The broader stock market via the S&P 500 finally broke to new highs in August, while they drifted insignificantly lower on Wednesday.
And as Adam O’Dell recently commented, that typically means substantially higher highs ahead… like 13% plus.
What does this mean for my great crash forecast?
Well, my favored scenario right now, with the strong tax cuts Trump handed us, is that the great bubble peak comes in late 2019, not now.
There are also many indicators to support this, including my new 90-year “Great Reset and Bubble Buster Cycle”, which Andrew Pancholi, my co-author on Zero Hour, first suggested to me. I have since found more reasons to get serious about its importance.
It’s a cycle that brought us the two greatest resets since the Industrial Revolution: the first in 1873 to 1843, the second from 1929 to 1933.
But there are some indicators that suggest the possibility that markets don’t go a lot higher before they peak. The more trusted indicators of the past may not work that well now that massive government intervention has turned everything upside down. Markets are “not so free” anymore!
In the September Boom & Bust issue, I discuss both scenarios and talk about the potential of a surprise crash just ahead. Let’s explore that a little now…
Bigger Than Before, But Not Imminent
The Smart Money Flow Index strongly suggests that we’re heading toward a larger crash than the prior two, but it’s not necessarily imminent. They have not been buying into the rally of 2018.
Goldman Sachs has a Bull/Bear Sentiment indicator that is now at an extreme 75% bullish reading. It hit a 70%-bullish level near the 2007 top and 72%-bullish level near the 2000 greater bubble top.
Both of these indicators warn of a major top coming, not a minor one.
But I’ve been warning this for years now, so this is nothing new!
