Dow Closes At Record High For 9th Straight Time, But Experts Warn Stock Market Crash Could Be Imminent

The bigger they come, the harder they fall.  On Monday, the Dow Jones Industrial Average closed at a record high for the ninth straight session.  It has been a remarkable run, but many experts are pointing out that big trouble is brewing under the surface.  As you will see below, 79 components of the S&P 500 have already dropped more than 20 percent below their 52-week highs, and it is mostly just a handful of high flying tech stocks that are still propping up the market at this point.  Over the past several weeks, I have been documenting so many of the prominent voices that are loudly warning about an imminent stock market crash, and in this article you will hear some more of these warnings.  There is no way that stock prices can keep going up like this, and when the inevitable correction does arrive it is going to be exceedingly painful for millions of investors.

When the market is about to turn in a major way, one of the key things to watch is market breadth, and according to Brad Lamensdorf market breadth has now turned “exceedingly negative”

Market breadth, a measure of how many stocks are rising versus the number that are dropping, has turned “exceedingly negative,” according to Brad Lamensdorf, a portfolio manager at Ranger Alternative Management. Lamensdorf writes the Lamensdorf Market Timing Report newsletter and runs the AdvisorShares Ranger Equity Bear ETF HDGE, -0.70% an exchange-traded fund that “shorts” stocks, or bets that they will fall.

“As the indexes continue to produce a series of higher highs, subsurface conditions are painting an entirely different picture,” Lamensdorf wrote in the latest edition of the newsletter.

When Lamensdorf uses the phrase “exceedingly negative”, he is not exaggerating at all.  As I mentioned above, 79 components of the S&P 500 are already in a bear market

According to an analysis of FactSet data, 79 components of the S&P 500 are trading at least 20% below their 52-week high; a bear market is typically defined as a 20% drop from a peak.

Another key measure that I like to keep my eye on is Robert Shiller’s cyclically adjusted price-to-earnings ratio.  At this point, it is roughly at the same level as it was just before the stock market crash of 1929, and the only time it has been higher was during the peak of the dotcom bubble.

This is why so many investors are making extremely large bets that a major correction is imminent.  History tells us that stocks are likely to only go down from here.  And when stocks do start falling, the price action could become quite violent.  In fact, Barry James is comparing this current market to the Yellowstone supervolcano

Warning: A correction in the market is “inevitable” and there are three key factors that could spark chaos on Wall Street, according to James Advantage Fund president Barry James.

The investor likened the market to Yellowstone National Park’s famous supervolcano, which many believe is close to eruption.

Of course not everyone agrees with James.  Michael Wilson of Morgan Stanley insists that everything is just fine and that “there continues to be a level of skepticism that seems out of whack with what is actually happening”.

In the end, we will see how the coming months play out.

Over the past several years, there have been two primary trends that have been relentlessly driving up stock prices.  One of these trends has been an unprecedented level of stock buybacks.  And so far this year, hundreds of billions of dollars worth of stock buybacks have already been announced

Through May, some $390 billion in buybacks have been announced this year, $13 billion more than at this time in 2016, according to figures compiled by Jeffrey Yale Rubin at Birinyi Associates, a stock market research firm.

June 28 was the biggest single buyback announcement day in history. That was when 26 banks disclosed buybacks worth $92.8 billion, largely a response to having just passed the stress tests administered by the Federal Reserve Board. That figure blew past the previous record of $56.4 billion announced on July 20, 2006.

Secondly, central banks have been pumping trillions upon trillions of dollars into the global financial system, and this has perhaps been the biggest reason for the surge in stock prices.  But now central banks are starting to pull back, and that could mean big trouble very soon.  The following comes from Matt King

With asset prices displaying a high degree of correlation with central bank liquidity additions in recent years, that feedback loop makes the economy, upon which both corporate profitability and bank net interest margins depend, more reliant on central banks holding markets together than almost ever before. That delicate balance may well be sustained for the time being. But with central banks beginning to move, however gingerly, towards an exit, is it really worth chasing the last few bp of spread from here?

