Bulls are not killed off easily, They are strong, fierce and have real staying power. And this is what should be expected at a top of a secular bull market. Injured or weakened, the bull will still go on which is the case with many stock markets. Whilst some markets have peaked globally, others show strength. A week ago markets were ruffled by major falls, Was that the signal for the end of a multi-decade bull or was it just another brief correction before the bull breaks out to much higher levels? With a further fall this week, the Dow is now down 2,000 points in October which certainly confirms that the bull is seriously injured, maybe fatally?

PRINT MONEY TO BUY VOTES

Let’s first make it clear that the world economy and global stock markets are at the end of the biggest bubble in history. A bubble fuelled by unprecedented stimulus from central banks and governments to prevent the financial system from imploding. As many of us know, credit expansion is the most effective and inexpensive method to buy votes. And it is the only way to artificially keep the economy going when governments run out of money.

MANIPULATED MARKET BASED ON ALGOS

So bubbles can expand a lot more than seems possible. Many markets, like the Chinese one which is down 27% have topped. Others like US indices finally look like they have reached the end of the road. Sound investment markets function efficiently based on the scarcity of capital. But when capital is endless and can be created at will by a printing press or an electronic entry on a computer, markets are no longer sound, nor efficient. And this is where we are today. There is nothing sound about markets or the economy today. Government and central bank manipulation combined with Algorithmic trading is as far from sound markets as you can get. But this is the sick system that dominates markets today. No ordinary investor can compete against Algo based systems backed by unlimited amounts of capital.