Hello everyone this isn't the type of topic I usually like to talk about as I feel it is very over saturated and people say that the market is primed for a crash and a bear market is coming all the time. But within in the next few months and maybe if were lucky a year we are in need of a long bear market of at least a few months and maybe a year or more. The S&P is up 500% from the last actual long bear market. in 2008. We have had the odd flash crashes since then like in 2015, 2018 and 2020. But none of these crashes can compare to the crashes there were in dot com crash and the financial advice. Even in 2020 we saw a big crash but this crash really only lasted for a 2 months and we came back going straight flying up. I assume we will have around a 50% drop when the bear market does finally come. This will probably be around the same time as crypto winter. Which will mean that there will be even less ways to make money in the markets.
Things that go to show we are bound for a crash are things like the buffet indicator being way over ATH's, inflation and the mass printing of money, everything skyrocketing in price (lumber etc), record high margin debt, 40 year low for interest rates and the price to earnings ratio of the S&P. All of these things are just things with a basic amount of research that shows the market is at an unsustainable highs.
From a technical stand point as well the MACD is at ATH's and is very over extended as well as the RSI now in the overbought area
Anyway to conclude I could talk about this forever but in the mean time I would just keep in the mind because all bubbles must pop eventually and although we all wish stock only go up that just isn't the case and we are sadly due for a time where instead will only be going down. In the meantime I would also look for shorts on the SPY and DOW with options or in things like the SDOW etc.
If you agree or disagree or wanna talk about it be sure to leave a comment, if you like my ideas be sure to leave a follow and like.
I absolutely agree with you that it should come down. It is impossible to invest right now. There is not a single thing I see worth buying. It is all a casino now, greater fool theory in absolute effect. That said, the market is controlled by the Fed and government and it will not drop until they want it to. We have been in a bull market for 11 years and I think the rich are getting too used to getting the free money to allow them to stop now. There will be continued and ongoing stimulus, the Fed will never raise rates or taper, and this will likely continue, but I'm not buying into it. Its not a game for small accounts.
CJS04
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Nah. Flash crash is how things work these days. Everyone sees the bottom and from their phones buys. The days of reading the paper for stock prices are long gone. It’s instant now. No commissions. Smart phones that weren’t even around in 2008. There were no apps like today. It’s a changed game. Yes things need a good bear market. No question about that. Even the bulls have to agree. But a year long no.
vlaire
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@CJS04, Interesting point, didn't think about it that way. Even if that is the case though eventually we are bound to go through something similar to 2008 where the government or somebody makes a mistake in the system or perhaps there is a large war where people simply won't be able to afford to invest even if it is low.
CJS04
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@vlaire, I honestly dont try and put a headline to the why. Nor do I really believe whatever the excuse is anyway. (Like 2020, they knew fully what they were doing, brought it right to the trend and in some cases a step below and ran it to the ceiling and beyond. I dont believe for a second its anything but the market doing what the market does. The headline it is what it is. I just stay focused on the chart.
Base the current price to a factor of m3 money supply and you will see a very healthy upward trend going on. Not too sure what is unhealthy over here
stockSMASH
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@poister198, makes me very happy to read your post
Franklin_Financials2020
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I think old rules are being applied to a new day and age where anyone can buy or trade stocks from their phone. If a pandemic could not breakdown this market and keep it down for more than 2-3 months, what is it going to take for a year long correction lol? I do not see it happening. The market looks like it should for a massive influx of new investors. Whenever the market dips, us millennial investors buy the dip and a week or two later we are back at ath territory haha.
NordicTrader93
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@Franklin_Financials2020, This is not sustainable in the long run though, everyone can't get rich. It was the same in 1929, large influx of new investors. Even the shoeshine boys, as the saying goes. Today we have robin hood and wallstreetbets and whatnot, but fundamentally its all the same.
pogicraft
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@Franklin_Financials2020, maybe.... for one thing, people don't hold cash anymore (generalizing to mean institutions ironically) They sell one stock and rotate into another within a day. Nobody's waiting for a good price to buy, so one thing's always pushing another thing up and then vice versa