Top 40 is heading for a crash setup
Doubt it. Market already quite oversold and recent profit-taking hasn't even hit the 50% retracement level of last week's move. Medium term momentum is going into positive territory. So not exactly boom or bust, better to sit on interest-earning liquid bonds for now.
But watch Nassim Taleb on youtube about how the system is more fragile now than in 2007 going into GFC. Couldn't agree with him more. All that QE has found its way into the market. Household debt has become corporate and government debt now, and interest rates are starting to push up fast around the world. No nation in history has even been able to handle an excessive debt bubble and the US is not immune, even though they have the world's reserve currency. The GFC led to an excessive widening between rich and poor as the rich milked the system on easy money. Expect a levelling pretty soon with property (especially high-end) coming in for some of the earliest and biggest knocks. Then the markets will of course bleed. What we've seen so far is just early jitters from the professional community. But the dumb money and tracker funds have all kept investing, keeping a bottom under the market.
The global crash is coming although it's impossible to tell when. Meanwhile, best to keep watching momentum for those early signals....
