Signs Of A Market Top

Jesse Felder has written an outstanding article on signs that we are at a stock market top.  I agree with Jesse that we are near a market top, but no one knows when stocks will fall.  It could be next month, next year, 2016, or later.  It pays to be looking for the exit doors, though, so that you can get out with most of your money.

One point Jesse made involved a Federal Reserve chart comparing the GDP and ownership in equities.  We are greatly overbought on stocks compared to the gross domestic product, and this usually means a market top.  Another point the author made was that we have fewer than normal stocks above their 200 day average lines, and there is also a downtrend in this respect.  So, the market is being held up by a minority of big cap stocks, and this scenario cannot continue indefinitely.  We need to be careful about holding stocks nowadays, and we need to have a good exit plan.