Stock Market Summer Correction

Stock-Markets / Stock Market 2021 Jul 09, 2021 - 11:47 AM GMT

I'll take a more in-depth look at the stock market trend in a forthcoming analysis. However as things stand the stock market is starting to move out of my original forecast window for a summer correction (9th Feb 2021 Dow Stock Market Trend Forecast 2021).

(Charts courtesy of stockcharts.com)

The trend to date has been pretty mild, too mild for my liking that and various things bubbling under the surface such as the repo market that I will explain shortly, all of which culminated in spooking me into reducing the size of my exposure to AI stocks by 1/3rd, the last time the markets spooked me into selling was in December 2016 on the eve of Trump taking office, as I rightly assumed that he would literally go to war with the established order and China.

However, what I did not bank on was how inept and incompetent he would turn out to be, basically he is a con man out for himself who had the good fortune to be up against someone even less worthy of the presidency then himself, Hillary Clinton as though she had a god given right to succeed her husband to the iron throne. Anyway that is all in the past and my fears of Trump starting an nuclear war with China soon evaporated when he showed that all he was interested in were TV ratings, and so bull market blue sky's ahead ensued as along as a black swan did not derail the markets such as an inept Chinese bio lab leaking an engineered version of a BAT virus, which even if such an unexpected event occurred the ensuring market panic should result in the mother of all tech stock buying opportunities!

What's spooking me right now is similar to what spooked me going into the financial crisis, a good year before Lehman's went bust. Detachment from reality i.e. housing and stocks going up whilst liquidity was being sucked out oft he financial system, of course at the time I did not understand the true nature of the derivatives bets placed upon bets placed upon bets placed upon even more bets all magnifying negative housing market exposure manifold, but I understood that the banks were in trouble and that house prices were going to fall which they did.

And I watched as the mass of the establishment including the mainstream media peddled relentless economic propaganda that the UK housing market was only going to experience a soft landing, when instead it was obvious to me as early as August 2007 that the UK housing market was going to CRASH! The only question mark at that time was the magnitude of the then imminent crash.

So what's spooking me now and will it turn into a December 2016 false signal or be more like going into Mid 2007 when my radar was going berserk and I started pumping out articles warning of doom and gloom all in the face of a deaf, dumb and blind mainstream press, I even alluded to the fact that banks could go bust though at that time could not mention any particular bank due to the risk of being sued for libel as before the Financial crisis one could NOT refer to any bank as being engaged in criminal activity, being party to a banking crime syndicate without being on the receiving end of legal correspondence threatening court action if x,y,z was not done with immediate effect.

Which brings us to one of the primary flashing red lights prompting me to start to de-risk a few weeks ago.

Financial Crisis 2.0 - You Don't Know How Big of a Bubble Your in until AFTER it BURSTS

A handful of stocks are driving the indices higher, Apple worth $2.3 trillion, Microsoft $2 trillion, Amazon $1.8 trillion, Google 1.8 trillion, Facebook $1 trillion even that over priced pile of poop Tesla came close to being valued at $1 trillion, we are definitely in a bubble, you only need to go onto youtube and watch the to the moon videos of Cathy Wood, literally everything's going to go to the moon because her barely out of puberty Quants decree it to be so. This is clearly a major warning sign of a unsustainable trend when indices are ruled by such a small clique of tech stocks where the greatest similarity is with the dot come bubble in terms of the valuation of stocks that actually produce revenues unlike the largely worthless dot com's of that time.

This analysis is an excerpt from my most recent extensive analysis evaluating the prospects for a Financial Crisis 2.0 - Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! the whole of which has first been made available to Patrons who support my work.

You Don't Know How Big of a Bubble Your in until AFTER it BURSTS
Stock Market Summer Correction
REPO Market Brewing Financial Crisis Black Swan Danger
Margin Debt Bubble
US Bond Market Long-term Trend
Michael "Big Short" Burry CRASH and HYPERINFLATION WARNING!
Michael Burry's Track Record
Michael Burry's Portfolio
Investing During Uncertainty
AI Stocks Portfolio Buying July Levels Update
HEDGING AI Stocks Portfolio
Crypto Bear Market Accumulation State
Bitcoin Bull / Bear Indicator
Market Oracle AI Coin Thoughts
Biotech Brief

So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

Including access to my recent comprehensive analysis of Bitcoin -

Bitcoin Bear Market Trend Forecast 2021 and Model Crypto Portfolio Buying Levels

Investing in the Tulip Crypto Mania
Bitcoin Price Trend Forecast Review
Lessons Learned
Cathy Crypto Wood's View on Bitcoin
BITCOIN HALVINGS TREND TRAJECTORY
Stock to Flow Infinity and Beyond!
Bitcoin, Crypto's and the Inflation Mega-trend
Black Swan 1 - Will Crypto's Get Banned?
Black Swan 2 - GOOGLE
Black Swan 3 - USDT Tether Un-Stable Coin Ponzi Schemes!
BLACK SWAN 4 - Bitcoin 51% Network Attack by China?
Black Swan 5 - Bitcoin is Already Obsolete
US Trending Towards Hyperinflation
BITCOIN TREND ANALYSIS
Bitcoin Bear markets analysis - How low could she blow?
Bitcoin Trend Forecast
Bitcoin Long-term probable Next bull market price target
Alternative Scenarios
My Crypto Bear Market Investing Strategy
Crypto 1 - Ethereum (ETH) $2600
Crypto 2 - Bitcoin $40,375
Crypto 3 - Ravencoin $0.078
Crypto 4 - Cardano $1.59
Crypto 5 - Pokadot $25
Crypto 6 - ChainLink $26
Crypto's 7 to 10
Creating The Perfect Crypto
How to Invest in Crypto Without Getting SCAMMED
CHIA SCAM COIN
Binance vs Coinbase
Have ARK Invest Funds Bottomed?

Of which this video gives a taste of -

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My analysis schedule includes:

More X10 Biotech Tech Stocks - 70% done
Stock Market Trend Analysis
UK House Prices Trend Analysis - 10% done
How to Get Rich! - 70% done
US Dollar and British Pound analysis
Gold and SIlver Price Analysis

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Nadeem Walayat

http://www.marketoracle.co.uk

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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