Short

You know(!!) you are in a bubble ...

By Nemo_Confidat

Updated

... When:

The funding a 36-year stream of expected inflation-adjusted spending requires over 38 years of money up-front;

Every single decile of S&P 500 components is at record valuation extremes; hussmanfunds.com/wp-content/uploads/comment/mc210315n.png

The amount of leverage in the system (U.S. equity markets) is now easily the highest in history, by any measure, not just in absolute terms! (relative to GDP, etc. Margin Debt/GDP = Margin Debt/Market Cap x Market Cap/GDP Showing insane over-valuation across the board!);

In a world where speculators now value the stock of bitcoin at one-fifth the value of the entire U.S. monetary base;

The current SPAC mania is identical to the South Sea Bubble in as much as: "Let them see not what they do!";

In an economy with $11 trillion in corporate debt at $58 trillion in equity market capitalization;

When U.S. Market Capitalization exceeds 263% of U.S. GDP (the norm, not the low, being 78%);

Anyway, this is likely a Double Top here.

Note

** Foot Note;
The technical picture (projection) is rather strait forward here.
As it happens, it also coincides with every reliable, forward measure (leading indicator), projecting a *** minimum decline of 70% in the SP500 *** upon the completion of this next full cycle.
That 70% projected decline would be nothing more than a run-of-the-mill, garden variety return to historic norms. E.g. Absolutely nothing special or out of the ordinary. - Which is why it is projected as a *** minimum decline ***.
(If its any consolation, the Dow (DJIA) should fare worse but at the end it will be a little difference without distinction.)

Note

Also, the Median SP 500 Component Valuation link - above - got somehow mangled. Here is that link, again;
hussmanfunds.com/wp-content/uploads/comment/mc210315n.png

Note

This is likely to have a very hard time getting past here. SELL it!

Note

Expect a strait drop here, right onto the 20 Day EMA - should that be able stop it.

Trade closed: target reached

FLAT - for now; +48.25

Note

... you also know(!!) this bubble is in it's final moments ...

When;

This happens;
at the bottom (update) of this post;

The Nasdaq is leading the whole US Index complex lower ....

... 6 strait weeks in a row - and without any sign of relenting;
From this post;

The FAANGs are on a relentless march Down vs. the DJIA;

When even the 18 Central Banks (led by the SNB) that (re)inflated U.S. Equities, in a coordinated manner, are at a point that *** they uniformly refused to purchase any more Nasdaq stocks since February, 2021! *** (Source; The CME's own Central Bank Incentive Program (“CBIP”))

When according to the "talking heads (on MSNBC, etc.)" a collapsing U.S, Trade Balance "... is the sign of a vivarant economy.";

When no less than three mammoth hedge funds/traders/positions get *** force liquidated *** in one short week - as in; last week;

When U.S. Housing Starts (a leading indicator) suddenly post a 2 STD decline;

When the total Market Cap of the top 1500 companies, that were unprofitable for each of the past 3 years, reaches $2.5 Trillion;
pbs.twimg.com/media/ExakWYDWYAMSVIH?format=jpg&name=large

When U.S. Fed. purchases of Mortgage -backed Securities suddenly takes on an exponential increase;
fred.stlouisfed.org/tags/series?t=mortgage-backed

and so on...

Nemo_Confidat

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