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2 Macro Catalysts That Could Tame The Bull Market

Quoth the Raven profile picture
Quoth the Raven

Things have really been stacking up nicely for the bulls as of late. The past few years have yielded excellent results for investors that have chosen to buy and hold, and the bull market is now over three years strong and running. This article is to point out a "one-two punch" that could stop this bull dead in its tracks.

Once again, in the interest of disclosure, I'll admit up front that I've written a couple of articles on the bull run ending in the last couple of months.

On March 12, with the market sitting right around 14,500, I argued that for all intents and purposes, we were at the end of the bull market. Let the record show that I'm not necessarily wrong - yet -as the market has risen a little, but has been condensing steadily since then.

On April 16, I made the argument that the market is on the verge of panic. I still believe this to be true - the volatility and uncertainty during this latest two months has been bubbling under the surface so much so that it's palpable. I'll get into a bit more on the VIX later.

On July 25th, I contested that there has never been a better time to take your profitable positions from unrealized to realized than right now, a sentiment I'm sticking with right now.

Now, on August 7th, I'm noticing that we have a couple things coming down the pipe that this investor thinks could work together as catalysts to slow down, then reverse, the direction that the market is heading. Regardless of whether or not they do, it's important to know about both the Federal Reserve's plan, and the looming potential of a social media bubble.

Catalyst #1 - The Social Media Bubble

"The best

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Quoth the Raven profile picture
This page and all of its contributor content is operated by Quoth the Raven Research, LLC. Please read this disclaimer first and foremost: https://quoththeravenresearch.com/disclaimerterms-of-service/ Quoth the Raven is Christopher Irons from Philadelphia, PA. Commentary by QTR has been featured in Barron's, the Wall Street Journal, Financial Times, Yahoo Finance, Reuters, Bloomberg and many other financial outlets. QTR is a speaker at numerous financial conferences annually. QTR was named to Benzinga's "10 Financial Twitter Names to Follow in 2018" and in late 2017 was named to Forbes' "Top 100 Twitter Accounts for Finance". In 2016, QTR's work was selected as a finalist for the Sohn Investment Conference Idea Contest. In 2014, he was named to Seeking Alpha's Top List of Best Performing Financial Bloggers and was TipRanks' #6 Performing Financial Blogger (Out of 4,000+). View QTR's track record on TipRanks: https://www.tipranks.com/bloggers/quoth-the-raven View QTR's website: http://www.quoththeravenresearch.com View QTR's Twitter: https://twitter.com/QTRResearch Listen to the QTR podcast: http://quoththeraven.podbean.com All content contained herein is bound to both Seeking Alpha's terms of service, as well as the terms of service found here: https://quoththeravenresearch.com/disclaimerterms-of-service/

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Comments (11)

Add Amazon to the list.
I concur on social media bubble. At this point every tweak to ad placements to further increase revenues will be met with a mass exodus of users. LinkedIn is definitely overpriced and not as useful to the world as investors think. And Facebook is getting flooded with "sponsored" and the experience is becoming significantly degraded. A good place to head would be internet banking - Bank of Internet (BOFI) specifically. Huge potential. Disclosure: I have a position with BOFI.
D Dimond profile picture
I had the same thoughts, but I think media will pop in couple of years. There is other places to invest, just have to open your mind.
Morrison International Accounting profile picture
"been bubbling under the surface so much so that it's palpable." -your article

"Still alive... still breathing... still palpitating" -Berenice

Poe reference?
Great Swami profile picture
Yes, and you can add Tesla and Amazon to the list as well. But, just because a few companies or even an entire sector may be in a bubble at any given moment doesn't mean the whole market is.
While I do think the market is due for a correction I don't see anything other than what would be considered normal.

There is simply no catalyst for a 2008 like plunge.
satan2liberals profile picture
great swami:There is simply no catalyst for a 2008 like plunge.

S2L: Yeah right. You mean just like the 2008 plunge the Fed and most others didn't see it coming either? Hell BB couldn't even see it after it started and was pointed out by a Congressman.

Betting on the FED to produce a miracle ( considering their historical ineptitude) to extricate us from the causation of their making is a bit silly to me.
Valueplay98 profile picture
Typo - "Companies like Facebook and Yelp, both have relatively small short positions, both under 5% of their current float." I believe you meant another stock than Yelp.

Oh and forget earnings - it's the P/S metrics that are insane.

Zillow (Z) insiders have sold more stock in the last 2 years than revenue earned by the company ? (not earnings which they don't have - just revenue...)
Quoth the Raven profile picture
Yes, nice catch - YELP is at around 20% I think off the top of my head. I meant probably LNKD. Thanks for noticing.
Fear & Greed Trader profile picture
While the markets are ripe for a correction given the YTD gains, suggesting the 4 social media stocks are in a bubble and representative of the overall condition of this market is well -- absurd ..
Convoluted profile picture
But, where would the money go w/o social media stocks? Coal and steel? Pet rocks? Lava lamps?
I spent most of the day looking at LEAP put premium for the stocks listed above-and many more. There is so much opportunity that I'm drooling like a dog eyeing a bone-in ribeye. In fact, I'm thinking about creating an account just for put strategies. I've already collected on ISRG, GOOG and several more-but there's a lot more meat on the bone out there in la-la land. (But here's the trick: you gotta give the sheep room to graze and roam the pasture).

I agree on the PUT strategies, there is plenty of opportunity to profit from some of the high flyers that pay decent premiums on their options. I've found some good ideas from a site called aplustrades
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