Why the Stock Market will Double – Nasdaq 10k, Dow 40k and S&P500 5k 1



Let’s Party like it’s 1999 and Tulips are a Trader’s Best Friend


Since Central Banks started printing money out of thin air, financial markets have seen massive inflows of freshly printed fuel. Stocks surged, bonds surged (record low rates) and more recently, even cryptocurrencies have surged….all three showing the same pattern that is called “Tulip Mania”…it’s everywhere nowadays. Madness.

Simply. Too. Much. Money.

1 Tulip bulb represented the value of a house downtown Amsterdam…

And most people thought this was normal…

 

 

I discussed it the other day, with a colleague, how we all accept a0.6% rate for a 2y German Bond as the new normal. Pay money to lend it out? Really? Have we all gone mad? Therefore, in my view, the Real Bubble is in Bonds = artificial, record low interest rates. At some point, rates will revert to the mean (as I explained here) and when the bond market collapses, money will flow out of bonds and into equities to preserve capital. Bonds will likely collapse by 50% or more. Interest rates will double. Just give it some time. And patience.

Like it or not, but it’s very likely that the Pattern (history) will repeat itself. Take a look at 1999, a parabolic move. Today, we have a different environment, but the pattern, so far, seems to be formed the same way as in 1999. That would lead to a Nasdaq of 10k = double your money in a couple of years. And then get the hell out of there as it will likely drop 30%-50% after the final blow off top to Nasdaq 10k+.

So for the next few months, a re-test of the 4800-5100-5400 area could be the last opportunity to step on board for the final ride up.

A successful retest of red support (hyperbole @4800-5400) & a break above 5900 and it’s off to the moon…

Prepare yourself for an UP CRASH. Read more about how I position my assets to be financially prepared… 

The chart below is what I envision when I think about the Flight to Private Assets and why Sovereign Bonds are the Real Bubble Trade


NASDAQ MONTHLY CHART




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One thought on “Why the Stock Market will Double – Nasdaq 10k, Dow 40k and S&P500 5k

  • seth

    I don’t think so. Sovereign Bond Markets don’t crash. If there are negative interest rates, then it is because economic data would suggest that the economy needs that level of stimulus. But if at any point, as you say, there is “simply too much money” then the reverse economic measures are taken by the central banks. Lowering interest rates is to INCREASE the money supply, so data would suggest the “too much money” you mention is needed. But when people have borrowed enough money at negative interest rates to reach the target money supply level, interest rates mcan begin to be taised again to SHRINK the money supply. The bond market sovereign bond market doesn’t crash because the interest rates are. controlled. If no one is purchasing bonds due to negative interest rates, it is not to Crash the bond market, only impede it temporarily. Where there are negative interet rates now, that money could have already been borrowed and a negative return exchanged for a positive return in stocks anyways. Sonthe big boom you spesk of is over. Interest rates are beginning to be raised now. USA is doing it. Britain is. Ithers will follow. The move to decrease the money supply is happening again, and bond market will move up, not crash. Whatever sovereign bonds were being held before interest rates went negative are still likely being held to maturity, in most cases, sonI don’t know how the sovereign bond market “crashes” as you say. Its only an impedimentbon new issuance, which returns to positive rates in time. Unless I’m missing something.