Five signs the correction is imminent


Stock prices are too high. If you aren’t sure why that is necessarily the case, here is my most recent attempt to explain. If you aren’t yet convinced, you should probably read my previous article before this one, because I won’t be wasting time today explaining the same things again. It isn’t that I’m absolutely opposed to repeating myself, so much as it is that time is short, and it is that—time, specifically how much time is left before stocks take a serious tumble—is what I’ll be focusing on today.

There are a number of possible brinks coming up before the end of the year, including the current earnings season, the US presidential election and its possible aftermath, and everyone’s favorite, the Federal rate decision in December. Oh, who am I kidding? I mean when the Fed raises interest rates in December. It is still important not to panic: I myself hold a combination of conservative long positions and out of the money puts. Even when facing the probability of a correction, wise and balanced action is almost always preferable to extreme, fear driven reactions.

Fear itself is a big part of the problem, and there’s more on that to come. When people are afraid, they tend to sell more quickly. That is why any typical market selloff could quickly turn into a market rout. If there were some way I could put people on guard against it without contributing to it I would. In the absence of that, well, read on…

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Julian Close

Julian Close

Julian Close became a stockbroker in 1995. In his 20 years of market experience, he has seen all market conditions and written about every aspect of investing. Julian has also written extensively on corporate best practices and even written reports for the United Nations. He graduated from Davidson College in 1993 and received a Master of Arts in Teaching from Mary Baldwin College in 2011. You can see closing trades for all Julian's long and short positions and track his long term performance via twitter: @JulianClose_MIC.

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