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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: techtrader73 who wrote (93109)	6/2/2017 6:24:35 AM
From: GROUND ZERO™	1 Recommendation Recommended By Hawkmoon Respond to of 223016

We already know these markets look 6 to 9 months ahead and current market prices reflect expectation and not current reality... therefore, if the expectations the market currently anticipates don't materialize, then we could look back and call this a frothy market... a frothy market could only be known by looking back and not by looking ahead... if the economic promises are not delivered, then we're currently looking at a frothy market... but if the economic promises actually do materialize, then the market was right in the first place... there's no way of knowing in advance how economic promises for the future will actually turn out unless someone has a crystal ball, there's no way of knowing if current market prices are detached from their underlying intrinsic values until we see the success or failure of those economic promises... I'd say in the debate between you and rogermci, each of you are looking at very different components and are talking past each other... rogermci is looking at the current market action and you're predicting that the economic promises will not be delivered therefore the current market action is frothy and false... there's no way to know which of you are right until we see the eventual outcome of those economic promises... if those promises are delivered, then rogermci will be right and his investments will grow... if you're right, then rogermci will need to find a strategy to protect his market gains... rogermci is betting on the market action itself, you're betting on the future failure to deliver those economic promises... THE HOLLAND BULB MARKET An interesting example of a frothy market was Holland's tulip bulb market in the early 1600's. The market for tulip bulbs went through a huge run up and crash. People mortgaged whatever they could to raise cash to trade tulip bulbs. In 1633, a farmhouse changed hands for three tulip bulbs. The market top came in the winter of 1636-37 when a single tulip bulb, left along with 70 other tulip bulbs as seven orphans' only inheritance, sold for 5,200 guilders. Soon after the top, tulip bulbs traded for 1/100 of what they had two weeks earlier. Q. What makes a frothy market??? A. Market conditions preceding an actual market bubble where asset prices become detached from their underlying intrinsic values as demand for those assets drives their prices to unsustainable levels. Market froth marks the beginning of unsustainable rates of asset price inflation. investopedia.com GZ