At The End Of The Day, It's All About Confidence

While many factors contribute to their creation, market reversals only happen when a shift in sentiment occurs.

That’s why bull markets can go on for much longer than reason merits. As long as the marginal buyer is keeping the faith that he can sell to someone else for more, prices will remain elevated no matter how ugly the underlying fundamentals:

<img class=“aligncenter” src=“” alt="“Market Sentiment Life Cycle chart” width=“881” height=“448” />

But at some point, the once-bulletproof euphoria becomes exhausted. And at the critical margin, net buyers become net sellers. (For a reminder of the supreme importance the margin plays, revisit our report The Marginal Buyer Holds The Pin That Pops Every Asset Bubble)

Here at, we’ve been waving a giant warning flag of late that the scorching rally since January is a massive head-fake; unwarranted and completely unsustainable.

In our recent piece, The Bull(y) Rally, we exposed how an extreme and unnatural amount of hand-waving, jawboning and razzle-dazzle from the central State has been expended to ‘justify’ the ludicrous levels today’s prices are at given the preponderance of data showing the world economy is sliding into recession.

We’ve been shining a bright light on the technical compression seen in the major stock indices, indicative that a major breakout move is coming – one we’ve argued is much more likely to happen to the downside.

Well, with the recent fizzling of the principal storyline supporting the bullish narrative – an imminent trade deal with China – our predicted downside breakdown finally occurred this week:

<img class=“aligncenter” src=“” alt="“S&P 500 Futures breakdown chart” width=“1200” height=“682” />

The above chart comes from Sven Henrick’s excellent work tracking the technical overextension of the major indices. From it, you can clearly see how the S&P has broken decisively below the ‘rising wedge’ formation it had been trading in since the start of 2019.

Confidence in the ‘Neverending Rally’ narrative has been broken. Sentiment has suddenly shifted from greed to fear:

<img class=“aligncenter wp-image-361517” src=“” alt=““Fear & Greed index” width=“1278” height=“646” /><img class=“aligncenter wp-image-361518 size-large” src=“” alt=”“Fear & Greed Over Time chart” width=“1024” height=“514” />

So the big question is: What comes next?

Without a game-changing trade deal, all we’re left with is a slumping global economy, growing civil unrest across the world, a looming corporate debt crisis – all while are assets still hovering at all-time high valuation multiples.

Look back at that chart of the S&P. It’s dangerously now looking like the market has made a triple top over the past year.

So…the fundamentals are bad, the technicals are fast deteriorating, and market sentiment is collapsing.

This is one of those moments where it’s easy to predict that tough times lie ahead.

The intelligent question to be asking right now is: What to do about it?

Well, it won’t come as a surprise to readers that we advise prioritizing cultivating resilience as the best strategy to weather what’s coming. Invest in your financial security, your health, your relationships, your knowledge base, your home preparations.

That’s why we specifically made the focus of our recent annual seminar to be a “resilience accelerator”. Insight alone isn’t enough, you need to take informed action based upon it. (Those who didn’t attend the seminar can still purchase a replay video of the entire event, over 15 hours of material – watch the intro for free here)

It’s important not to feel powerless. There are ways, many ways, to reduce your risk exposure if you put proven science to work in your favor. Here’s an example of this in action (FYI, it takes a few minutes for the momentum pick up):

(for more on the math behind the Birthday Game, click here)

As the above shows, some of these strategies are not intuitive, which is why we strongly recommend working with experienced professionals who understand the science of risk mitigation (like our endorsed financial advisors -- click here to schedule a free crash audit of your portfolio with them)

The important thing is to get your preparations in place before the next crisis hits. As this week’s sudden vaporization of the years-long “Everything is awesome!” narrative is now warning us, we very well may not have much more time left.

This is a companion discussion topic for the original entry at

Adam - Thanks for this and, very much, for the link to The Marginal Buyer Holds The Pin That Pops Every Asset Bubble). Really clear story here.

on whether we end up or down today…

PM’s should be getting hammered bigtime any time now.

Hello all,
I sent PMs to Adam yesterday and Chris today re: the obvious PP forum span/hacks. Here is Chris’ response from my PM to him this morning:
“Yeah, we’re 100% aware of this situation and working on it. It’s just a spam bot that has figured out the Captcha routine so we’re installing a new module that blocks by other more subtle criteria.
Just the usual spam warfare…new platform requires new tactics.
Thanks for your concern and keep letting us know if/when you find any spam on the site.”
So the PP team is aware of this and working to resolve it as soon as possible.

In fact, I have spent the last 2 hours clearing out the spam.
Not a solid 2 hours, but I click on a batch of 40 spam posts, send the request to the server and go back to writing. When the little circle stops spinning on the other tab, I go back and select another batch of 40.
Should be gone by end of day, hopefully.

