The S&P 500 is More Overstretched Than At Anytime in 30 Years

The markets are running out of steam as there is no longer a Bernanke talk to look forward to (he won’t be at the Fed’s Jackson Hole meeting in August) and options expiration is ending.

Bernanke has a thing for options. For some reason, over the last five years, he had a tendency to expand the Fed’s balance sheet on weeks when options were expiring. He even did this on weeks when the Fed technically was not engaged in a QE program.

In simple terms, whenever it’s time for options to expire, a time when Wall Street wants to manipulate the markets so it can shred options traders, Bernanke will juice the markets EVEN if there is no formal Fed program in place.

So it’s a little hard to stomach that Bernanke just happened to say that QE would continue for some time the week before options expiration week… especially given that the Fed is so divided on QE with half of Fed members wanting QE completely stopped by the end of 2013.

Bottomline: the Chairman went rogue and did it at the precise time when stocks were in need of a major boost. This is not coincidence. And now that this is over we have to wonder what’s next.

Well among other things we see that IBM, Intel, eBay, Google, Microsoft, Blackberry have all missed revenue estimates. US GDP is turning sharply south again with the second quarter currently posting 1.2% growth.

Stocks are diverging from everything under the sun: earnings, US GDP, the Nikkei, the list goes on and on.

And we are clearly in a bubble. Arguably the biggest stock bubble for the S&P 500 in the last 30 years. Below is a weekly chart of the S&P 500 relative to its 200-week moving average.

Stocks may hit new highs, but this rally has all the hallmarks of a blow off top, coming at the final stage of a bubble. Indeed, stocks have not been this overextended in over 20 years… that includes the 2007 peak. Soon after we reached that point… we then plunged into one of the worst market Crashes of all time.

By today’s metrics, this would mean the S&P 500 falling to 1,300 then eventually plummeting to new lows.

This is not doom and gloom. This is a fact. The Fed has created an even bigger bubble than the 2007 one.

The time to prepare for this is not once the collapse begins, but NOW, while stocks are still rallying. Stocks take their time moving up, but when they crash it happens VERY quickly.

With that in mind, I’ve already urged my Private Wealth Advisory clients to start prepping. We’ve opened six targeted trades to profit from the stock bubble bursting.

We’ve also taken care to prepare our finances and our loved ones for what’s coming, by following simple easy to follow steps concerning our savings, portfolios, and personal security via my Protect Your Family, Protect Your Savings & Protect Your Portfolio reports.

I’ve helped thousands of investors manage their risk and profit from market collapses. During the EU Crisis we locked in 72 straight winning trades and not one loser, including gains of 18%, 28% and more.

In fact, we’re currently on another winning streak having locked in nine winning trades in the last two months, including gains of 21% and 25%.

All for the small price of $299: the annual cost of a Private Wealth Advisory subscription.

To take action to prepare for what’s coming… and start taking steps to insure that when this bubble bursts you don’t lose your shirt.

Click Here Now!

Yours in Profits,

Graham Summers

 

 

 

 

 

 

Disclaimer: The information contained on this website is for marketing purposes only. Nothing contained in this website is intended to be, nor shall it be construed as, investment advice by Phoenix Capital Research or any of its affiliates, nor is it to be relied upon in making any investment or other decision. Neither the information nor any opinion expressed on this website constitutes and offer to buy or sell any security or instrument or participate in any particular trading strategy. The information in the newsletter is not a complete description of the securities, markets or developments discussed. Information and opinions regarding individual securities do not mean that a security is recommended or suitable for a particular investor. Prior to making any investment decision, you are advised to consult with your broker, investment advisor or other appropriate tax or financial professional to determine the suitability of any investment. 

Opinions and estimates expressed on this website constitute Phoenix Capital Research's judgment as of the date appearing on the opinion or estimate and are subject to change without notice. This information may not reflect events occurring after the date or time of publication. Phoenix Capital Research is not obligated to continue to offer information or opinions regarding any security, instrument or service. 

Information has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. Phoenix Capital Research and its officers, directors, employees, agents and/or affiliates may have executed, or may in the future execute, transactions in any of the securities or derivatives of any securities discussed on this email. 

Past performance is not necessarily a guide to future performance and is no guarantee of future results. Securities products are not FDIC insured, are not guaranteed by any bank and involve investment risk, including possible loss of entire value. Phoenix Capital Research, OmniSans Publishing LLC and Graham Summers shall not be responsible or have any liability for investment decisions based upon, or the results obtained from, the information provided. 

Phoenix Capital Research is not responsible for the content of other websites or emails to which this one may be linked and reserves the right to remove such links. OmniSans Publishing LLC and the Phoenix Capital Research Logo are registered trademarks of Phoenix Capital Research. Phoenix Capital Management, Inc.
What Happens When the Everything Bubble Bursts?
  • By trying to corner the bond market (risk-free rate)
  • the Fed has created a bubble in everything
  • We call this THE EVERYTHING BUBBLE
  • Reserve your copy of our Executive Summary
  • To prepare for what's coming down the pike!
Your contact information will never be rented or sold to anyone EVER.