Uncle Cholo warns of impending dollar disaster, predicts 80% drop in S&P 500 by 2030

Summary of the news

• Uncle Cholo, a famous investor, pointed out that the technical chart of the DXY dollar index has entered a full wave 5, with a possibility of dropping to 70-80 points in the long term.
• The expected timeframe for this is around 2030, which Uncle Cholo sees as a significant turning point for global civilization from the West to the East.
• The S&P 500 index has not yet reached the peak of the major wave, so U.S. government bonds are still considered a safe asset for now. However, if prices turn down, it could plunge by as much as 80%.

How trends affect prices: Bearish

Uncle Cholo's perspective is negative towards the dollar and Western assets in the long term, but it is an analysis looking several years ahead, not a signal that will immediately impact prices in the short term. Investors should interpret this as information for long-term planning rather than making immediate trading decisions.

Uncle Cholo, a renowned investor and founder of the CDC Chaloke.com club, shared his analysis of the economic crisis on the program Business Tomorrow on August 12, under the topic "Is the big downturn starting? Watch for the world to change before 2030."

Uncle Cholo highlighted that the U.S. dollar index (DXY) breaking below the critical level of 100 points may just be the beginning of a "major downturn" that could pull the dollar down to the 70-80 point zone by 2030. He views this phenomenon not just as an exchange rate issue but as a significant warning signal of the transfer and shift of economic power from the Western world to the Eastern world.

Host: The dollar is down while gold is up and oil is down, but the dollar index has dropped below 100. This is a round number that everyone is watching. In technical terms, how significant is it for the DXY or the dollar index to drop below 100? Can you analyze this for us?

Uncle Cholo: The index compares currencies against each other. It can go up or down and can be manipulated; it’s not something to watch too closely. We need to look at each currency in comparison.

But let’s look at the Dollar Index first. The DXY should be around 100 and stay around that level. It can’t go anywhere if the index is 100.

Right now, the dollar is very low at 70, and if it goes back up to 100, it means there is new strength. We don’t know why, but this chart shows we need to find the highest and lowest points. Therefore, history must start from here, beginning in early 2008 on the left side, which we don’t need to consider because it’s the lowest point.

Starting from early 2008 at the lowest point, there is a clear pattern of 1, 2, 3, 4 sideways. Next, it will be wave 5 and is about to go down. This means that in the long term, the Dollar Index is likely to drop below 80. It could drop significantly based on this chart.

I think... but it will take a long time. Not immediately; it will take years. Because from this chart, the Dollar Index is very bearish.

Host: And what do you analyze to see it dropping below 80, which is close to the levels of 2008?

Uncle Cholo: The base will be around 70. The index base of 70 can rise to 110, which is also a significant increase.

When it rises to 110, during the downturn, it will drop about 80% of that rise, landing around 80 or 70. According to the principles of Elliott Wave, we know the target is around 70-80. It is likely to drop in the long term.

Therefore, looking at this chart, the dollar has lost strength. We see a clear pattern that this is 1 and a b c where c is lower than a, which is wave 1 and 2.

Then it rises to 1, 2, 3, 4, 5 as wave 3, a b c as c. You see, it follows the textbook perfectly (wave 4 rises above wave 3). Then wave 4 to 5 usually goes slightly higher than wave 3, so it’s around here, 4-5 around this area.

It means that Wave 5 is complete. When Wave 5 peaks, it will drop A B C to around 70-80 again. It has just started its descent. Therefore, it looks bearish.

Unless this is not yet Wave 5; this is just Sub-wave 1 2 3 4 5 within Wave 5. If that’s the case, it could go up a lot more.

But if it’s a Sub-wave, 1 2 should end here and continue. It shouldn’t be lingering and delaying this much.

After this formation, it leads to the belief that this is finished: 1 2 3 4 5 is complete, and it is about to drop A B C, targeting around 70-80. That’s all there is to it.

If we look at the actual target, we can measure it using Fibonacci Retracement. It’s around 78.6%, 88.7%, 94.2%.

So these three lines, if we want to frame where the dollar will go in the long term, we have to start from here.

This is the target, suggesting it will drop to the lower frame, around a target of about 74. Very bearish.

Why 2030 is a Year to Watch
Host: So can we compare the core timeline from now, which is at 99? How long will it take to reach that level, Uncle?

