Potential Runaway Move
Over the last 7 years I’ve repeatedly warned that we no longer have free markets. Governments figured out in 2011 that if they could artificially inflate the stock market they could delay the normal business cycle. This ushered in a new age of market manipulation. Anyone who doesn’t factor this into their analysis is going to sorely under perform or lose money.
Now the Nasdaq is at a crossroads. In a natural market there is no way the index breaks through the all-time highs on its first try. It’s simply way too late in the daily cycle and sentiment is way too optimistic. In a natural market we would experience a profit taking event at this juncture.
But if the powers that be want to prevent that natural correction,m the easiest way to do it would be to manufacture a breakout right here and abort the natural profit taking even that should occur. This would have the potential to create a runaway move into the elections. We should know in another day or two if this is happening.
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One of the greatest traders of the modern era agrees with me. We no longer have free markets. Segment 6. Trader Vic.
look at SP 500 weekly chart during 1994. I read some analysis that suggested we could stand before something similar. In 1994 the bull market had been going for many years – since 1987 – and people were apparently only talking about the likely end of it. And look what we had; a breakout that never looked back, the bull trend accelerating, going 300% – now wouldn’t that be something:)…
I’ve been saying for at least the last two years that we still have a bubble phase ahead of us.
I have no idea why these idiot perma bears think we are going to have deflation. That’s just insane. When governments print this kind of money the outcome is anything but deflation. It’s always been inflation. Even in the 30’s when Roosevelt devalued the dollar it stopped deflation in its tracks.
“Great minds think alike.”
I have no problem understanding why the bears are bears; they look at the length of the current bull, the frailty of the economy, the political issues, the manipulation and I would agree it can feel pretty scary. I however agree with you that they are wrong; this is a bull market!
Again I must point out that 94 looks pretty similar to now if we assume an ensuing acceleration to the upside. And that was way before QE. So for me there are potential real financial reasons for a bull breakout, look at the enermous techie developments now for instance, and you mention biotechnology yourself:). And look at the chart pattern on Nasdaq; a gigantic cup and handle. And of course the negative sentiment and therefore low retail participation of this bull.
http://finviz.com/futures_charts.ashx?t=DY&p=m1 run away??