Is the stock market in a bubble?
You can thank the reckless funny money printing that the Federal Reserve has been doing for the incredible bull market over the last 5 years. The Dow and the S&P 500 have both hit levels not seen since 2007, and many analysts are projecting another banner year for stocks in 2014.
You can see a wedge forming in the blue lines of the chart where the price will have to break up or down. It looks like another bubble looking for a pin to me.
And the media will blame the crash on a failure of free market capitalism. And the government will use it as an opportunity take even more control of the economy and the monetary system. But we left the last hint of free markets way back at QE1. We are at QE to infinity and beyond now. There is nothing free market about printing 75 billion dollars a month to support the stock and bond market to give the illusion of a recovery.
If you have restored your 401k balance during this run, congratulations. But it might be a good time to lock in those profits and hunker down for a while.
More fun with charts…