NO ONE can possibly know the exact timeline of the "pop" or in what manner the "pop" occurs to this latest bubble creation. Its nothing to create a massive market bubble, so don't be deluded by the usual bubble rhetoric that ALWAYS occurs at the top of bubbles.
The "doom and gloom" rhetoric tends to be stifled by the louder boasts of the latest bubble riders and paid promoters of the casino. Public capitulation of the loudest bears becomes public fodder on many public financial sites as the final distribution of shares from the smart money to the dumb money transpires. The cries of a "further 8% move" become almost deafening. Why not jump on? Everyone now is predicting a long, lasting, "recovery". Even some of the previous loudest bears are saying we could see a rally into the latter half of this year as Europe and the U.S. recover. Ignoring now the previous macro rationale for their negative outlook, they have suddenly began crouding onto the "other side" of the boat. As the market reaches into RECORD Bull market timeline and RECORD Bull market numbers the bears begin to turn more BULLISH.
How MIGHT the resolution of this bubble occur? Bernanke is gone and a new Chairman is arriving. One only needs to go back a few decades to see what the scenario MIGHT be by examining what happened as the last two exchanges of the baton looked like. Historically when Greenspan took over from Volker after a similar 5 year bull run a sudden and violent two day crash occurred just a few months after his tenure began. The 2007-2009 Great Recession and market crash occurred shortly after Bernanke took over from Greenspan. So you see there is NO implied "grace period" for the newly arriving Fed Chairman. In fact if one is looking at a market bubble AND a newly arriving Fed Chairman then one should be wary of playing in the great casino at least based on past performances. But of course the temptation is very strong. How can one ignore the money being made recently. How can one ignore the gains made in high flying stocks like Twitter, Amazon, Chipotle, Starbucks....etc.......?? Its intoxicating. The allure is overwhelming. How can you resist? All you had to do was just buy the dips and hold on for a few weeks and you could have traded them for tidy profits.....OR better yet you bought the dips and held them for gains 200%. One cannot resist those type potential gains. Worse yet......IF you missed them, you feel the need now to CATCH UP. You know what I mean......YOU'RE GETTING LAPPED.
Those unending voices beckoning you to the game. Telling you that if you're worried we're near a top then JUST use protection. You can be cautious. Buy puts, sell calls.....just keep your stops close.....you know what to do, its easy......"look at me, I'm not that smart and I made a ton". Those are the voices at the top of a market top and NOT the beginning of a bull market.
In 1987 during a relatively prosperous economic boom in this country, one day after a particularly ugly correction the prior day in the market, we experienced a massive sell off in one day of 22.6% and this was even with the market shutting trading down intraday. To this day there is absolutely NO explanation WHY this sell off/crash occurred. Theories abound, but strangely NO ONE ever established a sound explanation, after multiple forensic analysis just how and why it actually occurred.
In 2000 the voices once again shouted to the moon how high the Nazdaq could go. Once price targets were hit on on high fliers like Cisco Systems, WorldCom, etc. they would trot out the same analysts and a higher target price would be established. Seldom did you hear mention "take your profit and run". They always had an explanation for a "higher" target price. Even the phrase "its different this time" popped up. Well it wasn't and once again they flushed the "dumb money". It wasn't the end of the world either. It was just another pump and dump at the casino. The World's economic health was stronger those previous dumps with less worldwide debt and certainly they didn't have 1.5 Quadrillion in derivatives hanging over the game. Maybe the doomers will have their day with the JIT delivery systems and the fragility of the interconnected World economies straining to maintain their social/political balances, but there is one thing certain.......its not "different this time" in the great casino. They suck the dumb money in during distribution and then short market into oblivion and soak up the shares at a big discount to run the whole game over again. gl