March 19, 2014

Could the Market be experiencing a blow off top now ?

Finally Mr. Market is beginning to show signs of aging. 

There have been clear-cut signs of loss of share price and impetus in certain leading market sectors, while momentum in corporate profit and sales growth has been slowing. Moreover, the short-selling community has been shattered and worn out, and now officially represents -- like the dodo bird -- an endangered species. Many hedge funds have totally abandoned the notion of hedging. Even some of the most stalwart bears -- like my friend/buddy/pal Bill Fleckenstein -- were reluctant to short.

Perhaps the proximate cause of this week's weakness was geopolitical, involving the Ukraine crisis -- an unexpected event that was outside the radar screens of most investors only two months ago. 

Or perhaps, as I observed last week in the Russell 2000's 3% move in one day, coupled with parabolic moves in a host of speculative stocks, there was a classic blow-off top. 

Regardless of the reasons, many of the sign posts of a concern and downturn have been posted in my Diary.

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