Almost every day, the U.S. markets hit new all time highs. With rampant unemployment, low jobs growth and an ugly global economy, many are wondering if we are in the midst of a new stock market bubble. Below are the top 5 reasons why you know another stock market bubble is forming.
5. Earnings have been poor at best with many large Fortune 500 companies like International Business Machines Corp. (NYSE:IBM) missing horrible. The market continues to make new all time highs.
4. Volume is almost non existent on every move up. Today, we have done 34 million on the SPDR S&P 500 ETF Trust (NYSEARCA:SPY). This tells us institutions are far from being buyers.
3. Mutual fund inflows have surged dramatically 2013. This tells us the little, average investor is finally feeling safe enough to buy into the market again. As we all know, when all the average investors pile in, the end is near and a big drop is just ahead.
2. The Federal Reserve has printed close to $4 trillion Dollars out of thin air in the last few years. The Federal Reserve has also created every bubble in recent history. Printing this much money keeps yields artificially low. Keeping yields at record lows forces money to chase better returns. Thus money rushes into stocks creating a bubble.
1. Mila Kunis and other celebrities have endorsed stocks and started investing. If you ever needed a bubble signal in the markets, this is it.