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This week may turn out to be one of the more interesting moments in market history!
Heres an excerpt for John hussman's latest letter.
"If extreme valuations alone were enough to cause a market collapse, the market would have collapsed quite a long time ago. But valuations are not enough. It’s extreme valuation, coupled with deteriorating or divergent market internals (signaling a subtle shift toward risk-aversion among investors) that opens up a potential trap door."
Facebook stock is down almost 20% since yesterday.
High yield credit is on the march higher off all time lows in late Nov 2017.
This market is more overvalued than it has even been in history!
Margin debt has topped out again.
So,
Extreme overvaluation, - Margin adjusted cape,
Coupled with a shift from risk-seeking to risk-aversion - facebook stock crash and yields rising in the credit markets.
At a market high never before seen,
With a decline in leverage on the cards again - Nyse margin debt.
It all adds up to an ugly picture for the future of this market.
This is a sinking ship people, get out while you can.
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US 10 yr Treasuries.
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[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]My Bias: topping in a large correction wave [4].
Wave Structure:
Long term wave count:
Contracting triangle possibly complete and an impulse wave down now beginning again.
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SILVER
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[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]My Bias: topping in a large correction wave [4].
Wave Structure:
Long term wave count:
Silver is approaching the end of wave (c) blue.
I am looking for an impulsive wave to form off the eventual low to signal a turn higher.
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S&P 500.
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[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]My Bias: topping in a large correction wave [4].
Wave Structure:
Long term wave count:
A possible ending diagonal is forming in wave 'C' of (2) and we should be very near the end of that wave.
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