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Are we On the Verge of a Market Explosion to the Upside? by Martin Armstrong
Are we On the Verge of a Market Explosion to the Upside?
Tomorrow we end the first quarter of 2017. Politics on a global scale are the driving force. The failure of Trump and reform movements in Europe are the catalyst to send the stock market to record highs once again as people lose confidence in government completely and we then turn to just look how to park money.
We cross that line moving beyond the point of no return where money pours into equities, not because of earnings, but because capital is fleeing from government and banks and it just needs a place to park. As we move forward, we will look at good stocks to park money to survive the political chaos on the horizon.
The historical high in the PE Ratio was in 2009 at the bottom of the crash – NOT THE HIGH! When you reach a point that you no longer trust banks, the currency, or government, where does big money go? Individuals can buy gold, but you cannot keep it in a safe deposit box in a bank if the banks can be seized.
Big money parks in blue chips and tangible assets like real estate (if out of the path of war). The 2009 peak in the PE Ratio reflects that moment of a complete collapse in confidence. This is the key point we must understand. So, while I am focusing on politics, that is the fuel to ignite the collapse in public confidence. Nobody can stop this – not Trump, not Le Pen, or any other reactionary politician. We have crossed the point of no return because nobody is talking about restructuring the entire monetary system and debt system. That will not take place UNTIL we crash and burn. Nobody changes anything until they have to.
Obama-change-we-can-believe-inWe can technically see that the Dow has broken-out on the Quarterly level. Support lies at the 19,230 level. The only way to make a serious correction requires the Dow to break the 17,000 area on a closing basis. Closing the quarter above 19,230 keeps the market positive from a broader perspective.
Keep in mind that Trump WILL FAIL! This much is inevitable. The trend is against him and you cannot fight the trend. People had such high hopes for Obama that he would live up to his promises and we would really see “Change We Can Believe In.” When everything he did was the same as Bush, that destroyed the confidence in the two-party system and set the stage for Trump as our computer was forecasting. He became effectively a third-party candidate with the Republican Party.
Now, when he fails to reverse the global trend, where will people turn? Once you raise the hopes for change and Trump cannot deliver, all bets are off moving forward. That is when the stock market starts to rise for reasons that will confuse most. This is not the “Trump Rally” but the collapse in public confidence rally
To continue reading please click link https://www.armstrongeconomics.com/markets-by-sector/stock-indicies/dow-jones/are-we-on-the-verge-of-a-market-explosion-to-the-upside/