I hate it when financial analysts all try to throw out ridiculous headlines in order to get clicks or face time on television. So if my headline to this piece sounds dramatic, I apologize.
But with what I’m looking at, I truly think the beginning of the end could be staring us in the face.
Let me explain exactly what I’m talking about…
I often hear the average Joe talk about the stock market as some complicated thing that’s overly fickle and impulsive.
While he may not be wrong about the fickle part, I think calling it complex might be a stretch when you know what to look for and when to look for it.
Yes, you can absolutely over analyze the market or individual securities until you’re blue in the face. You can study so numbers that you make it complex. That’s why 70% of investment professionals can’t even beat the market.
But it doesn’t have to be complicated.
For example, last week I decided to take a step back and just look at the stock market as a whole. Let me show you a quick chart of what I found while I was doing so, courtesy of stockcharts.com:
Before I get to what that chart is saying, let me first talk about how listening to all the “noise” in the mainstream media can be detrimental…
In August, that huge fall was greeted by those who either called it “the end of the world” or those who called it “a healthy pullback”. We love extremes, don’t we?
Then the market came back alive after several weeks and climbed back up to trading levels previous to the fall.
But it wasn’t able to reach a new high, was it?
And that brings me to the above chart of the overall market, using the S&P 500 (SPX) as an index for it.
Put simply, that looks like an unhealthy market to me.
Look back at the middle of the chart, in September and October of 2014. There was another big dip, yet that produced a brand new market high immediately afterward.
The current market has been unable to do so, and when I apply some common sense by just looking at the market with my own two eyes, I see what could very well be the beginning of the end for this bull market…
