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Market Update: A Titanic Disaster Ahead?

Summary:
At this point, as go the leading Tech stocks, so go the markets. So much capital has crammed into the tech sector this year that it boggles the mind. Tech stocks now make up 40% of the market cap of the S&P 500. And despite their huge size, they continue to race higher. Nearly. Every. Single. Day. Here’s a chart of six of the biggest tech companies. Over just the past 7 trading days, they have increased a combined total of half a trillion dollars in market cap. That’s 0 billion, folks — in just a week! (Source) Looking at Amazon’s (AMZN) stock price, up nearly 20%(!) since the start of July, we see a trajectory that we’re familiar with — a near-vertical blow-off top: (Source) This is the classic manic ending to an asset price bubble — as seen when Bitcoin hit 19,000 in late 2017 and

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Market Update: A Titanic Disaster Ahead?

At this point, as go the leading Tech stocks, so go the markets.

So much capital has crammed into the tech sector this year that it boggles the mind. Tech stocks now make up 40% of the market cap of the S&P 500.

And despite their huge size, they continue to race higher. Nearly. Every. Single. Day.

Here’s a chart of six of the biggest tech companies. Over just the past 7 trading days, they have increased a combined total of half a trillion dollars in market cap. That’s $500 billion, folks — in just a week!

Big tech stocks gain $500 billion in past 7 trading days

(Source)

Looking at Amazon’s (AMZN) stock price, up nearly 20%(!) since the start of July, we see a trajectory that we’re familiar with — a near-vertical blow-off top:

AMZN stock chart

(Source)

This is the classic manic ending to an asset price bubble — as seen when Bitcoin hit 19,000 in late 2017 and when silver hit $49/oz in 2011. For further affirmation, watch this short video chapter from Crash Course on Bubbles.

In a way, this is comforting to see because it gives us confidence this insane, mindless, unjustified market euphoria will end soon. We just need to be prepared for the predictable violent aftermath when it does.

As we do each week, we’ve once again asked the lead partners at New Harbor Financial, Peak Prosperity’s endorsed financial advisor, to share their latest insights on the end of Great Tech Bubble and what comes next.

We spend a fair amount of time in this week’s video asking New Harbor for actionable options to protect recent gains from a potential pull-back, as well as how to position for a larger market melt-down if indeed Tech soon reverses and we experience a crash greater in magnitude than what we suffered in February:

Anyone interested in scheduling a free consultation and portfolio review with Mike and John can do so by clicking here.

And if you’re one of the many readers brand new to Peak Prosperity over the past few months, we strongly urge you get your financial situation in order in parallel with your ongoing physical coronavirus preparations.

We recommend you do so in partnership with a professional financial advisor who understands the macro risks to the market that we discuss on this website. If you’ve already got one, great.

But if not, consider talking to the team at New Harbor. We’ve set up this ‘free consultation’ relationship with them to help folks exactly like you.

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