Stock market Crash Incoming!!! I don't think so, at all.

I have some reasons for NOT believing all the news flow about an impending Stock Market Crash/Shakeout.

1. Crashes are unexpected. There has never been a widely-forecasted crash, because crashes come when something extraordinary happens, not when "it's all over-priced". As JM Keynes said, "Markets can remain irrational for longer that you can remain solvent". Obviously, all bubbles burst some day, but there is usually a lot hype just before, not a load of doom and gloom warnings. The chart shows the recent pullback for what it is, a pullback. It isn't even as deep as the previous one.

2. There is a lot of talk about the strong USD. This can be a forewarning of stock market weakness, for sure, and if it truly was strong and some other things were true (see lower down) then maybe. However, the DXY (the USD Index) is strong BECAUSE THE EURO IS WEAK, and the EURUSD price is 40% of the DXY . For an explanation of DXY go here:

3. If the market is truly worried about a crash, then the Risk-off currencies (see explanation here: would be weak and the Risk-on currencies would be strong. JPY is a risk-off currency and gets bid up on stock market weakness, here is the JPY Index:

Here is AUD Index (a risk-on currency):

Hardly weak right now.

4. The composite man way of thinking is to sucker as many people in at the top as possible.

So, the media report a pending crash, people get worried and sell, then the market recovers and they think "how silly we were" and in they go again buying stocks, because it's all over and everything is just fine again.

It's only after the next big rally that anything might happen, and you won't be forewarned that time.


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