Three Reasons This Stock Market Rally Is False
There's a new Martenson Report ready for enrolled members.
In this one I separate and comb through the various sources of economic data, look at stock market volume, and engage in some original research to explore the issue of corporate earnings quality to make my case for where the stock market might be headed.
The recent stock market advance is lacking a solid fundamental story to base itself on, at least if we choose to rely on good data. Further, volume is down considerably, the most in decades, and this is another missing component that might make us view the stock market advance more favorably. Finally, earnings suggest that the stock market, even after its run, is not cheap, by any historical measure.
There is growing evidence that the price movements we see in the stock market are best explained by activities that are essentially hidden from public view. High Frequency Trading (HFT) is one example, and it's not a grand stretch to suspect other forms as well.
Remember, one of the most famous traders of all time said, "The stock market can remain irrational longer than you can remain solvent," which I am tempted, for anyone considering shorting the market, to paraphrase as, "The stock market can remain manipulated longer than you can remain sane."