A lot of traders, even some frustrated precious metals investors, forget about the STAGES OF A FINANCIAL BUBBLE. It seems like after about ten years, all memory of the 2008 Financial Meltdown has been all but forgotten so let me publish the stages of a financial bubble to remind those who have either been brainwashed by the Mainstream Media or who have just forgotten the fundamentals:
The original article has been edited here for length (…) and clarity ([ ])
If I had to make a reasonable guesstimate, I would imagine we are somewhere going down the Peak slope or close to the Denial Stage. However, once the Dow Jones Index falls below 20,000 (I believe the TOP in the Dow Jones Index was likely 26,600 and, while we could see a higher high on the Dow, it’s probably a slim chance), we will know that the markets have entered into the Fear Stage. During the Fear Stage is when I see the price and demand for precious metals to increase. As we enter the Capitulation Stage (when the Dow Jones Index will experience at least a 50% decline), then we could experience precious metals demand like we have never seen before…
The markets will continue to be volatile before we head down to the Fear Stage. However, it’s likely a good idea that individuals consider owning the best HEDGE, Precious Metals, against everything that is wrong in these markets before things get ugly in the markets. Please understand this is not a recommendation, but just something to consider before the markets become unglued…
Again, if you believe this time is different and you can’t see how over-valued the Dow Index is based upon the MACD technical, then maybe it might be prudent to allow a Doctor to take a Cat-Scan to find out if you have any brains left in your head.
Related Articles From munKNEE.com:
In this article we review the characteristics and different stages of a bubble, present some recent asset price bubbles, and identify current conditions which match up with traditional bubble criteria.
…Volatility has now returned to the stock market after a hibernation of several years…[and such] an explosion of volatility is indicative of a change of trend. The recent signals transmitted by this market have been classic and have been telling us that we have entered the final topping process of this extended and stretched economic cycle.