Throughout our history we have seen financial bubbles come and go, but we never seen to learn from our mistakes.  Right now, Warren Buffett is sitting on nearly 100 billion dollars in cash in anticipation of being able to buy up financial assets for a song after a crash happens, but meanwhile multitudes of ordinary Americanscontinue to pour vast quantities of money into stocks even at such absurd valuations.

Despite all of the warnings, many will be caught unprepared when the music stops playing.  Just like all of the other financial manias in our history, this one will come to a bitter end too.  The following comes from the New York Times

In the late 1960s the mania was for the “nifty 50” American companies like Disney and McDonald’s, which had been the “go-go” stocks of that decade. In the late 1970s it was for natural resources, from gold to oil. In the late 1980s it was stocks in Japan, and in the late 1990s it was the dot-com boom. Last decade, investors flocked to mortgage-backed securities and big emerging markets from Brazil to Russia. In every case, many partygoers were still in the market when the crash came.

In life, timing is everything, and those that got out of the market in time are going to end up being very happy that they did so.

But those that stay in too long are going to see their “paper wealth” disappear in a blinding flash, and there won’t be any way to get it back once it is gone.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

Photo: AmishRob Danger Beyond This Point via photopin (license)

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  • JohnDille

    Scientists say that 2016 has been confirmed as the warmest year on record. (Photo: Getty/EyeEm)More

    The evidence behind global climate change continues to mount, and scientists keep speaking out. Now they hope the world will listen.

    The latest international climate report from the National Oceanic and Atmospheric Administration (NOAA) confirms that 2016 was the third consecutive year of record global heat.

    On Thursday afternoon the American Meteorological Society published the 27th annual “State of the Climate” report, which verifies last year surpassed 2015 as the hottest since record keeping began in 1880.

    Based on preliminary data, NASA and NOOA had made the same assessment back in January, but this week’s report is considered definitive.

    “We’re scientists, and we’re providing objective information,” Jessica Blunden, a climate scientist at NOAA’s National Climatic Data Center in Asheville, N.C., told Yahoo News. “We don’t go into policy, but we provide the information for people who want to go further with that.”

    According to the report, the effect of long-term global warming and a powerful El Niño early on pushed 2016 into record-setting warmth. The global average sea level reached a new record high last year as well, to 3.25 inches above the average level in 1993, which marks the beginning of the satellite altimeter record.

    Scientists also said that the average Arctic land surface temperature continued to warm and global ice and snow cover continued to decline. Sea ice extents in the Antarctic hit record daily and monthly lows in August and November.

  • daniel1154

    You said you worked for Walmart for 6 years. Did you make 15 an hour there?

    Why is your social security only $600 a month as you claim if you worked for more than minimum wage?

  • JohnDille

    MINIMUM WAGE… AS I DEFINE IT… AND AS MOST WORKING PEOPLE WOULD DEFINE IT IF THEY WERE EXPERTS ON THE SUBJECT… LIKE I AM… IS ANYTHING UNDER 15 DOLLARS AN HOUR… WHICH MEANS THAT RIGHT AT HALF OF ALL AMERICANS WORK FOR MINIMUM WAGE!!! MAYBE YOU ARE TOO STUPID TO UNDERSTAND THAT REALITY… BUT I GUARANTEE YOU… A SOLID MAJORITY OF WORKING PEOPLE ARE ALL TOO FAMILIAR WITH THAT CONCEPT!!! IF YOU HAD EVER ACTUALLY HELD A REAL JOB, YOU WOULD KNOW WHAT I AM TALKING ABOUT!!! BUT… SINCE YOU GOT LUCKY AND GET PAID BIG BUCKS TO DO NOTHING OF ANY SUBSTANCE, I GUESS YOU ARE JUST IGNORANT… OR STUPID!!!

