It isn’t going to be a surprise when U.S. stock prices fall 50, 60 or 70 percent from where they are today. The only real surprise is that it took this long for it to happen. Even after falling 362 points on Tuesday, the Dow Jones industrial average is still ridiculously high. In fact, the only two times in our entire history when stocks have been this overvalued were right before the stock market crash of 1929 and right before the dotcom bubble burst. Not even before the financial crisis of 2008 were stock valuations as absurd as they are right now. At one point on Tuesday, the Dow had declined by more than 400 points, and we have not seen this sort of panic in the stock market in a very long time.
In fact, we have to go all the way back to June 24, 2016 to find the last time that the Dow fell by at least this much. The Dow has dropped by triple digits on back to back days for the first time since last April, and a lot of analysts are wondering what is coming next. Of course most in the financial community have been waiting for some sort of a decline, because even mainstream analysts are openly admitting that what we have been witnessing is “not sustainable”… “We’ve had a unilateral move higher [in stocks] to start things off and people are realizing this is not sustainable,” said Art Hogan, chief market strategist at B. Riley FBR. “You’re also seeing some cracks in the global story with interest rates rising.” FULL REPORT
