The S&P500 is clearly topping out at 3015 in a broadening formation. This index is overvalued using DCF valuation (5% growth, 8.6% discount rate) by 15%. Expect a fall down to 2500. The Nasdaq 100 is also topping out and the Russell 2000 never confirmed the highs in these indices. Look at the RSI, ROC and MACD. All have topped out and are turning lower. I am expecting Trump to make more tweets about putting tariffs on European car imports and other tariffs in addition to China. Compared to 2000 and 2007, this market's P/E ratio is high when considering how low inflation, interest rates and the earnings growth rates are. Stocks to short which have absurdly high P/Es include TSLA, SQ, GDDY, UBER. You could short AAPL too on a trade war escalation. Just a footnote, Netflix has dropped 12% overnight on decrease in growth of subscribers. Is this a sign of things to come shortly?
Second footnote: Broadening formations were seen in some stocks in 1929. Is this a harbinger for today?
Second footnote: Broadening formations were seen in some stocks in 1929. Is this a harbinger for today?