Uncle Choloak: The Fibonacci wave that works is vertical (price). In the horizontal direction (time), it’s not very certain, but we can estimate from the shape.

If it’s a Normal Distribution, it should end around this area, approximately around 2042.

However, price fluctuations are not a Normal Distribution. They tend to skew upwards; when it’s down, it’s fast. Therefore, the upward trend has been from 2008 to 2022.

We expect the downward trend to reach around 2030, which means in about 4 years, there will be a change in the world.

Civilization will shift from the Western world to the Eastern world because we can see from the technical graph of the dollar value, and it will end around 2030.

Host: If we look at it comparatively, if you say there will be a transition of prosperity in Civilization, what assets or currencies should we compare with the East, Uncle?

Uncle Choloak: From the stock market index. Most money is in the stock market. Look at the index, for example, the SET Index of Thailand.

Lessons from the Tom Yum Kung Crisis to Warnings for the S&P 500
Uncle Choloak: It was like this: In 1992, the Tom Yum Kung crisis occurred. At that time, there were issues with the Thai baht. People just started to realize there were currency issues, and there was an effort to support the baht by selling dollars in Singapore and buying baht back to stabilize it. It was a political reason, nothing more.

But this reason allowed many people to profit. There was speculation and insider information.

When George Soros caught on, it was like now; the dollar is weak, but it’s weak against every currency. However, at that time, the baht was strong only against the dollar.

George Soros caught on and attacked; our baht was floated and devalued immediately... and we ended up in debt to the IMF.

From the SET Index at 1,800 points, it dropped to just 250 points.

Nowadays, our stock market still talks about major stocks, which are still foreign-owned, you see?

Therefore, we know that if Wave 1 drops 2, it’s disastrous for any country. If Wave 1 drops 2 in a Major Wave, it’s disastrous for the kids. If it’s 1 drops 2 in the Grand Cycle Wave, it’s a more adult-level disaster.

If 1 down 2 of the Super Grand Cycle Wave is very frightening.

If 1 down 2 of the Century Wave (a wave that lasts 100 years) means that this country has no future.

And after how many years... nearly 30 years have passed, and we have just begun to rebuild ourselves. Until today, we have only just recovered to a level close to the past. We have only reached this level.

We are about to rise further, but you see, from just a small mistake, we took nearly 30 years to recover. This is a very rough overview of the big picture.

When we see the big picture like this, let's take a look at the American side, such as the S&P 500 index (or SPX)... The problem is that we have already been destroyed by 1 down 2, but America has never encountered wave 1 down 2.

If we assume that this is wave 1, which goes up 1 2 3 4 5, and this is a big 1, then wave 2 must go down 80%, meeting at 500 points of the S&P index.

That's why I say that civilization will disappear from this western land if this is 1. But right now, this is not yet 1 and not yet a peak. Why? Let's expand the chart.

Expanding this part, can you see? It is not yet a peak. There are still 2-3 more moves, and it can still go up further. Go ahead!

Therefore, this is not yet the peak, and it is not yet wave 1. Thus, investing in U.S. government bonds right now is still considered the safest, at least yielding 4-5% for sure. This is still safe.

But whenever this becomes a peak, like what... it will be like the SET Index at that peak.

That peak was disastrous. Now, the S&P still does not have a peak; it keeps rising like this.

Therefore, we know that America will continue to have influence over the world, but it is close. If it adjusts down from here, it will be finished.

Warning Investors to Move Funds to the East

Uncle Cholo: We must prepare in advance that this is a symbol of the movement of world civilization from the West to the East. Because if we look at China, Vietnam, or our Thailand, the SET Index is about to rise.

We should prepare. I always warn that large investors who invest in the New York, Chicago markets, or elsewhere in the West should find ways to move their capital to the East. This is a very big picture, looking ahead for decades.

Author's Perspective: Uncle Cholo's analysis provides a big picture view over several decades, relying on Elliott Wave and Fibonacci principles, which are useful for understanding long-term economic cycles. However, one should be cautious that predictions using technical graphs over decades carry high uncertainty, and fundamental factors such as Fed monetary policy, trade wars, or geopolitical events can change the direction of the dollar and stock markets faster than graphs can predict. Therefore, investors should use this perspective as supplementary information, not as a prediction to fully trust, and always monitor signals from fundamental factors alongside it.