And the bubble gets bigger….
This chart of all three major US Indices displays the nice U recovery followed by a narrow trading range technical traders expect. Over the long term, fundamentals prevail however. The market will tank again.
Note the following index closing prices:
Date, SPX, DJX, NASDAQ
Sept-10, 1092, 9606, 1695
Nov-6, 1120, 9545, 1834
%CNG, +2.6, -0.614, 8.20
How can the S&P 500 and NASDAQ gain after the 9-11 attacks, the start of Vietnam II and a worsening economy? (BTW, if the economy wasn’t continuing to deteriorate, the Fed wouldn’t have cut another ½ pt today.)
Think about the increased expenses to protect our citizenry, the additional time we will waste at airports, bridges, tall buildings, etc., the reduced prospect of consumer spending…. The 9-11 realization took at least 3% (my subjective guess) out of the true value of the U.S. economy. Without good news to compensate for this, can we conclude that the public markets are more overvalued than before? I hope not.