The market has been performing quite well over the last decade since the crash in 2008. Many investors are becoming complacent and believe that since the market continues to spiral upward, it will continue on this path.
What doesn’t add up, though, is that more US investors, international investors, and financial institutions are selling, not buying.
A downward trend in buy orders, yet the market continues to ascend?
Wall Street insiders like to keep secrets from the general public – this is how they make their money – and a massive secret will soon take its toll on the US stock market.
Along with the US, international, and financial institutional ‘sellers’ I mentioned, is another group that nobody really knows or talks about—the exclusive buyers.
This exclusive group of buyers has been pumping in not millions or even billions, but trillions of dollars into the market. The market was supposed to fallback in 2014, but never did; this can be attributed to the artificial market manipulation being fueled by these exclusive buyers.
The market is long overdue for a healthy correction, but this artificial sense being created has allowed for the DOW to surge to 24,000.
And it makes sense—less shares in the open market, demand for a stock (artificially) goes up, which then boosts share price, and ultimately earnings-per-share.
The culprit is 'Big Companies' using a tactic known as stock buybacks. Companies like Apple, IBM, and Exxon Mobil buy shares of their own stock to inflate the price. The money isn’t going toward research and development efforts, new hires, or equipment and services.
Rather the money is being flushed back into buying more shares creating a never-ending loop, which isn’t going to end well for the average investor who owns shares of these companies.
This tactic is very deceptive and gives a false sense of company growth, when in reality the share price is being artificially pumped into a blighted bubble about to burst.
What's even worse is that much of this pumping going on is being funded by debt. This is simply going to compound the issue further, which will make this bubble burst quite unexpectedly for the complacent investors.
Everything is pointing toward a market correction: interest rates have already been lowered, debts are at all time highs, and Congress has passed historic tax cuts.
It seems as though we are already out of ammunition; there is only one way this can go.