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The Fed Put Could Expire 2022

Equities decoupled from the underlying macro data. Many thought that the corona crash could fix that, but it didn’t. Valuations became even more expensive instead. Several reliable indicators are as stretched as they have never been before. An example is the composite market value relative to GDP. It stands at more than double the US GDP and is 75% above ...
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The Good, The Bad, And The Ugly

US equities recorded the best month of the year this October. A strong rally took the broad-based market to new all-time highs. The first week in November continued just as October ended. NYSE, S&P 500, Nasdaq 100, Russell 2000, A/D Lines, and Value Line Geometric Line finished last week at all-time highs. The Good Momentum is strong and that’s good ...
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Be Greedy When Others Are Fearful

This September has been disappointing for most equity investors. The broad-based S&P 500 index corrected roughly 5% and investor sentiment deteriorated further. However, those who read our most recent write-ups know that the recent correction wasn't surprising. A 5%-10% correction has been overdue, according to long-term market statistics. The S&P 500 increased for more than 200 days without correcting at least ...
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Who Cares About Bubbles? Just Buy That Dip!

Stocks are not done to the upside. Technicals remain constructive despite a likely 5%-10% dip. However, the air is getting very thin for bulls up here. Moreover, the long-term outlook is bearish. Extremely expensive valuations and evidence of excessive speculation among investors lead to this conclusion. The buy-the-dip crowd is jumping in more rapidly as dips continue to get shorter ...
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A Correction Is On The Way

Buyers wasted no time and initiated a fulminant risk-on rally after the mid-July correction. Consequently, the S&P 500 did not even reach a 5% correction and rallied to all-time highs. A 5% correction has been typically occurring about every 94 trading days since 1929. It is overdue as more than 180 trading days have passed since the last 5% correction ...
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A Speculative Bubble Keeps Inflating

Paul Samuelson famously stated that the stock market had predicted nine of the past five recessions. It’s a remark that is often repeated to mock the predictive accuracy of the stock market for the economy. Nonetheless, both move together. There were more than twenty recessions recorded by the National Bureau Of Economic Research in the past 170 years. All of ...
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