  • daniel1154

    Comrade Dillweed, you don’t have any clients. You said you worked for minimum wage your entire life, and are now collecting social security. Someone who worked at Walmart as you said you did does not deal with business executives, other than to welcome them to Walmart.

    If you are going to lie, at least remember your old lies so you can be consistent.

  • JohnDille

    WHY WOULDN’T I BELIEVE WHAT I JUST WROTE???? I HAVE SEEN PEOPLE DO THAT, WITH MY OWN EYES…. AND HAVE HEARD ABOUT MANY OTHER PEOPLE DOING THE SAME THING!!! WHEN I SEND INFORMATION TO MY CLIENTS, THEY ALMOST ALWAYS ASK ME TO SEND THE INFORMATION TO THEIR PRIVATE SERVERS, EVEN THOUGH ALMOST ALL OF THOSE FOLKS ARE GOVERNMENT OFICIALS OR BUSINESS EXECUTIVES!!! I ALMOST NEVER SEND INFORMATION TO ANY GOVERNMENT AGENCY OR TO ANY CORPORATE OCFFICES, BECAUSE THE INFORMATION I AM SENDING IS MEANT FOR PRIVATE USE BY THOSE INDIVIDUAL CLIENTS!!! AND ITS NOT BECAUSE THE INFORMATION I AM SENDING IS SECRET OR ANYTHING… NEARLY ALL INFORMATION I SEND IS AVAILABLE ON THE INTERNET FR ANYOMNE WHO WANTS TO TAKE THE TIME TO FIND IT AND ANALYZE IT!!! ITS BECAUSE OFICIAL GOVERNMENT OR BUSINESS SERVERS ARE SO EASILY HACKED, ITS SAFER TO HAVE YOUR OWN PRIVATE SERVER THAT HAS NO APPARENT TIES TO THOSE OFFICAL SERVERS!!! EVEN AN IDIOT LIKE YOU SHOULD BE ABLE TO UNDERSTAND THAT!!!

  • daniel1154

    Even you are not biased and stupid enough to believe what you wrote. Anyone but a fool would know she used an alias to avoid detection regarding this tawdry incident, and no doubt others during her tenure. Also, only Obama appointees used this practice, and you never were taught anything by political and business people while working at Walmart.

    Who is “Elizabeth Carlisle” and why are her Department of Justice emails signed “AG”?

    The American Center for Law and Justice filed an Open Records request with the agency, seeking documents related to Attorney General Loretta Lynch’s mysterious airport tarmac meeting with Bill Clinton during the election.

    The group reports:

    We have just obtained hundreds of pages in our ongoing investigation and federal lawsuit on former Attorney General Loretta Lynch’s tarmac meeting with former President Bill Clinton while the Department of Justice (DOJ) and FBI had an ongoing criminal investigation into Hillary Clinton’s emails. The results are shocking.

    First, the Comey FBI lied to us. Last July, we sent FOIA requests to both the Comey FBI and the Lynch DOJ asking for any documents related to the Clinton Lynch plane meeting. The FBI, under the then directorship of James Comey, replied that “No records responsive to your request were located.”

    The documents we received today from the Department of Justice include several emails from the FBI to DOJ officials concerning the meeting. One with the subject line “FLAG” was correspondence between FBI officials (Richard Quinn, FBI Media/Investigative Publicity, and Michael Kortan) and DOJ officials concerning “flag[ing] a story . . . about a casual, unscheduled meeting between former president Bill Clinton and the AG.” The DOJ official instructs the FBI to “let me know if you get any questions about this” and provides “[o]ur talkers [DOJ talking points] on this”. The talking points, however are redacted.

    But eagle-eyed readers, including hacker Kim Dot Com, noted some emails involving Lynch came from an email address for “Elizabeth Carlisle.”

