market wanes higher
"market wanes higher"
in the news market wanes higher? What this all about..... See below.
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Sentiment Trader can see that there might be a 'supervolcano' waiting to erupt beneath a seemingly 'beautiful' market.... ==> We have been warning about this HERE in our VIP DIAMOND newsletter <==
A 'herd mentality' has driven up valuations, the portfolio manager warns.
Warning: A correction in the market is "inevitable" and there are three key factors that could spark chaos on Wall Street, according statistics.
We liken this market to Yellowstone National Park's famous supervolcano, which many believe is close to eruption. Stocks continued to hit record highs on Friday, with the Dow Jones Industrial Average setting its 8th consecutive all-time high.
Even though [the market] looks beautiful—setting new highs, good momentum, and earnings have been coming in strong, [there are] things to worry about," as there is several pieces of news we much watch in the coming weeks.
Aside from the rise of passive investing, which is creating a "herd mentality" among investors, he also believed that the earnings picture isn't telling the whole story.
"In the 18 months ending in June, we saw companies that had no earnings, they were losing money, outperform those that were making money," We can highlight many stocks' performances this year may not be reflective of their revenues.
But the biggest threat to the market rally, we think is the current valuation levels of stocks.
SENTIMENT TRADER went back to 1994 and researched team data that said [that if we look at cyclically adjusted P/E, one out of two times] the market was down in the next 12 months, and about one out of three times it was down more than 10 percent.
DOW JONES CHART :We have broken a record on dow too. We have not had a red day or sell off for about 2 week now. WOW...This is quite interesting and incredible.
SENTIMENT TRADER notes that when valuations have been this high, 10-year returns on the S&P 500 have been either in the single digits or negative 99 percent of the time.
It doesn't mean that we'll see a volcanic eruption in the immediate future, and these market peaks take a long time, but we're definitely in the latter stages of this market advance, We say we are going to see the inevitable correction, we just do not know when that will be.
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