It is hard to get people to listen when the SP500 is near an all-time high and the US economy appears strong, so I wrote “Why I Am Defensive and You Should Be Too”. Take a look please.
So tell us Fed Chairman, with the financial markets on the verge of full melt-up based on the Fed’s money printing past and not the real economy, what are you going to do?
If bad economic news sending the stock market soaring does NOT make sense to you, then you are trying to think rationally. It makes perfect sense when you consider how distorted our monetary and fiscal policies are.
We look into key market factors to determine whether we will see 1) another continuation of the bull market, 2) a sideways pattern or 3) the start of a bear market. It’s becoming clear.
The one thing about market tops is the forecast for the future HAS to be good and there HAS to be expectations for it to “continue for years” otherwise the selling would have already started.
The market is sitting in a precarious position as the trade deal with China falters.
Who needs an economy when you can print-baby-print or leverage up the whole stock market via buybacks on the open market or with leveraged mergers and acquisitions that come with golden parachutes for the CEOs.
The bottom line is consumer spending which makes up the bulk of the GDP model was down and business investment was down. And large inventory building is never a good sign and points to weaker growth in the out quarters.
I am reading a lot about the divergence in small caps from the large cap funds. It is worth watching, but it might just be seasonal tendencies.