The Next Bubble

THE UNEXPECTED - We can't know when the stock market will ever really turn and I keep saying we need to see that establishment back below 2400 in the SPX500 for things to get going. But one of the things I can't help but do, is to try and play a guessing game of what that catalyst will be that is blamed for the meltdown. It doesn't have to be something that is necessarily responsible for why we've arrived at this overinflated, artificially supported equities market. It could be something out of left field that finally does the market in. When you look back at the Baltic Spark and the assassination of Archduke Franz Ferdinand, who would have thought this would lead to WW1? So what could it be that finally knocks the market back to earth?

cartoon sep 14

DRUM ROLL - Well, there is one thing out there that keeps coming to mind. To answer this one, you need to ask yourself what market out there has seen such an intense wave of euphoria that it makes the stock market rally look like a snoozefest? What market out there has VCs and hedge funds running into it as fast as they can? Ok...I'll stop teasing. The answer is Bitcoin! Yes. Bitcoin! The world of cryptpcurrency has gone bonkers and everyone and their mother now wants a piece. A coin that was on life support just a few years back, has traded up just shy $5000 in recent days! That's $5000 for one coin! We've been covering the coin for some time, but lately, things have gotten way out of control.

BLOCKCHAIN - Now I will say that there are a lot of amazing things going on in the world of Bitcoin, which is more of an ambassador to an amazing technology than the actual reason it's all gone mad. You see, Bitcoin is built on something called the Blockchain, and the Blockchain offers amazing optimizations to existing business models and a new frontier for the birth of exciting new models. The technology has solved the need for intermediaries, allowing the world to find comfort in a different, far more efficient system of trust. There is so much more than just that and I will take the time to go through it all in another report. But the point is, the technology is a game changer and has been compared to things like the birth of the internet or the invention of the cellular phone.

When you think of a market bubble, which market are you thinking about?

THE CHEF - Still, this is all happening very fast and it has created an environment where no one is even stopping to look and see what it's all about. Everyone just wants a piece and is happy to sit back only after they get there hands on it. Blockchain products have been coming to markets like hotcakes and companies are raising hundreds of millions of dollars without even needing to show something called proof of concept. If you say you're raising money and use the word Blockchain, you will get buried in investment funds. You could tell someone you're a chef raising money for a Blockchain recipe and people will just hear Blockchain and throw that money to ya.

ONE DOOR - So yes. We're in a massive bubble here and that bubble is the speculation of all speculations. These are the types of things you look for when you think it's all about to fall apart and I don't think it's so far fetched to assume that a collapse in this space, resulting in huge loss to the investment community, could be the type of thing that gets the traditional equity investor nervous and heading for the exit doors. And yet, as I have highlighted in previous updates, when talking about the exit doors, there really is only one, singular exit door. And it ain't going to be pretty when everyone is trying to run through it at the same time. So look out dotcom comes the bitcoin bubble.

Currency Pairs

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It Hasn't Even Started

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SPX500, Yen and Euro

Here's a look at the downside we could see in US equities and how this, along...