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It's Official: Stocks Are in a Bubble
The markets are rallying because today is Tuesday. Stocks have rallied every Tuesday for the last 17 weeks and traders are now conditioned to play for this move. It’s also a POMO day (meaning the Fed is pumping the markets), which adds fuel to the fire for a stock rally.
The market is beyond overstretched. We have not had a 5% correction in six months. Stocks have gone almost straight up for 89 days (we haven’t had a 3+day correction in that long). This is an all time record. The last time stocks rallied without a 3+ day correction was in the buildup to the Crash of 1987.
Check out the chart of Stocks vs. Copper.

Copper is great at predicting economic growth. Stocks are not. And the major divergences between the two tend to be resolved sharply (notice the sharp correction in Copper in late 2011).
With that in mind, either Copper needs to ERUPT higher as the world economy comes roaring back… or stocks need to drop BIG TIME.
Guess which one it will be? Do you think this might have something to do with why Bernanke is worried about potential for “sharp moves” in the markets?
For more market insights and commentary visit us at www.gainspainscapital.com
Best Regards,
Graham Summers
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remember, in 1987 there was also no QE, so copper norms aren't telling you anything you can rely on
Couldn't help but notice that copper was actually increasing while SPY was decreasing during the last crash in 2008-2009 and when the crash occurred, copper fell in a perfectly correlated manner (no advance "warning"). People read into a time series any bias they want and see any pattern they want. Bottom line-you can't predict the future so stop trying. The author has been wrong on this for the last three years.
Has anyone actually looked at the Bank Of America financials? When I calculated their PE ratio, I came up with 61 and I used THEIR earning/price numbers and I think that's a conservative estimate- even though LEAP options predict it will trade between $12-15 for a while.
Somehow, their "adjusted" P/E ratio comes out to 31%? Yet they never say exactly what they adjusted.
What would their asset ratios would look like without the Treasuries and the foreclosures they used the government to steal from the buyside.
That actually sounds like a fun project.
They're probably thinking that *lost in translation* Chinese analysts deciphering Treasury purchases would get frusterated or lazy (as commies are) in auditing the numbers for accurate forcasting purposes.
Marco Polo - all abord the Junk Ship with Junk bonds.
Dr. Copper says equities need an enema.
75% of market's volume is from prop desks, not organic volume of individual traders.
Gees, I wonder if the PR driven MSM shillsters figured out the obvious? Obviously not.
That was a pretty useless article.
I think we'd all have been better served if you just said: After the early 90's crash, the hot money went into DOT Coms. After the DOT Com crash, the hot money went into housing. After the housing crash the HOT MONEY WENT INTO THE STOCK MARKETS!
mo pomo mo!!! momo
All a prelude to N W O currency regime...Crash first, then roll it out...
"stocks are in a bubble" - No shit Sherlock.
Wow, where do I subscribe to this spectacular service ?
Well, now it's "official"
'Stocks are in a bubble' how much more insightful do you want Phoenix to get?
That's got to be worth a subscription right?
Bueller, Bueller, Bueller?
[SPRINGTIME FOR HITLER AND BERNANKE]
the fed [AND POTUS] has a policy of creating stability in markets by overselling the recovery through asset overvaluation [bubbles.] this works through [hamburger] tuesday logic, or btfd. the Fed has already eaten this hamburger, through forward selling of GDP earnings to get them through the election [them?] and now its tuesday, they have to pay for the hamburger through POMO.
there are of course a lot of people who think they own those GDP earnings, [these guys have sold more shares of the recovery than those two guys who sold shares in that play, Springtime For Hitler] so the market is getting a little crowded. of course everyone goes to jail if THE RECOVERY IS FOR REAL. it has to flop, so the Fed is writing its own BAD reviews of the market [QE to end]
if you've got a ticket, laugh it up. if you own a piece of it, you can't win, either way, its oversold.
What happens when the Permanent Open Market Operations are no longer permanent?
They'll be impermanent: POP! goes the weasle
The perps fly to their private islands.
I'm worried about Bernanke escaping the mob.
he has options. hold the thing together with glue and paper clips and leave when his term expires. he could have a Ken Lay heart attack, with only the immediate family and the personal physician at hand, and retire to a Caribbean island. he could even do the right thing, and raise interest rates to a place where they would be if the economy was in the state of recovery they claim it is. now, the mob has options too. and should their representatives in the peoples house decide to take action they could put the Fed balance sheet off budget, [orphan their assets, and curtail their ability to do asset swaps - permanently] and that might satisfy both parties. it will never get to the point where the mob gets the final say, if thats what you were implying
There won't be any "mob" just as there have been no mobs going after any of the other proven to be consistently clueless FedHeads. And if by some chance there were to be one, their target would be fully protected by the system and the governments the Fed effectively owns.
According to David Tepper, the world economy comes roaring back... "Amazing"!
Whose David Tepper? Did NBC find him under a rock? In a shoe?