TODAYS ALARMING CAPE CHART:
Today the CAPE ratio of 27.&% in price earnings ratio on ten-year averages is as high as it was before 1929 – 2000 – 2010 – 2008. AS CAPE of one of many factors reached this level a huge historic just HUGE SELLOFF followed. Said another way – the TRUMP rally effect from Trump’s uncanny ability to inspire so many may run a short term DOW through 20,000 and set another record. We call this an absolute fools rally. Dont get sucked in.
History tells us the market was frothy just before Trump won. Since then the market has ramped up another tier on multiples territory not breached save before the largest corrections we know to report to you. Only then. This is a warning index. The market was frothy before the Trump election now its in a blender vortex of super froth. So do we see headwinds in 2017? You bet.
Short term will the insane rally march up ever up?
I would not keep my nest egg in this rally.
I’d sell now and park my funds to see a new trend line by March forgetting if you lose.
No one can predict the next correction.
Given the CAPE ratio we now do not think the correction will be gradual. We believe it will sudden as in the past, without any warning or indicator, and massively damaging a SUPER CRASH.
One contagion event will trigger it as the house is standing on only quicksand economics.
Park your nest egg in the fools rally and risk …up to you.
The data continues to point to a correction the date of which no one can predict. BE SAFE with your assets out there. The risk is really high now.
In 1929 – 2000 – 2008 – the experts all said …oh it will never end…oh this is just the start of the next cycle….oh this rally is early….no one said to you all – sell. I am. Sell.
Factoid -this is now the second longest ( double the norm in time ) expansion in all of recorded market history. Folks NEWTON had it down right –
…what goes up WILL come down…..
How much did you make when the crash destroyed your nest egg? When liquidity stops and you can not get out at all as is the case with ETF’s soon. The short sellers in ETF are about to make more profits than short sellers in Sub Prime.
The market risk folks. Has moved from the warning to HIGH to HIGH ALERT to 2017 SUPER HIGH ALERT.
On my chart.
Berny Dohrmann – I’m so consistent – noticed that yet ?