Sunday, April 3, 2016

8 hints of a market crash

I have 8 hints for market crashes in my book Complete the Art of Investing.

All markets are different:
* 2009 to today. The market rise is due to excessive printing of money.
* 2000 and 2007/2008 crashes were due to a trigger (over-priced internet stocks and derivatives respectively) and coupled with high interest rate (Fed discount rate were both over 5%).
* Last year's was due to the year right before election and this year too.
* Today it is due to the falling oil price (first time to sync with the market from my memory).

Fundamentals are confirmed by technical indicators that depend on the stock price. They worked like a champ in  last two market plunges/recoveries. Recently we have more false signals (telling you to exit and coming back shortly) as the market is more volatile than before.

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