A Few Signs That The Market’s About To Crash
CHARLEY BLAINE, BENZINGA
Let’s assume you think the stock market is about to stumble, and stumble badly.
How can you see the top coming?
Some argue the top is already staring everyone in the face. The Dow Jones industrials were up 21.15 percent for the year as of Thursday’s close, with the Standard & Poor’s 500 Index up 25.6 percent and the Nasdaq Composite Index up some 31.6%.
Since the 2009 market bottom, the Dow is up 143 percent, with the S&P 500 sporting a 165-percent gain. The Nasdaq, meanwhile, has jumped 213 percent.
But that doesn’t necessarily mean a top is near. In fact, the Dow produced gains every year from 1991 through 1999. The S&P 500 and Nasdaq were up eight of those nine years.
But by the end of that run, it was clear to a lot of people that trouble was brewing, thanks to what can only be described as insanity in tech stocks. The dot-com bubble sent the Nasdaq soaring nearly 86 percent in 1999 alone, and 571 percent between the end of 1994 and 1999. Anyone with even a hint of an idea could launch an IPO.
The aftermath, as we all know, was horrible. The Nasdaq peaked in March 2000 and then fell 78 percent over the next two years. It’s still more than 1,000 under its 2000 peak.