The Stealth Bear Market That Could Take Markets By Surprise

The Stealth Bear Market That Could Take Markets By Surprise

Article Summary

  • China’s stock market correction might only be the first sign that a global recession is coming.
  • Stock valuations are 28% above historical averages while economic growth is stagnating which could trigger a major correction.
  • A Fed rate hike would be a disaster for stocks and another round of QE could be in order.
  • Margin levels are at dangerous new highs and broad based buying could mean an unsustainable atmosphere without new cash flow to support it.

Investors have been on a bit of a rollercoaster ride the past several days as the markets dipped down and back up by hundreds of points. Volatility rocketed up with the VIX ending Thursday the 20th at 19.14 and reaching a staggering high of 53.29 intraday on Monday the 24th – an increase of more than 178% in less than two trading days…

 

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