Here’s what we do know. We know that the S&P 500 (along with the Dow, NASDAQ, Russell 2000, etc.) is overvalued fundamentally and is at fundamental levels of previous crashes. We know that the price of the index has been historically far above its 200-day moving average, which proves a euphoria among investors and massive risks that they’re taking on.
Over Friday the 2nd and Monday, the 5th of February we saw a 666 point decline on the Dow followed by a 1.175 point decline on that Monday. The S&P 500 and other indexes fell similarly, percentage wise. These investors believe that stocks are cheap and that it’s a buying opportunity. So they’re running into (what in reality are still) overvalued stocks. This will put them fully invested and cause, unfortunately, the maximum pain. Yet their greed drives them to be “all in” at this point.
In the chart above, I’ve drawn (in yellow) what I believe could potentially unfold. Whether this plays out exactly like this or not, just know that it doesn’t negate the massive risks that investors are taking on right now that haven’t fully been felt.
You see, most investors only perceive there being risks once its felt (like housing in 2008). Yet up until that point, it didn’t “feel” risky at all…yet there were enormous risks that were soon to be fully realized.
Well, I know we’re at that point again…just like in 2008 and 2000 where investors have gotten carried away and they’re making decisions based off of emotions and without one rational thought. They’ve just passed through a point of “maximum optimism” or “maximum greed”, which is likely soon to turn violently against them.
Don’t get swept away in that. If you’re reading this and you’re not a subscriber of mine…trust me, you need a defined system to help you dodge huge downturns like the one that’s coming.
Simply click on any article or video on that Premium page and scroll to the bottom and you’ll see a sign-up button. Once signed up, go to the Ask Sean section and review the videos on that page and ask any questions you might have.
Lastly, help me to spread the word because a lot of people are about to experience another HUGE market downturn that they’re in no way prepared for. So for their sakes, please do me a HUGE favor and help me to spread the world about this article and others on www.seanhyman.com so that they’ll be informed and empowered during this time.