8/5/2015 – A mixed day with the Dow Jones down 10 points (-0.06%) and the Nasdaq up 34 points (+0.67%)
A pair of interesting bubble articles for you today.
First, John Hussman: Stocks Show 4 Signs of Major Decline Ahead
He cited the metric among the indicators that foreshadowed declines after peaks in 1972, 2000 and 2007:
- Less than 27 percent of investment advisers polled by Investors Intelligence who say they are bearish.
- Valuations measured by the Shiller price-to-earnings ratio are greater than 18 times.
- Less than 60 percent of S&P 500 stocks above their 200-day moving averages.
- Record high on a weekly closing basis.
I would have to agree with the points above. They give more credence to my own bearish case. A case where I suggest that we are on a verge of a massive multi-year bear market sell-off. The decline that will represent the final leg down in 2000-2017 secular bear market. That’s right folks, we are still in a bear market. The 2009 bottom was a mid cycle bottom similar to 1907, 1937 and 1974.
Today’s stock-market bubble is bigger than the dot-com boom
Today risk is everywhere! Valuations will never be as high in such a period. So those who are saying this bull market still has some juice because valuations haven’t reached tech-bubble levels are kidding themselves! Those valuations were an anomaly!
My research shows that valuations during calm geopolitical periods tend to be twice as high. But the valuations on this bad boy are already higher than every bubble or major bull market peak over the past century. The only real exception is the year 2000. And we’re not far off 1929. And that’s with the poor geopolitical period we’re in!
That includes the major bull market peaks of 1937, 1965, and 2007.
So don’t believe the “this is not a bubble” arguments. This is denial plain and simple — which has happened in every single bubble in history, especially near the top.
An outstanding article worth a few minutes of your time. It is nothing that we haven’t discussed on this blog before. One look at Shiller’s S&P P/E ratio should be sufficient enough to realize the same. For god’s sake, only 1929 and 2000 tops were higher. And not by much. What else do you need to know to realize that we are in a freaking giant FED induced financial bubble. And if you still don’t see it, I can’t help you. No one can.
If it looks like a bubble. Walks like a bubble. And quacks like a bubble. It’s a damn bubble.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. August 4th, 2015 InvestWithAlex.com
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