As the “bull” (yes, I know it’s a cow) in the cartoon above has vaccination dreams to cure the China Virus and all will be well for Dow 50,000, the truth is the underlying indicators and commodities are indicating some very bad omens. For this bull market to continue with insane speculation on anything from ponzicoins to commodities or even decrepit real estate, it would appear the Fed and the current administration are going to have to do some seriously creative monetary injections into the middle class wallet to keep the bubble going.
For example, check out this chart of lumber, a dire problem created by numerous issues which may well crash the real estate boom on its own:
At some point, which is where we are at now, the home building industry will pare back on spec home construction, apartments, and condominiums because the margins will become untenable. So what skyrockets up as a result of speculation will come cratering to earth, especially real estate.
Copper is also along for the ride, doubling in price in just one year:
Price movements like this in primary metals will result in companies having to pass massive price increases to the end user and as a result will stifle the ability of consumers to purchase some products. Time will tell but a $4.50 price for copper does not seem too insane at this time.
Meanwhile in equity world, the S&P 500 continues its march to new all time highs and has the underlying support to indicate this is a “normal” move:
With the insanity of the markets over the past decade the large cap S&P 500 should indicate what the chart above demonstrates. However, the underlying broader market is providing hints of vaccine rejection and rot developing. First up, the NYSE:
It is a much slower deterioration but it is there, just like the June and July of last year. The NASDAQ however is much more pronounced with many individual issues already in bear markets of their own:
If there is anything to take away from this Fed liquidity induced market in everything from ponzicoins to pot, big caps to SPAC craps, and government spending to insane individual speculation, at some point this too will crash. For our nation’s economy, some senile leaders in D.C. had best pray it doesn’t come crashing down all at once.