Top 10 Medium Term Market Indicators
1. According to the BLS 1 in 5 American households have no employment.
2. Consumption growth over the past 5 years not attributable to government transfers is zero.
3. Revenue growth over the past 5 years inflation adjusted is zero.
4. Earnings growth not attributable to financial engineering over the past 5 years is zero.
5. Debt levels have doubled over the past 5 years surpassing GDP.
6. Fed’s balance sheet over the past 5 years has increased by several thousand percent.
7. USD is ever closer to being dropped as world reserve currency.
8. Given 6 and 7 above, risk of significant devaluation is extremely high yet interest on lending to US is extremely low meaning no natural lenders.
9. We have all time low morale and trust in government due to an expansive criminal network within our legislative and executive gov branches.
10. Total Market Cap to GDP is reaching a level and duration of sustained increase that indicate a massive (50%) reversion.
The market has risen for 5 years on inflation i.e. monetary expansion, period. The story for hope was that monetary expansion would bring economic expansion but this story is about at the end of its usefulness. It simply hasn’t come to be. So then the question is, and this is serious, how long can monetary expansion uphold the rising market? That is the essential timing question. I think most traders in their heart of hearts believe a large reversion is unavoidable but the key to surviving as a trader is timing. So I repeat… how long can the one trick pony sustain these market levels and a positive slope. We see the YTD market slope nearing zero.