA. The rest, as they say, is history – the history of the Great Financial Crisis, that is.
This is a weekly chart of the Dow Jones Industrial Average index, the oldest stock index in the world.
Here we see that the second top was slightly higher than the first, and in fact marked the index's all-time high in early October 2007. Thereafter, the index dropped to test the 55-week MA before recovering into December (a short Santa Claus rally).
Bears regained control around year-end, taking the DJI Index below the 55-week MA. In Q1'08, it was close to the 200-week MA. The rest, as they say, is history – the history of the Great Financial Crisis, that is.
Memory is a funny thing. You might say, “yeah, but that was the Financial Crisis – things are different now”. But the fact is that the double top shown above occurred before the crisis. In 2007, no one expected a bear market to unfold as it did in 2008. 'Crisis' wasn’t even a term in discussion at the end of 2007!
The chart below is Chart 2, zoomed out. It's the same index as above, the Dow Jones Industrial Average Index, and this also a weekly chart: it's just a different period in time.
This chart is for the 2016-now period.
The second top is currently the all-time high recorded in early October, just slightly above the previous top. The index, meanwhile, is currently trading around the 55-week MA.
What will happen next?
If history repeats itself, we should see a couple more weeks' worth of choppy markets and a short uptrend going into December before next sell-off hits, taking the market down close to the 200-week MA in Q1'19.
The chart below is Chart 2, zoomed out. It's the same index as above, the Dow Jones Industrial Average Index, and this also a weekly chart: it's just a different period in time.
This chart is for the 2016-now period.
The second top is currently the all-time high recorded in early October, just slightly above the previous top. The index, meanwhile, is currently trading around the 55-week MA.
What will happen next?
If history repeats itself, we should see a couple more weeks' worth of choppy markets and a short uptrend going into December before next sell-off hits, taking the market down close to the 200-week MA in Q1'19.
Maybe it really is different this time... but it usually isn't. This is, at least, something worth considering before dismissing the current sell-off as a mere buying opportunity.
Latest Market Insights
Outrageous Predictions 2026
-
-
Outrageous Predictions
A Fortune 500 company names an AI model as CEO
Charu Chanana
Chief Investment Strategist
Can AI be trusted to take over in the boardroom? With the right algorithms and balanced human oversi... -
Outrageous Predictions
Despite concerns, U.S. 2026 mid-term elections proceed smoothly
John J. Hardy
Global Head of Macro Strategy
In spite of outstanding threats to the American democratic process, the US midterms come and go cord... -
Outrageous Predictions
Dollar dominance challenged by Beijing’s golden yuan
Charu Chanana
Chief Investment Strategist
Beijing does an end-run around the US dollar, setting up a framework for settling trade in a neutral... -
Outrageous Predictions
Obesity drugs for everyone – even for pets
Jacob Falkencrone
Global Head of Investment Strategy
The availability of GLP-1 drugs in pill form makes them ubiquitous, shrinking waistlines, even for p... -
Outrageous Predictions
Dumb AI triggers trillion-dollar clean-up
Jacob Falkencrone
Global Head of Investment Strategy
Agentic AI systems are deployed across all sectors, and after a solid start, mistakes trigger a tril... -
Outrageous Predictions
Quantum leap Q-Day arrives early, crashing crypto and destabilizing world finance
Neil Wilson
Investor Content Strategist
A quantum computer cracks today’s digital security, bringing enough chaos with it that Bitcoin crash... -
Outrageous Predictions
Taylor Swift-Kelce wedding spikes global growth
John J. Hardy
Global Head of Macro Strategy
Next year’s most anticipated wedding inspires Gen Z to drop the doomscrolling and dial up the real w... -
Outrageous Predictions
SpaceX announces an IPO, supercharging extraterrestrial markets
John J. Hardy
Global Head of Macro Strategy
Financial markets go into orbit, to the moon and beyond as SpaceX expands rocket launches by orders-... -
Outrageous Predictions
China unleashes CNY 50 trillion stimulus to reflate its economy
Charu Chanana
Chief Investment Strategist
Having created history’s most epic debt bubble, China boldly bets that fiscal stimulus to the tune o...