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I don't think that this ratio comparing total U.S. market cap to GDP has been posted on here, at least for awhile. My apologies if it has recently been posted. This article is from Jan. 11.
- The Buffett Indicator is reaching historic levels, both in absolute and relative terms - Its current reading of 230% is far beyond any peak level we've seen - All three previous instances of the Buffet Indicator getting this stretched were followed by declines of at least 25%
• Do you believe that the present administration has the slightest idea where their various interests and beliefs are going to take the general economy? @Mark, quoting Paul Krugman in another post: "ETTD: everything Trump touches dies."
@JD_co, in another post, notes that: "A loser with 6 bankruptcies who has left a trail of destruction in his wake at every turn is steering us off a cliff."
• Do you believe that anyone really has any idea where the evolution of AI is going to take the general economy?
• Is your present financial situation such that you could be comfortable with it's present value?
• Is your present financial situation such that it would be reasonably resistant to a major financial decline?
• If not, is there a value that would be acceptable if you were to lock in some percentage of your present gains?
We also are experiencing a cluster of Hindenburgs:
the Hindenburg Omen signal is that during a normal uptrend, there should be more stocks making New Highs than making New Lows. That is the normal condition. If you get a condition where the uptrend is still underway, but the numbers of New Lows start perking up, then that is a sign of trouble. What constitutes "perking up"? That's a matter for opinion, and perhaps back-testing, but Miekka set his threshold at both NH and NL being greater than 2.8% of Advances plus Declines on the same day. Other analysts might choose a different criterion, which people are perfectly allowed to do. But for the sake of consistency, and so as to avoid confusion, I stick with Miekka's criteria.
A single signal is interesting, but the message gets more compelling when we see clusters of multiple signals in a short time frame. We had a grouping of 5 signals from Oct. 29 to Nov. 13, 2025, but the market shrugged. Now we have 3 more (so far) and would have had a 4th on Feb. 4, 2026 except that the NYSE's McClellan A-D Oscillator was just barely positive that day.
Comments
To lock in gains or let it ride is the question!
"ETTD: everything Trump touches dies."
@JD_co, in another post, notes that: "A loser with 6 bankruptcies who has left a trail of destruction in his wake at every turn is steering us off a cliff."
• Do you believe that anyone really has any idea where the evolution of AI is going to take the general economy?
• Is your present financial situation such that you could be comfortable with it's present value?
• Is your present financial situation such that it would be reasonably resistant to a major financial decline?
• If not, is there a value that would be acceptable if you were to lock in some percentage of your present gains?