The market is definitely starting to look over cooked, it seems only a handful of stocks are pushing us higher and with the election around the corner can these stocks keep us moving up during this volatile period?
Not sure where the top will be but IF it comes crashing down anytime in the next few months then I'm calling a bottom roughly around the 1750 mark, which is 50% from where we are now. In any case I would expect we would at least have a slow down for a week or two now as we are at the very top of the trading range that we have been in since post the GFC fall.
Why 50%? Historically this is the same levels we fell by in both the dot com bubble (50% across 31 months) and the GFC (59% across 17 months) and there are blatant similarities with what we saw then and now. Right now corporate profits are in a bad way (blue line on chart) as well as things like the VIX levels creeping up and Bond Yields inverting (but FED stimulus affects this now), history tells us these have been leading indicators to a market correction, then add in the high levels of unemployment and bad debt which all adds up to one undeniable outcome. It's just a matter of when.
Not sure where the top will be but IF it comes crashing down anytime in the next few months then I'm calling a bottom roughly around the 1750 mark, which is 50% from where we are now. In any case I would expect we would at least have a slow down for a week or two now as we are at the very top of the trading range that we have been in since post the GFC fall.
Why 50%? Historically this is the same levels we fell by in both the dot com bubble (50% across 31 months) and the GFC (59% across 17 months) and there are blatant similarities with what we saw then and now. Right now corporate profits are in a bad way (blue line on chart) as well as things like the VIX levels creeping up and Bond Yields inverting (but FED stimulus affects this now), history tells us these have been leading indicators to a market correction, then add in the high levels of unemployment and bad debt which all adds up to one undeniable outcome. It's just a matter of when.