Friday, December 19, 2014

Ridiculously Bullish

The bull market is entering warp speed.  We are entering the bubble phase here, higher volatility, more abrupt fast moves, up and down, and VIX that is trading closer to 20 than 10.  We are at all time highs and the VIX, which would normally be trading around 12 or 13 in previous instances last year and this year, is now trading above 16, right in front of Christmas.  Ridiculous.  A bit 2007-esque.  Remember, the low in VIX during the bull run from 2003 to 2007 was from 2005 to early 2007, not summer or fall of 2007 when the S&P hit its peak.  Long term tops are marked by higher VIX readings, not lower.

The VIX has been quite sticky here, maintaining higher levels despite the rally.
I believe we are now entering a new phase of this bull market, more volatile, more rapid moves up and down with very few warning signs.  This 110 point pullback really showed no symptoms of weakness before the drop.  It just happened.  It will be a more vicious and treacherous market out there.  I have finally seen the first signs of a long term top of this bull market.  This bull market is on the clock.  I give it 9 months max from here.  Next year  should be similar to 2000 and 2007.  2015 will be quite the show.

3 comments:

Anonymous said...

What could be the fundamental triggers for market decline in 2015? Thx

Market Owl said...

Lots of IPOs and secondaries, fewer stock buybacks due to wider credit spreads and higher interest rates making it more expensive to borrow money.

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