THE US STOCK MARKET is still expensive. The valuations today exceed those of all except the most exuberant conditions in the last quarter century. While we’ve seen what appear to be corrections in specific stocks or specific market sectors, money is generally not leaving the market yet. In a more professional parlance, the market is undergoing “rotation.” Money comes out of tech and goes into blue chips, or it flows out of blue chips, and into small caps. In less professional parlance, the money is “barhopping.” Despite the improved labor picture from Friday– which lessens the chances of more than one or two small rate cuts this year— the market pundits provide new narratives to justify paying the higher multiples for stocks. “Productivity is

You know you live in a blessed financial environment when no one believes in Santa Claus, yet everybody expects a Santa Claus rally and usually gets it. I’m watching this Bubble with a little more patience than I watched the two most recent ones: Dotcom bubble of 2000 and the Real Estate bubble of 2009. Most significant market tops result in a double top. It simply means the market will probably try to put in a new high level. If it fails, it’s over. And by the “market” in this case, I’m going to say the NASDAQ 100 because the text stocks will be the first to go when investors decide they don’t wanna take any more risk. Two developments that tell me the bubble

We are still under the spell of the liquidity events surrounding the pandemic. Between Federal Government spending and the Federal Reserve actions (two different kinds of stimulus: one monetary, one fiscal),  investors got used to markets that bounce up and beat the drum like the Energizer Bunny. I maintain that there were three confluent bubbles in place: the Trump trade, the Fed trade, and the AI trade. Right now, the Fed Trade and the AI trade appear to dominate the narrative as markets  reflect “squeezy” conditions where hedge funds have been too quick to bet on the downside and  with continued upside action are forced to buy back in. I read a headline a few weeks ago  implying that individual investors are driving the push

THERE ARE MILLIONS who can’t understand why the stock and bond markets swooned and remain down for the year. After all, they keep hearing that everything is good and that the country’s imminent return to greatness is assured. I would only have a few words for members 0f such a group: The markets do not lie.  The stock and bond markets–usually through indexes comprised of the larger public companies in the US–are handy in that they give us current values of the  vehicles that people around the world use for savings and investment. More accurately, though, these financial assets (i.e. stocks and bonds) are actually forecasts of  economic conditions for corporate earnings in the near future–usually one or two years out. So the current market

[Note: This material is for educational and entertainment purposes only. It does not recommend investments of any kind. Use a professional and licensed advisor or broker when making investment decisions]   In the last few days, I have read articles on marketwatch.com, a Wall Street Journal site, that have done well to explain why stocks are where they are. We are into uncharted territory again–well it can’t be “again” and “uncharted territory” at the same time, but it’s new so perhaps “everything old is new again.”In order to make sense of the current market environment, I have to reflect back on the environment of the Tech Bubble in 2000. I was working a trade desk and right in the middle of the mania—the insanity of

[Note:  This content is for educational and entertainment purposes only. Investment decisions should be made with the help of a professional.] In my most recent “Markets” post (https://www.moviesmarketsandmore.com/the-boy-who-called-wolf-was-right-just-when-everyone-stopped-listening), I offered two different charts and trendlines as  key support levels. The second level (5-yr chart) held, and the resultant bounce from the 4100 level sparked the market’s greatest November rise in decades, driving indexes near to the old highs of a year ago (see 6-month chart below). There are at least three reasons for the “upward crash”: Many sophisticated market players had bet on the market to go down and sold short (“buy low, sell high” but first borrow stock then sell it. They then buy later—-and preferably lower–to return the borrowed shares and pocket the

[Authors Note–Please Read: This piece is for education and entertainment only. ] I am not the boy who cried “Wolf!” –Besides, one wolf does not a disaster make. Actually, I like wolves; they are beautiful, intelligent and have complex social structures. They work together hunting and caring for the pups. Many of the First Peoples’ cosmologies depict the wolf as an important fellow traveler  who has suffered a fate not unlike their own: misunderstood, removed, contained, and demonized (as exhibited by the folktale in the case of the wolf). [By the way, I am reviewing a series about the Navajo  called “Dark Winds” in the Movies section of this blog.] In this early phase of AI, this age of robo-advisors, and investment professionals who only

[NOTE: This material does not represent investment advice in any way. It is for educational purposes only. Investing is personal. See your investment guru before making decisions.]   ABOUT 40 YEARS AGO, while spending time in France after college, I hitchhiked south to Madrid to visit my Aunt and cousins.  While I did experience the Prado and the Guernica there, I also attended a bullfight at the Plaza del Toros.  I bring this up because a bullfight, while arguably brutal,  is a pageant and there is a process about it. A matador does not enter the ring prepared to face a fresh fighting bull. The bull is systematically weakened by picadors on horseback who spear the animal’s neck and shoulder muscles to reduce its ability

  [Note: This material is for entertainment and educational purposes only. Discuss your specific risk-tolerances, needs and strategies with an investment professional] ANY STOCK MARKET–even the over-supported and resilient US stock market–will sooner or later see to it that every successful trading or investment strategy fails miserably.  Right now, there’s a good chance that “buying the dips” and other bullish strategies will fall from fashion in the coming months.  This may also include investments in intangible or digital properties or currencies or meme stocks that became a source of easy wealth for millions of investors–most of whom aren’t aware that markets can go down or that value is not derived from a message board or chat thread. A former colleague of mine, Peter H. (R.I.P

[Note: this material is for educational and entertainment purposes only]   STOCK MARKET MANIAS are like champions in their fields: they do not go down without a fight. In August of 2020, I posted how the current  extended mania or “super bubble” represents decades of Federal Reserve Bank policies that led to a stock market seemingly incapable of falling for any stretch of time (https://www.moviesmarketsandmore.com/a-mania-to-rule-them-all/). The explanations for its longevity range from conspiracy theories to mass psychology to economic science: It is a self-fulfilling prophecy and a vicious cycle; no one sells because they are continually rewarded for buying and holding shares It is “propped up” by $1.4 trillion in QE per year (12 times $120 billion/month) and ZIRP or “zero-interest rate policy” at the