Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19
Gold Price Gann Angle Update - 10th July 19
Crude Oil Prices and the 2019 Hurricane Season - 10th July 19
Can Gold Recover from Friday’s Strong Payrolls Hit? - 10th July 19
Netflix’s Worst Nightmare Has Come True - 10th July 19
LIMITLESS - Improving Cognitive Function and Fighting Brain Ageing Right Now! - 10th July 19
US Dollar Strength Will Drive Markets Higher - 10th July 19
Government-Pumped Student Loan Bubble Sets Up Next Financial Crisis - 10th July 19
Stock Market SPX 3000 Dream is Pushed Away: Pullback of 5-10% is Coming - 10th July 19
July 2019 GBPUSD Market Update and Outlook - 10th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

One of the Longest Cyclical US Stocks Bull Market May be Coming to an End

Stock-Markets / Stock Markets 2015 Aug 17, 2015 - 09:31 AM GMT

By: Jas_Jain

Stock-Markets

Sell when the market has had a long rise and is hesitating, with everybody in the frenzy of optimism. Don't be fooled by cats and dogs leaping up after the good stocks have hesitated. ~ Bernard M Baruch, one of the most successful American speculators and among the most powerful political kingmakers in American history.


This is an update to my editorial of April 05,2015.

It is safe to say that the market, as represented by S&P 500, has been hesitating (see Fig. 1) and "the frenzy of optimism" seems to be receding, i.e., the best time to sell may already be in the past, but it is not too late to sell.

According to a biographer, W.L. White:

"Another Baruch practice which might be a rule is, when a market operation is finished, to liquidate completely, salt the profits down in cash and bonds ("where it wouldn't forget who owns it") and then often to take a train out of town, to "soar off like an eagle, circle high above men to look things over."

After several years of 20%+ annual rise without a serious correction, the hesitation over the past 6 months is a potential signal of a top formation to be followed by a bear market. I do agree with the bullish stock market commentators that under the current conditions we would not have a bear market unless the economy were to follow with a recession. And they imply that since no one is forecasting a recession we wouldn't have a bear market is stocks. The only problem with this logic is that there is an abysmal record of forecasting the future recessions, by economists as well as bullish stock market prognosticators, and generally the decline in the stock market is a better predictor of the coming recession. My prognosis is that a 20%+ decline in S&P 500 would be a good signal for the coming recession.

I also expect that the coming recession in the US, triggered by external events, such as China, or domestic problems, such as changes in the monetary policy, or lack there of, would be synchronous with a global recession. In that case, the bear market in stocks would be a very nasty decline, to top the declines during 2000-2003 and 2007-2009. The buy-and-hold philosophy and following of people like Warren Buffett would take a serious hit to their reputations. Most people get wiped out in the stock market only once or twice in a lifetime and the lesson is never learned. Stock market promoters are always successful in reviving general public's enthusiasm for stocks.

By Jas Jain

jas_jain@hotmail.com

The Prophet of Doom and Gloom

Copyright 2015, Jas Jain.  All rights reserved.
Disclaimer:  The above information is not intended as investment advice.  Market timers can and do make mistakes.  The above analysis is believed to be reliable, but we cannot be responsible for losses should they occur as a result of using this information.  This article is intended for educational purposes only. Past performance is never a guarantee of future performance.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules