Disclaimer: The following is our opinion and is not financial advice.
After six months of churning US markets have been making new highs time again over the last two weeks. While this was anticipated on the long term monthly chart that we mentioned a few weeks back, it has been happening during a time of increasingly worrying fundamentals that simply cannot be ignored.
Massive divergence is forming. As we indicated last week, most emerging markets are at or near a bear market with the notable exception being the USA.
While all might be AWESOME in the US, emerging markets continue to show signs of major strain. Besides Venezuela, we are seeing major signs of stress in Argentina
... and Turkey.
Italy's bonds too are tumbling back to May crisis lows.
https://www.zerohedge.com/news/2018-08-30/italian-bonds-are-tumbling
South Africa is creating a lot of social stress among land owners and government supporters and the markets are reacting badly.
Let us not forget Brazil.
The auto industry is rapidly approaching another point of crisis. Of course we've been warning about this for a long while now...
Russia is warning of yet another FALSE FLAG attack in Syria which will be used to justify attacking Syria's Assad. It's important to note that ISIS and Al Quaeda have used chemical weapons DOZENS of times over the years in both Syria and Iraq with little/no media coverage. When Assad is on the edge of victory yet again, the Western narrative is that he decides to used chemical weapons - with zero evidence to support these claims other than intelligence agencies saying "trust us".
There are continued signs that BITCOIN may have found a bottom and is preparing it's next major move higher. I'll put it to you like this. Do you have more faith in an EMERGING TECHNOLOGY that is independent of central banks with real utility OR do you believe in the current fiat monetary system that is backed by NOTHING except TRILLIONS of unpayable debt and "faith". From our vantage point, dollars (or whatever fiat currency you use) are on borrowed time courtesy of your local central bank.
It is a fact that there is now more credit risk in the markets than before 2008. There are now REAL SIGNS that the next global economic collapse is forming. While it is not to late to prepare, time is quickly running out. There are still opportunities for you to diversify into physical precious metals (do not invest in a fund - get it in your HANDS) or crypto currencies. Other hard assets that retain value are also good investments. We can't understate the ability to defend yourself as well. The next financial crisis is going to bring out the worst in people.
While the market continues to make new highs, we just can't get behind this bull market at this time. There are more signs than ever that the top is in. The downside risk is... well SYSTEMIC. When the next recession hits, it's not just BANKS that will fail... GOVERNMENTS will fail.
Act accordingly,
The Market Vigilante
