Stocks eked out a new record high earlier this week on:
1) Extremely light volume courtesy of the holidays
2) The usual bogus economic data that overstates growth in the US
3) The usual end of the month/ end of the quarter performance gaming
We remain in a megaphone pattern. By the look of things, we’ve just failed to break about the upper trendline. We’ll now begin working our way lower.
If one were looking for more evidence that stocks are in a bubble, BlackRock released research suggesting that corporate earnings would be 86% lower if it weren’t for absurd accounting practices/ make believe.
In this scenario, stocks are sporting a real P/E of over 30. So much for all of the talk of stocks being cheap or undervalued. If you want to look at REAL earnings, or the REAL state of the economy, this bubble might actually be even more overvalued than the Tech Bubble.
It’s not hard to believe. If you consider that each successive economic recovery since the Tech Bubble has been weaker and weaker, there is no question that the market move post-2009 has been truly absurd.
The stage is set for another Crash.
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Best Regards
Phoenix Capital Research