4/7/2015 – A down day with the Dow Jones down 8 points (-0.04%) and the Nasdaq down 7 points (-0.14%).
The stock market continues to behave, more or less, as forecasted. If you would like to find out what happens next, please Click Here.
How can I tell that we are in the stock market bubble?
This is rather simple. Just take a look at today’s P/E ratio (see the chart below). The chart displays Shiller Adjusted P/E Ratio of 27.12 (Current S&P 500 PE Ratio: 20.39). As you can see for yourself, we are once again pushing the limit. This ratio becomes even worse when we realize that most of the earnings over the last few years have been driven by QE, Zero Interest Rates and stock buybacks. Not fundamentals. Just as a reference points, bear markets end with a P/E of 5-10 (after earnings have collapsed).
In the meantime, the US Economy is rolling over the earnings are expected to decline……BANK OF AMERICA: We’re heading for an earnings recession
“In the last two periods of dollar strength (1978-85, 1995-02), which each included at least one recession, PE multiples expanded by 39% and 52% (3 and 8 multiple points), respectively,” BAML notes. “Similarly, in this cycle the S&P 500 PE multiples have continued to rise amid the years of significant dollar strength.”
I have to laugh at this. Bank Of America expects P/E expansion to continue while earnings collapse, the US economy rolls over and the FED possibly hikes rates?????
This insanity only makes sense in a financial bubble and that is precisely where we are today. In other words, the stock market is perfectly setup for a big decline here. The question is, are you ready for it?
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. April 7th, 2015 InvestWithAlex.com
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