I love analyzing the markets because it is a journey into understanding the human psyche. There is no better illustration of the fickle emotional rollercoaster than the recent market volatility. Over the summer the bulls reached a euphoric state of bliss in the belief that bull markets are perpetual and easy. But then something happened. The U.S. dollar began a significant rise that unraveled the commodity complex and drove a new bear market decline in almost every energy and basic material stock. This psychologically broke the euphoria and ultimately drove the panic selling of the 200 point S&P500 market correction in October.
Back on September 11th, we published a blog discussing the 5 Critical Things to Consider. Now, just a week later, there continue to be new red flags waving the warning signs.
We are changing the way we portray our stance on the markets. The term “Crash Alert” was meant only to observe when market conditions have deteriorated making the market vulnerable. It is not about us using a crystal ball predicting a horrible event, but rather us recognizing that over the last 15 years the market had very ugly declines under similar conditions.