"Over the waterfall highs" The market has falle
Post# of 63699
Posted On: 05/22/2016 4:41:16 PM
"Over the waterfall highs"
The market has fallen into a pattern since peaking exactly one year ago on May 20, 2015.
If this recent pattern holds, the next stock market waterfall may be right around the next bend.
Position in advance not only to protect your portfolio but also to capitalize .
The market has fallen into a pattern since peaking exactly one year ago on May 20, 2015. It grinds sideways in a gradually declining trend for a couple of months, then it heads quickly lower over a waterfall, it spends about a month working to get its footing, then it rallies its way back higher for a month or two. Over the past month, we have been grinding sideways in a gradually declining trend. If this recent pattern holds, the next stock market waterfall may be right around the next bend.
Stock Market Thrill Seeking
The U.S. stock market as measured by the S&P 500 Index has been in a defined downtrend over the past year. But the nature of the declines has certainly been anything but subdued. In fact, stock investors over the past year have already headed over the proverbial waterfall twice, only to fight to set a bottom and climb their way back higher. In the process, the market has set a series of lower highs and lower lows in the process.
The natural question that follows from these previous waterfall declines is the following. Are we likely to head over the stock market falls in a barrel once again in the coming months?
In working to answer this question, several points are notable.
First, the stock market certainly does not lack fundamental reasons to be trading meaningfully lower than where it is today. Annual corporate earnings have been in decline for six consecutive quarters and are projected to decline for a seventh time in a row in 2016 Q2. In short, we are already in a prolonged profit recession. Also, stocks are trading at historically high valuations at 24 times as reported earnings on the S&P 500 Index, a level that the market has traded at only a small handful of times in history. Needless to say, high prices with already declining earnings is a toxic combination when thinking about the potential for the next waterfall. Moreover, the global economy has been sluggish for some time and does not appear poised to enter into a renewed growth phase anytime soon to support a reversal in earnings. Instead, conditions appear to be deteriorating further in many ways across the world. Putting all of this together, it would be more than understandable if investors suddenly felt inclined to take a meaningful helping of risk off of the table from their investment portfolios.
Second, the market appears to have established a rhythm to its declines since peaking last May.
The market has fallen into a pattern since peaking exactly one year ago on May 20, 2015.
If this recent pattern holds, the next stock market waterfall may be right around the next bend.
Position in advance not only to protect your portfolio but also to capitalize .
The market has fallen into a pattern since peaking exactly one year ago on May 20, 2015. It grinds sideways in a gradually declining trend for a couple of months, then it heads quickly lower over a waterfall, it spends about a month working to get its footing, then it rallies its way back higher for a month or two. Over the past month, we have been grinding sideways in a gradually declining trend. If this recent pattern holds, the next stock market waterfall may be right around the next bend.
Stock Market Thrill Seeking
The U.S. stock market as measured by the S&P 500 Index has been in a defined downtrend over the past year. But the nature of the declines has certainly been anything but subdued. In fact, stock investors over the past year have already headed over the proverbial waterfall twice, only to fight to set a bottom and climb their way back higher. In the process, the market has set a series of lower highs and lower lows in the process.
The natural question that follows from these previous waterfall declines is the following. Are we likely to head over the stock market falls in a barrel once again in the coming months?
In working to answer this question, several points are notable.
First, the stock market certainly does not lack fundamental reasons to be trading meaningfully lower than where it is today. Annual corporate earnings have been in decline for six consecutive quarters and are projected to decline for a seventh time in a row in 2016 Q2. In short, we are already in a prolonged profit recession. Also, stocks are trading at historically high valuations at 24 times as reported earnings on the S&P 500 Index, a level that the market has traded at only a small handful of times in history. Needless to say, high prices with already declining earnings is a toxic combination when thinking about the potential for the next waterfall. Moreover, the global economy has been sluggish for some time and does not appear poised to enter into a renewed growth phase anytime soon to support a reversal in earnings. Instead, conditions appear to be deteriorating further in many ways across the world. Putting all of this together, it would be more than understandable if investors suddenly felt inclined to take a meaningful helping of risk off of the table from their investment portfolios.
Second, the market appears to have established a rhythm to its declines since peaking last May.
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