When the S&Ps took a bold leap on December 26 after plummeting 500 points earlier in the month, few could have imagined what would happen next. It were as though, missing an arm and a leg, a soldier had vaulted from a trench in the heat of the Battle of the Somme and shouted “Vive la France!” In the movie, the soldier is dead before he stumbles and hits the ground. But on Wall Street, U.S. stocks were just beginning their most powerful rally ever. The S&P 500 Index has risen 600 points and is closing fast on the record 2941 recorded in September.
The wilding spree has been replicated in stock exchanges around the world even though global growth is slowing. This shows the irresistible power of central bank stimulus, but also the irrationality of the result. Something’s got to give, and it seems unlikely that the necessary adjustment will come via a huge surge in corporate earnings. Even so, easy credit, aggressive share buybacks and force of habit will continue to fuel stocks until the money runs out. Since no one can say any longer what, exactly, counts as money, it is impossible to estimate when this will occur. The charts are also silent on the question of how high. But gut instinct says we are close to an important top, even if ten years from now it turns out not to have been THE Top.
Click here for a free two-week trial subscriptionthat will give you access to all paid features and services ofRick’s Picks, including daily, actionable trading recommendations and a ringside seat in a 24/7 chat room that draws veteran traders from around the world.
The content on this site is protected
by U.S. and international copyright laws and is the property of GoldSeek.com
and/or the providers of the content under license. By "content" we mean any
information, mode of expression, or other materials and services found on GoldSeek.com.
This includes editorials, news, our writings, graphics, and any and all other
features found on the site. Please contact
us for any further information.
Live GoldSeek Visitor Map | Disclaimer
The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy
or completeness of the information (including news, editorials, prices, statistics,
analyses and the like) provided through its service. Any copying, reproduction
and/or redistribution of any of the documents, data, content or materials contained
on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC,
is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be
liable to any person for any decision made or action taken in reliance upon
the information provided herein.