The stock market is at a critical moment! Goldman Sachs has suddenly decided to warn all of us that the stock market could decline by 10 percent or more in the coming months! But are they just honestly trying to warn their clients that the stocks have become overvalued at this time or is it just another agenda at work?! Whether it is an agenda or not, but the stock market has just entered a very dangerous zone. Stocks are massively overpriced and investors have been borrowing huge amounts of money to buy stocks. Consequently, the margin debt at the New York Stock Exchange is truly at a crazy level!
In fact, these kinds of behaviors and signs actually indicate that another bubble burst is on the way. On top of that, the state of overall U.S. economy is getting worse; the market is soaring to new highs though. It is not a good sign folks! The U.S economy is in a very bad condition than it was the last time we had a major crash back in 2008 and employment is much worse now than it was at the time and the U.S banking system is more ailing and in more debts than it was back then. It owed about 10 trillion dollars but today the debt has increased to more than 17.2 trillion dollars. The market keeps on fooling the masses by this illogical bubble though!
As a matter of fact, this illogical stock market bubble will not last for much longer and a lot of financial market experts are now advising and warning their clients to prepare for a substantial pull-back. You see the market was manipulated by the Fed in early August when a dramatic decline was due, as a lot of people had already been aware of that but in fact, this is just the bottom line! The energy of the current run has fully been drained and the Fed is not actually able to fight it any more.
Actually, it can be likened to a man who has been holding a big weight over his head for a little while but now his energy is getting depleted. As mentioned above, the market was manipulated by the Fed in early August and it has been tolerating the burden since then. They are not able to hold it up anymore.
This is actually what I see in the S&P500 based on the cycle work and harmonics. I am afraid, I cannot give out much information here as it could leak and be copied. Please click on the images to get a larger view.
Actually, the market will probably put in another high but the length of the rally will be relatively smaller, then a sharp decline to the 1350 area is possible, after that a rally back up to new highs(the 2100 area)! You see, it can be a huge opportunity to enter the market with a large short position when the time is right. Actually, as soon as the decline kicks off, there will not be a major pull-back to re-enter so you would want to make sure not to miss the ride at the very top.
May you profit handsomely,