I fully realize that âcrashâ is a very strong word full of all kinds of very definite connotations, but I really canât think of any other way to articulate what is happening .
Whenever the wizards at the Fed run the proverbial printing presses to create more fiat dollars out of thin air, those inflationary dollars have to seek out a new home and a great deal of them begin bidding competitively on the already overvalued US equity markets. It is no coincidence that the S&P 500 bubble really ignited after the Fed began aggressively goosing US money supplies in the mid-1990s!
Any way you slice it though, the fundamental and technical case for the S&P 500 is certainly for another serious downleg approaching, probably not carrying us to the ultimate bottom, but definitely obliterating another significant percentage of already bleeding investorsâ scarce capital. Once the mighty index trades below its neckline of around 950 or so for a few weeks, the selling pressure will probably intensify immensely as fear increases and investors and traders decide discretion is the better part of valor for now.
While us private investors canât save the world, we can zealously try to transcend the real-world Matrix of popular opinion on the markets. Rather than living in the confusing world of Wall Street lies and perpetual promises of âthe bottom is inâ or the profit recovery will roar forth ânext quarter,â investors can seek to understand the markets as they really are.
Like the movie Matrix, only a relatively small number of contrarian investors truly seek to understand the markets while the rest of the investors are trapped inside, by their own choice, and have no hope of escape, blinded by their own delusions.
Whenever the wizards at the Fed run the proverbial printing presses to create more fiat dollars out of thin air, those inflationary dollars have to seek out a new home and a great deal of them begin bidding competitively on the already overvalued US equity markets. It is no coincidence that the S&P 500 bubble really ignited after the Fed began aggressively goosing US money supplies in the mid-1990s!
Any way you slice it though, the fundamental and technical case for the S&P 500 is certainly for another serious downleg approaching, probably not carrying us to the ultimate bottom, but definitely obliterating another significant percentage of already bleeding investorsâ scarce capital. Once the mighty index trades below its neckline of around 950 or so for a few weeks, the selling pressure will probably intensify immensely as fear increases and investors and traders decide discretion is the better part of valor for now.
While us private investors canât save the world, we can zealously try to transcend the real-world Matrix of popular opinion on the markets. Rather than living in the confusing world of Wall Street lies and perpetual promises of âthe bottom is inâ or the profit recovery will roar forth ânext quarter,â investors can seek to understand the markets as they really are.
Like the movie Matrix, only a relatively small number of contrarian investors truly seek to understand the markets while the rest of the investors are trapped inside, by their own choice, and have no hope of escape, blinded by their own delusions.
