9/15/2015 – A positive day with the Dow Jones up 229 points (+1.40%) and the Nasdaq up 55 points (+1.14%)
I have discussed this over the last few months, but I believe Robert Shiller hits the same nail on the head as well.
Robert Shiller: THIS is the sign we’re in a bubble
Just before the dot-com bubble burst, investors had very little confidence in stock valuations, but they were confident in the market in the short term, he said.
“That’s the sign of the bubble. They’re worried but they’re thinking they’ll get out,” he told CNBC’s“Squawk Box.” “This can suddenly turn, and we’re looking somewhat like that now.”
Bingo. And as I have pointed out here at least 100 times this year, today’s Shiller Adjusted S&P P/E Ratio is the 3rd highest in history. Right behind 1929 and 2000 tops.
Plus, after a 5-7 year bull run, most investors today assume 2-3 things .
- Every sell-off is a buying opportunity. “Buy the dip”.
- The FED will be able to backstop any and all declines or recessions.
- Someone will ring the bell at the top and everyone will exit the market in an orderly fashion. Holding hands and singing Kumbaya.
It is my hope that most reasonable people will quickly realize how ridiculous all of that sounds. And instead of adhering to such thinking, investors might want to ask themselves the following questions…..
- What if we have shifted gears into a bear market and every rally should now be sold?
- What if the FED is powerless….we are already at zero….what else can they do?
- What if the market corrects itself in a rapid and violent fashion? To the point where no one is able to exit? Just as the Nasdaq did in 2000.
I believe those are the right questions to ask. Everything else is just noise.
Listen, as we head into the most dangerous time of the year, not many people anticipate a further correction. Let alone a crash. My friends still laugh at me when I suggest we might re-test late August lows. An ominous sign? We will soon find out.
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. September 15th, 2015 InvestWithAlex.com
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