    One email, sent among DOJ employees, shows an email sent to “Elizabeth Carlisle,” but in the body of the email, it is addressed to “AG Lynch”:

    In the response, the person sending from the “Elizabeth Carlisle” address signs the email “AG”, who wrote, “Thanks to all who worked on this,” referring to a statement that was issued regarding the tarmac meeting with the husband of the person being investigated by the FBI.

    Observers note “Elizabeth” is Lynch’s middle name:

    If Lynch did indeed use an alias, it wouldn’t be the first time such a thing was done among Obama appointees.

    The Washington Times reported in 2013:

    Richard Windsor never existed at the EPA, but the agency awarded the fictional staffer’s email account certificates proving he had mastered all of the agency’s technology training — including declaring him a “scholar of ethical behavior,” according to documents disclosed late last week.

    Windsor.Richard@epa.gov was the controversial email alias used by former Environmental Protection Agency Administrator Lisa Jackson, who resigned earlier this year amid questions about whether her agency was complying with open-records laws.

    The new records — the latest in a series that EPA critics have pried loose under open-records requests — suggests Ms. Jackson used the alias even more widely than known, including taking required agency computer training under the fake identity.

    EPA officials say there’s nothing unusual in that, since Ms. Jackson used the alternate address regularly to conduct agency business.

    The reportedly was no DOJ employee by the name of “Elizabeth Carlisle” during the Obama administration.

  • daniel1154

    Comarad Dillweed. Do you do anything other than shill for the Democrat party? Don’t you have any interests other than trying to prop up crooks and liars that are going extinct? Do you follow baseball? Do you like music? Movies? Go to shows? Restaurants? Do you cook?

    Do you do anything other than spew hate on behalf of other haters?

  • JohnDille

    SO… YOU ARE TELLING ME THAT WELL KNOWN PEOPLE… IN AND OUT OF GOVERNMENT… USE FAKE NAMES AND PRIVATE SERVERS TO HIDE THEIR BUSINESS AND PRIVATE MATTERS FROM HACKERS AND OTHER CRIMINALS??? GEE…. GLAD YOU FINALLY… FINALLY… FINALLY REALIZED THAT!!! THE SEVERAL POLITICAL AND BUSINESS POPLE I KNOW TAUGHT ME THAT TRICK BACK IN THE 1990’S… WHEN THE WHOLE E-MAIL THING WAS JUST GETTING STARTED, AND WHEN HACKERS WERE A LOT LESS SOPHISTICATED!!! THEY HAVE TO DO THAT, NOW…. JUST THINK HOW EASY IT IS FOR HACKERS TO DIG INTO GOVERNMENT NETWORKS… BECAUSE THEY HAVE ACCESS TO THE NAMES AND OTHER DETAILS OF ALL GOVERNMENT EMPLOYEES!!! WHICH EXPLAINS WHY PRETTY MUCH ALL… ALL… ALL GOVERNMENT EMPLOYEES USE PRIVATE SERVERS THAT ARE AS MUCH DISCONNECTED FROM THE GOVERNMENTS NETWORKS AS POSSIBLE!!! IF YOU DID NOT KNOW THAT…. YOU ARE LYING TO US ABOUT YOUR MAKING BIG BUCKS IN THE AEROSPACE INDUSTRY!!! ANY PROFESSIONAL IN ANY INDUSTRY WOULD USE THOSE KIND OF TACTICS TO HIDE THEIR IMPORTANT STUFF… TOTALLY OUT OF NECESSITY!!!

  • daniel1154

    Meanwhile, as for hard news that actually matters. Don’t you want an honest government Dillweed?

    Here Is The Alias Email Account Loretta Lynch Used As Attorney General

    Like her predecessor, Eric Holder, former Attorney General Loretta Lynch used an email alias to conduct government business, The Daily Caller has confirmed.

    Several of Lynch’s emails were included in 413 pages of DOJ documents provided to the conservative groups Judicial Watch and the American Center for Law and Justice. Both groups had filed lawsuits for records regarding Lynch’s controversial meeting with President Bill Clinton at the Phoenix airport last June 27.

