A negative day with the Dow Jones down 219 points (-0.88%) and the Nasdaq down 42 points (-0.55%)
Today’s stock market action was nearly perfect. That is, if we consider our short-term projection and the structural composition of the market as we approach our all important TIME turning point of XXX.
If you would like to find out what happens next, in both price and time, based on our timing and mathematical work, please Click Here
The stock market is priced for perfection. As I have been arguing, we are at the highest valuation level in the stock market’s history. If we make certain adjustments for 2000 top distortions (lack of tech earnings) this become clearly evident. The following chart makes it abundantly clear.
Still, all sorts of bullish projections are haunting this market. From yield curve inversion no longer being important (its different this time) to GDP growth of 5%+.
None of that matters, but here is what does. 
As the chart above clearly illustrates today’s earnings are just slightly above 2014 levels. All while multiple expansion has driven valuations into “are you freaking kidding me” territory.
Since 2016 earnings bottom we had nearly everything thrown at the market to maintain today’s valuation levels. Let’s see, the FED maintained liquidity, Trump’s tax cuts, corporate buybacks, MAGA delusions, etc…..
The opposite is true today. The FED is finally taking away the proverbial punch ball by deleveraging their balance sheet and rising interest rates, the yield curve is inverting, Trump’s tax cuts are already priced in, trade war is accelerating and President Trump is acting all sorts of crazy. Sure, corporate monkeys are still buying back their stocks at record levels, but that is a contrary indicator.
That is to say, the stock market is priced for perfection while underlying conditions have deteriorated significantly. As a result, the risk of a massive correction is mighty high right now.
Having said that, our work in crystal clear in what happens next. If you would like to find out what the stock market will do, in both price and time, please Click Here.