Yes, we are EXTREMELY aware of the Forum spam situation.
Our IT team has been working on implementing more aggressive anti-spam defenses over the past few days – several of which are being pushed live this afternoon.
Fingers crossed, we should see a large drop in spam postings within the next 24 hours.

I finally made it to the end.
Your front page should now be clear of topic/forum spam.

Thanks Chris, Adam and the PP IT team for your very determined and successful efforts to block the forum spam-bots and clean-up the forums.

Forums are getting beat down harder than precious metals :stuck_out_tongue:
Whew, got through the multilevel Captcha!! Rest assured I am cleared to correctly identify multiple sets of grainy images of storefronts, crosswalks, traffic lights, fire hydrants, cars, bicycles, busses, mountains, etc. without a glitch, in the noble pursuit of eradicating PP Pixies. :wink: All for the good in the interests of PP online security and privacy. A minor inconvenience. Thanks PP guardians! :slight_smile:

Between 1) server spam 2) loss of “recent posts” comment line 3) captcha that catches the wrong ones, missing the above spam, 4) the accompanying redux of dialog, 5) possible functionality bugginess
I’m going to say that it seems entirely possible that this server migration may prove fatal to the PP groups and conversations.
That said, the truly fatal part may well have been about two years ago, when … ??? I’m not sure what happened, but I’m sensing that that was when something started to fall apart.
It would appear that the right path has been lost. But even if acknowledged, there is a question of what to do about it… or not.

I agree with you, Michael, that the recent new site “issues” have been very frustrating! But no more so than to the people behind the scenes working endlessly to create this site, and to develop content and deliver it faithfully (Chris, Adam, and member support).
That in mind, I have never seen a team of individuals more dedicated to seeing the bigger truths and having the data, the context, and the timeliness to present these topics to us in a digestible fashion.
Add in the fact that the “”markets”” have not reflected what is truly going on for a very, very long time now…I find I cannot criticize, not hedge about success or demise…but offer instead, my gratitude for all the resilience that lives here, including the ability to resolve some new site “bugs.” These are our first world problems, for some perspective.
For the sake of all the coversations yet to be born here, I hope we all find ourselves willing to hang in if we can.

I figured this server migration would take months before things get fully ironed out. Even the dedication of Chris, Adam, and the rest of the team can’t magically change the laws of IT and Coding, which pretty much follow a corollary to Murphy’s Law; whatever can go wrong, will, and the chances that every two fixes will bring another broken thing are high.
Give them time. It’ll all get sorted out. =)

Many thanks for the vote of confidence AND for the tolerance of this period of growing pains, Snydeman.
Yep, I’ve been through a number of site launches in my life and there’s always the unexpected left deal with once you flip the switch. As any developer will tell you, no deployment goes without hiccups.
That said, we’ve had some real technical challenges to contend with on this migration – the biggest of which are invisible to the community here. There has been a TREMENDOUS amount of work going on behind the scenes here since we pushed the new site live.
I’m just as frustrated as everyone else (actually, I’m likely a lot more) by the friction to the user site experience the bugs has generated. But I can commit that we won’t rest until we successfully gone through the full buglist.

I put “so far…” in the comment header, because I realize that there WILL be problems. I also understand that it will be more frustrating to you and the team, than anybody. But if nobody speaks up, then it might not be fixed.
On a bigger issue, I do wonder if we have lost track. Although I really enjoy Dave’s commentary, it seems to me that the PP focus has shifted to (a) things we are powerless over, such as false flags, (b) things that can and should be going away eventually but are temporarily empowering… and we currently are losing bigtime, such as financials.
So we have shifted to groans while the boot tramps over.
I don’t know if there’s something better, but I don’t see this as a positive.
And funny thing, I do agree with the basic PP message, just not so sure you have caught on to how it plays out.
Or whether I have caught on.
So my message is that in small and large, short and long term, we seem to have lost our way. Maybe we should look at finding it again.
Patience I have.

… which is a huge improvement, because nothing kills a conversation like being unable to see or hear. Reply still isn’t working on the compiled comments area, and seems to moderately work on the other areas, but that is a nonissue for workaround: I can post a new comment if I need to.

I mean, can anything express the insanity of the “”markets”” better than the fact that we’re in the midst of a major trade war, escalating daily, and a potential shooting war, yet stocks are way up for two straight days!

The main two headlines on my stock ticker, too, are perplexing:

Walmart sticks are up, despite:

A tariff war that will inevitably hurt Walmart.
It boggles the mind. How are stocks so far UP in the midst of such shitty conditions for the global economy, if not by shenanigans?