Sound familiar? We have a raising #OIL that has reached levels not seen in over 14 years. Let's remember what happened back then, The oil was booming, the economy was booming, the housing bubble was at its peak. It looked like a grand finale when Oil reached its peak. Just before it went that high the #SPX started to decline, the economy had reached an overheating level, we lived the irrational exuberance as it was called by Alan Greenspan, and then ... the bubble bursted.
The liquidity in the economy can't just keep on going up forever. If the production of goods and services is not at the same pace as the economic growth then we have inflation and the cost of energy goes higher, sending us into an escalation of prices, which is what we witnessed back in 2008 and now in 2022.
We have again a housing market bubble, where the prices just seem to be following the same pattern as the oil prices, all of a sudden they went to the roof in a very short period of time. The momentum is at its maximum, and it usually signals that an overall market correction is needed since the prices have already deviated way off from its natural trendline. It always happens, once the euphoria hits the markets, it's when the smart money cashes out and switches gears. It has always happened and I wouldn't be surprised if this happens again.
“Patterns repeat, because they're based on human nature and it hasn't changed for thousand of years”.
- Jesse Livermore
The liquidity in the economy can't just keep on going up forever. If the production of goods and services is not at the same pace as the economic growth then we have inflation and the cost of energy goes higher, sending us into an escalation of prices, which is what we witnessed back in 2008 and now in 2022.
We have again a housing market bubble, where the prices just seem to be following the same pattern as the oil prices, all of a sudden they went to the roof in a very short period of time. The momentum is at its maximum, and it usually signals that an overall market correction is needed since the prices have already deviated way off from its natural trendline. It always happens, once the euphoria hits the markets, it's when the smart money cashes out and switches gears. It has always happened and I wouldn't be surprised if this happens again.
“Patterns repeat, because they're based on human nature and it hasn't changed for thousand of years”.
- Jesse Livermore