    Using the pseudonym “Elizabeth Carlisle,” Lynch corresponded with DOJ press officials to hammer out talking points in response to media requests about the meeting. The tarmac encounter drew criticism from conservatives because Lynch was overseeing the federal investigation into whether Hillary Clinton mishandled classified information on her private email system.

    The meeting was revealed not by Lynch, Clinton or the Justice Department, but by a reporter in Phoenix working based on a tip.

    On June 28, a reporter with Phoenix’s ABC News affiliate contacted the Justice Department to inquire about the meeting. Internal DOJ emails show that the request touched off a mad-dash to develop talking points and statements to respond to the developing story.

    Lynch, using the Elizabeth Carlisle account, which was hosted on the Justice Department’s system, was also involved in those discussions.

    Lynch’s attorney, Robert Raben, confirmed to TheDC on Monday that Lynch emailed under that pseudonym. He pointed to an article published in The Hill last February in which the Justice Department acknowledged that Lynch was using an email handle that was not her given name.

    “That address was and is known to the individuals who process [Freedom of Information Act] requests; the practice, similar to using initials or numbers in an email, helps guard against security risks and prevent inundation of mailboxes,” Raben said.

    The aversion to an overflowing email inbox was one of the defenses offered by Holder after his use of a pseudonym was revealed last year. Holder used the alias “Lew Alcindor” — the birth name of NBA legend Kareem Abdul-Jabbar — as his email handle until he left DOJ in 2015.

    The Carlisle emails were discovered over the weekend by followers of Reddit accounts that support President Trump. Some users developed the theory that Lynch used her grandmother’s name as a her pseudonym. Others concluded that Lynch broke the law by using a pseudonym, though it is not illegal for government officials to do so.

    In one email, sent just minutes after ABC News inquired about the tarmac meeting, Melanie Newman, the director of DOJ’s public affairs office at the time, wrote an email to the Elizabeth Carlisle account that she addressed to “AG Lynch.”

  • JohnDille

    In a study released on Tuesday, the nonpartisan Wisconsin Legislative Fiscal Bureau concluded that the $3 billion taxpayer giveaway Gov. Scott Walker (R) and President Trump want to give to Foxconn in exchange for an LCD manufacturing plant in the southeastern part of the state wouldn’t be paid back for at least 25 years.

    “[A]ny cash-flow analysis that covers a period of nearly 30 years must be considered highly speculative, especially for a manufacturing facility and equipment that may have a limited useful life,” the study notes. In other words, by the time the plant would theoretically pay off for taxpayers, it may be no longer be operational. No one knows if there will even be a need for these kind of LCD screens 25 years from now.

    But even in the best-case scenario where the plant creates 13,000 jobs filled almost entirely by residents of Wisconsin — the study notes that “it is assumed that 10 percent of the projected new jobs will be filled by Illinois residents,” but because the plant might be built near the Illinois border, that percentage could be higher — the billions of dollars in tax credits the Taiwanese company would receive for payroll and capital expenditures wouldn’t be paid back until about 2042.

    Every citizen of Wisconsin is paying $519 so Trump could have this press conference The president is taking credit for a massive taxpayer giveaway to Foxconn

  • daniel1154

    Your political viewpoint is tired, bankrupt, rejected and irrelevant so you have to call people names.

    Stop being a useful idiot for the Democrat party. Enjoy life in your golden years. Do you like baseball?

  • JohnDille

    BECAUSE YOU RIGHT WINGERS ARE IGNORANT OR KIND OF RETARDED… SO YELLING AT YOU ALL ENSURES THAT AT LEAST SOME USEFUL INFORMATION OR THOUGHTFUL LOGIC HAS AN OPPORTUNITY TO SNEAK THROUGH THE VEIL OF IGNORANCE THAT PERMEATES YOUR PATHETIC EXISTANCE!!!

  • Tactical111

    WHY ARE YOU YELLING?????

