Wednesday , 6 December 2023

Harry Dent: Mark My Words: “The Bubble May Well Be Peaking!” (+3K Views)

Mark my words here: This third and final bubble (fourth if you count 1987)bubbles is now the biggest and most obvious bubble in this boom since 1983. It is as overvalued as at the top of 1929 and the fact that no one wants to hear about it is an ominous sign that it may well be peaking!

This article is an edited ([ ]) and revised (…) version of the original written by Harry Dent to ensure a faster & easier read. It may be re-posted as long as it includes a hyperlink back to this revised version to avoid copyright infringement.

Everyone is getting a free lunch:

  • stock prices are much higher than fair value; same with real estate prices
  • mortgage and car loan rates are the lowest ever
  • business borrowing costs are almost negligible.

Higher net worth, lower living costs what’s not to like – and, if that’s not enough, now people, especially business owners and major corporate executives, are going to get some major tax cuts – some as high as 87%!

No one wants it to end so everyone goes deeper into bubble denial. What people conveniently forget is that:

  • bubbles like this make our unprecedented income inequality worse because inflated financial assets greatly favor the top 0.1% to 10% that owns the great, great majority of them and
  • the deeper into denial they go, and the higher the bubble inflates, the bigger the crash when it finally all unravels. More people get hurt because they were suckered into a fool’s game….

…When this bubble bursts, the markets will shed points in a jagged way, dropping sharply with violent bear market rallies as well. Remember, as I always say, nothing moves up or down in a perfectly straight line…When all is said and done, my target for the Dow is 5,000 to 5,500 by early 2020. That’s a loss of 79% from here. We may even lose more, dropping as low as 3,000 to 4,000 into late 2022 or so. That would equate to an 87% loss.

I think there’s a good chance that this bubble is finally topping here in late October just as people are in the maximum bubble denial or it could be the beginning of a topping process that shows itself more in January forward. [Why? Because]

  1. Andrew Pancholi’s model at has the strongest turn point in decades this month and
  2. Secondly, the rising bearish wedge pattern I’ve been pointing to in recent months is right where it could top – and these tend to be terminal topping patterns. Here’s an update to this chart...

Scenario 1

On October 23 we were right at the top of this channel in a 5th wave up. Often at such a top there will be a “throw over” just above the top trend line. That is already happening today.

In this more likely Scenario 1, the market could turn back down.

  • The first blue dot would mark a break back down into the wedge and strongly suggest such a throw-over top.
  • The second blue dot would mark a break back below the bottom trend line in the wedge and further confirm that top and suggest sharper move down.

Scenario 2

Scenario 2 would see the break above the top channel line this week and then likely a retest of that top line in a mild pullback. Then it would hold there and continue to advance towards 24,000 – 25,000, where it could very well finally top by sometime in January.

No bubble can go on forever. They defeat themselves with their own extremes so, ask yourself: Do you want to be in the stock market if Trump finally bombs “Little Rocket Man?” Remember, the trigger for the 1987 bubble crash was the declaration of war against Iran. War is just one possible trigger. There are dozens of others just waiting to spring. The markets haven’t been this risky since March 2000 and September 1929.

…Once this bubble bursts, it [will] open up once-in-a-lifetime opportunities for you in stocks, real estate, and commodities (including gold). It [will] give you access to all of these assets at the lowest prices youll see in your lifetime

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