And The Market Drops

Last Friday the stock market had a nice little pull back. Then is continued into Monday. Basically wiping out all the gains it has made for 2018. Now this isn’t a big deal at this time since pull backs are healthy for the market. Especially since this one has had so few lately.
Having said that it would be advised to keep an eye on it. What I’m expecting is another down day and then it should pick back up and break it peak. If things go as they have in the past we should see some new all-time highs then the real drop will begin.
The reason I say this is from what I can see everything is set for the start of another major recession. Some of the main indicators are full employment. Long bull market run, which has been going on since 2009. High consumer confidence that is supported by high consumer debt.
The reason I say these few factors are a bad sign is they almost always predict the drop. When people are exuberant and think things are always going to go up they typically buy more and take on more debt. This would mean everyone is fully invested into this market. That means there is no one else to join the party. The last ones to the party are the ones left with the tab.
The last couple years have been stellar for the market. Almost strait up without hardly a single blip on the radar. This is not sustainable. Markets need a rest once and awhile and the longer it goes without a rest typically things go poorly. As we can see the last couple days have been a brutal drop. The market should start to see more volatility and hopefully we see some movement up and down as it digests this last couple year’s run away bull market. Happy investing and hope you’re on the right side. This is purely my opinion and not intended to be investment advice.
Thanks

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