An artificial rally – that’s what the current movement of the stock market has become.
Instead of focusing on profits, revenues, and other numbers that should truly matter, Wall Street appears to care about nothing other than the whispers coming from the Federal Reserve and its members.
So what are the facts telling us? Can this rally last forever, or is it doomed to fail? And how can YOU make money from it…?
If you’ve been around the stock market for more than a day or 2, you likely already know nothing is ever cut and dry on Wall Street.
You can have everything lined up perfectly, you can have all your ducks in a row, and you can have the stats to back it all up, but that doesn’t mean everything is going to go exactly according to plan.
And the main reason that what should be happening right now isn’t is propping up of the stock market by Janet Yellen and the Fed.
But the sirens continue to blare, the market continues to get more and more stretched, and the facts keep piling up to the point where the idea of a failed market recovery seem inevitable.
Look at these warning signs:
1. The P/E Ratio
Depending on exactly how you adjust the price per earnings ratio, you can get varied results. But in the majority of cases, any P/E ration is about 50% higher than the historical average!
How’s that for overvalued?
2. The 2nd-longest Rally Ever
The bull market that was raging on for the past 7 years is only surpassed by one other bull market in history. The market is cyclical, and that means a climb is followed by a fall. And a rally this long should be giving way to a harsh bear market.
3. Smart Money Talks
Here at Wall Street Informer we recently covered the “smart money,” or Treasury Bond investors. Those investors have been gradually indicating a downturn for some time now, and that should mean that the stock market isn’t far behind.
4. Downward Pointing Moving Averages
When using technical analysis, one of the most powerful weapons in our arsenal is the moving average. A moving average basically shows the average price of a security over the past X amount of days.
Well, the vast majority of important moving averages, such as the 200-day through the 400-day moving averages, are either flat or pointing downward. That’s something that simply doesn’t happen during a bull market.
So in my mind, Yellen and the Federal Reserve can try to pump the market full of steroids all she wants. In the end, she’s only going to make the fall that much more painful.
And when the above warning signs lead to the inevitable, I’ll be there guiding you to big profits through inverse ETFs and some other secrets the whole way down.
