With the S+P 500 hitting 3000 this week, the Federal Reserve has engineered the longest growth expansion in history.
Index Funds tied to the S+P 500 are rising at double digit rates. Put another way, the wealth effect bestowed on the average investors for this long is unprecedented.
How much longer can this phenomena continue to play out ? An environment where risk is completely downplayed, and only past performance in the bull market is highlighted.
The mind set and psyche building here, is that there is no other place to be but in the stock market. The fear of being left out of the spoils, is now greater than the fear of any kind of loss. Think about that for a moment.
My own market opinion here continues to be that a market bubble of almost historic proportions is being built.
I base that opinion on the sharp technical breakdown in the market in late 2018, was the real thing, and that the almost straight up V bottom rally in 2019 is false in structure, and thus extremely vulnerable to a shock in the financial system.
It has been years, as unbelievable as that may sound, since program trading limits on S+P 500 Futures have been limit down Most traders and investors probably have no idea what that price limitsare in today's market.
The fact is that the S+P 500 Future can fall as much as 20 %, in one single trading day. The odds of that happening have been discounted to next to nothing probabilities by those who are long this market. Enjoy the continued ride up is the motto they firmly believe in.
So to all those who may wonder, and question my continued bearishness on this market. I shall not be in this market on the long side, when this market expansion finally ends. I am already hunkering down, looking for the optimum price levels to short this market. Frankly I don't care about the additional gains that can be made on the upside. Someone else can have those.
As you can see,,my bearish market opinion continues to be one of the most contrary of market opinions out there.
I take great comfort in knowing that my bank is safe and secure. I sleep well at night because of that.
I suggest you should at least.consider doing the same at some point in the future.
When the stock market bubble finally bursts you will wanna keep all this prior planning to yourself, for there will be multitudes standing around dazed and confused, wanting answers as to what just happened to their world.
Bubble in the making.
Let the market tell you, is the best advise I can give you.
NathanielTosh
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Great title!!
leftey
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Very good.
You're not alone. Also agree the PPT catch in Dec was beginning of a false market rally... 'training wheels'. Unbelievable to watch as mega caps advance while entire market is finding lows or barely holding flat, with random energy.
How long will they continue? DT, and jp got some real issues they're going to need to figure out.. and making the economy look proper is not the answer.. imo.
maxaus
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@The_Unwind great post. From your perspective when do you expect (month) this crazy bull to end?