S&P 500: Six real signs of an upcoming crash.
Updated
Hi traders,
Here's a quick overview of the main reasons why the S&P500 could enter a one-way street in the coming months.
Any comments are appreciated. Thanks.
1. The index is less than 5% away from record highs, yet US unemployment rates are sky-rocketing, the country has officially entered a recession, and other regions will likely follow.
Global growth forecasts have been lowered to -5% (the lowest since WW2) and corona-fears haven't dissipated yet. Company profit margins have been badly hit and many will have to close doors.
So what is the S&P500 doing there at above 3,000?
2. The put-call ratio reached marginal highs of 1.97 (a year earlier it stood at 1.06), signaling extreme greed in the markets.
3. The Buffet Indicator, which divides the total market cap with the US GDP, stands at extremely overvalued levels of 150%. During the dot-com bubble, the indicator had a value of 130%, and just before the 2007-2009 Great Recession, a value of around 108%.
4. The Q Ratio, measuring the market value of equities vs their net worth, is at all-time highs. The last time it reached record levels was just before the dot-com bubble and just before the 2008 economic downturn. Sounds familiar?
5. We're currently in the longest bull-run ever in history. The previous longest bull-run lasted 120 months (10 years), from 1991 to 2001.
6. And finally, looking at a typical bubble chart, the March uptrend resembles much that of "bull trap" and "return to normal" phase.
Please hit the "LIKE" button to support our free work. Thanks!
Here's a quick overview of the main reasons why the S&P500 could enter a one-way street in the coming months.
Any comments are appreciated. Thanks.
1. The index is less than 5% away from record highs, yet US unemployment rates are sky-rocketing, the country has officially entered a recession, and other regions will likely follow.
Global growth forecasts have been lowered to -5% (the lowest since WW2) and corona-fears haven't dissipated yet. Company profit margins have been badly hit and many will have to close doors.
So what is the S&P500 doing there at above 3,000?
2. The put-call ratio reached marginal highs of 1.97 (a year earlier it stood at 1.06), signaling extreme greed in the markets.
3. The Buffet Indicator, which divides the total market cap with the US GDP, stands at extremely overvalued levels of 150%. During the dot-com bubble, the indicator had a value of 130%, and just before the 2007-2009 Great Recession, a value of around 108%.
4. The Q Ratio, measuring the market value of equities vs their net worth, is at all-time highs. The last time it reached record levels was just before the dot-com bubble and just before the 2008 economic downturn. Sounds familiar?
5. We're currently in the longest bull-run ever in history. The previous longest bull-run lasted 120 months (10 years), from 1991 to 2001.
6. And finally, looking at a typical bubble chart, the March uptrend resembles much that of "bull trap" and "return to normal" phase.
Please hit the "LIKE" button to support our free work. Thanks!
Note
6% fall the following day, keeping my bearish bias
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