There is valid reason to panic. We just left a major stock market top behind. This may not just be a double dip. It is possible that March lows will not hold. The bear market rally of 2009 was expected after over sold conditions. But now we are back into bubble territory. Debt is the problem and we have more of it now. Nothing has been fixed. We have borrowed the stimulus and we have spent it. Now we are going to face a mountain of debt. Merely borrowing and spending money cannot make an economic recovery.
Back in March 2009, in the middle of bad news, bullish sentiment was only 3%. Virtually everyone was convinced that the stocks were going lower. But we found a bottom and rallied. Fast forward to one year later, by the end of April 2010 92% of traders were bullish. That is a 180 degree turn for the market sentiment. But that is what makes a market top! Everyone, including the mainstream media was convinced that stocks would go ever higher. People bet on the long side and started to wait to sell at higher prices to the the greater fool. But the last rally of the leg was visibly weak and the technical indicators were ringing the bells that we were approaching a stock market top:
There is nowhere to hide now. Do not end up holding the stocks to the bottom. Stocks can crash faster than you can imagine and they can go lower than you think!
The problems are too big to solve. This is a deflationary crash. US dollar rally is real. It is going up like a rocket and it should last few years. Most of the world's debt is denominated in US dollars. Borrowers must find US dollars to pay. They will sell everything, stocks, bonds, houses, gold, oil... If they don't, their creditors will! Keep your dollars safe! Do not get into excessive debt. It will be worth it. At the bottom of the deflationary collapse, your dollars will buy more of everything.
There is valid reason to panic. We just left a major stock market top behind. This may not just be a double dip. It is possible that March lows will not hold. The bear market rally of 2009 was expected after over sold conditions. But now we are back into bubble territory. Debt is the problem and we have more of it now. Nothing has been fixed. We have borrowed the stimulus and we have spent it. Now we are going to face a mountain of debt. Merely borrowing and spending money cannot make an economic recovery.
Back in March 2009, in the middle of bad news, bullish sentiment was only 3%. Virtually everyone was convinced that the stocks were going lower. But we found a bottom and rallied. Fast forward to one year later, by the end of April 2010 92% of traders were bullish. That is a 180 degree turn for the market sentiment. But that is what makes a market top! Everyone, including the mainstream media was convinced that stocks would go ever higher. People bet on the long side and started to wait to sell at higher prices to the the greater fool. But the last rally of the leg was visibly weak and the technical indicators were ringing the bells that we were approaching a stock market top:
http://www.tradingstocks.net/html/latest_opinion.html
There is nowhere to hide now. Do not end up holding the stocks to the bottom. Stocks can crash faster than you can imagine and they can go lower than you think!
The problems are too big to solve. This is a deflationary crash. US dollar rally is real. It is going up like a rocket and it should last few years. Most of the world's debt is denominated in US dollars. Borrowers must find US dollars to pay. They will sell everything, stocks, bonds, houses, gold, oil... If they don't, their creditors will! Keep your dollars safe! Do not get into excessive debt. It will be worth it. At the bottom of the deflationary collapse, your dollars will buy more of everything.