  • JohnDille

    SO… THIS SNYDER FELLOW IS TELLING US THAT THE TRUMP BOOM IS JUST AOTHER SCAM… A MANIPULATION OF ALL THE TRUMP PUPPETS BY A HANDFUL OF RICH REPUBLICANS AND THEIR CAPTIVE CORPORATIONS… DESIGNED TO MAKE EVEN MORE TRILLIONS FOR RICH REPUBLICANS AT THE EXPENSE OF ORDINARY WORKING CLASS TRUMP PUPPETS???? SO… WHAT WOULD BE NEW ABOUT ANY OF THAT??? RICH REPUBLICANS HAVE MADE VAST FORTUNES AT THE EXPENSE OF ALL THE REPUBLICAN TRUE BELIEVING PUPPETS…MOSTLY VIA LIES AND FRAUDS AND OTHER SWINDLES…. JUST LIKE THE CURRENT CON ARTIST IN CHIEF HAS DONE!!! WE CAN GUESS THAT THE STUFF WILL HIT THE FAN IN ABOUT A MONTH OR SO… PROBABLY RIGHT AFTER LABOR DAY… WHICH HISTORICALLY IS WHEN BIG BOOMS GO BUST… AND ALSO ABOUT THE TIME THAT TRUMPS FIRST BUDGET IS SUPPOSED TO GO INTO EFFECT… IF REPUBLICANS EVEN BOTHER TO ACTUALLY PASS A BUDGET! AND ALSO ABOUT THE TIME THAT PEOPLE ALL OVER THE WORLD WILL START GETTING NERVOUS ABOUT THE FEDERAL GOVERNMENT DEFAULTING ON TS DEBT…. BECAUSE REPUBLICANS WILL STILL… AFTER 5 MONTHS OF WARNINGS… NOT HAVE PASSED AN INCREASE IN THE DEBT CEILING!!! FAR RIGHT RIGHT WINGERS WILL KEEP ON PLAYING THEIR CHIDISH GREED DRIVEN POLITICAL GAMES…. AND DEMOCRATS HAVE ABSOLUTELY NO GOOD REASON TO COOPERATE WITH THE REPUBLICANS ON RESOLVING THAT SITUATION… SO…. GUESS WHAT???? THE GOVERNMENT WILL LIKELY SHUT DOWN… MAYBE FOR WEEKS… OR EVEN MONTHS!!! NOT THAT ANYONE WOULD NOTICE MUCH….. TRUMP HAS NOT EVEN APPOINTED MORE THAN A TINY FRACTION OF THE PEOPLE HE IS SUPPOSED TO APPOINT TO GOVERNMENT… SO WE ARE STILL… IN EFFECT… OPERATING ON OBAMA’S BUDGET AND OBAMA’S APPOINTEES AND ON THE LAWS AND REGULATIONS THAT WERE IN EFFECT UNDER OBAMA…. NOT COUNTING A HANDFUL OF ENVIRONMENTAL REGULATIONS THAT A FEW FOSSIL FUEL BILLIONAIRES WANTED REPEALED, OF COURSE! BUT… ALL GOOD THINGS MUST END… AND ON OCTOBER 1, 2017…. THE GOVERNMENT WILL OFFICIALLY BE UNDER TRUMP’S CONTROL!!! AND THEN WE SHALL BEGIN TO SEE… IN A HIGHLY VISIBLE WAY, MOST LIKELY…. JUST HOW STUPID AND INCOMPETENT THE BIG MOUTH LIAR IN CHIEF REALLY IS!!! I MYSELF WILL ALMOST CERTAINLY HAVE GOTTEN SHORT ON SOME SELECT STOCKS… AND I WOULD ADVISE ALL SENSIBLE PEOPLE TO DO THE SAME!!! NOT THAT THERE ARE MANY SENSIBLE PEOPLE ON THIS RIGHT WING CHAT BOARD!!!