6 Unscientific Ways to Tell the Market is at the Top

It’s safe to say that many investors have lost money trying to predict the turn of a market, or vice versa; believing in the bull as it drops 25%. Once the aftermath is over, it always seems like the warning signs were glaring in front of our eyes the whole time, and you ask yourself why you didn’t get out in time. We’re not big on giving our two cents about what’s happening in the stock market world. It’s just not us. But instead of telling you what is, or what isn’t, we figured we’d show you some indicators that could potentially be warning signs and let you decide for yourself. So here are the “6 could be warning signs,” that the market is at the top.

1. All Time Highs

The most obvious, is of course, the market is literally… at the top. The S&P 500 and DJIA just hit new intra day all time highs, while the Russell and Nasdaq have taken a beating the past month. Which is the true indicator? Is this just the correction phase for the Russell and Nasdaq while the S&P continues to climb, or is the S&P going to eventually follow the path of the smaller indices?  We’ve learned that just because something is at an all time high doesn’t necessarily mean it’s going to turn around. Cast in point, the stock market the past couple of months. But where does the run stop?

2. New Record for Most Expensive Home

Is your home an investment or not? It’s been a hot debate on the blogs the past couple of weeks… but the extremely wealthy sure think so. Over the past couple of months, three homes have sold in the U.S. for more than $100 Million (which is a new record by the way). We discussed earlier how the housing market is only doing well for top-tier sales, compared to the rest of the market. Case in point, this home below set the world record for most expensive home sale at $147 Million. This isn’t to say that all expensive homes are selling, Billionaire Steve Cohan can’t seem to sell his four-bedroom pad in Manhattan.

Home Sale

3. Alibaba IPO

The tech IPO announcements continue, despite recent struggles, and this one could be the biggest of them all. For those of you who haven’t heard, Alibaba is the world version of Amazon, except Alibaba is much, much bigger via Forbes; setting the stage for what could be the largest IPO offering in history.

“Though it is often compared to Amazon, the company has either full or partial ownership of businesses that compare favorably to U.S. businesses like Ebay, PayPal, Twitter and Hulu. In 2013, Ailbaba processed 11.3 billion orders worth $248 billion, well ahead of Amazon and Ebay combined, with its sales accounting for 84% of China’s online shopping.”

But it’s not just the IPO news that’s catching people’s attention. Back when people didn’t know the name Alibaba, Yahoo! bought up a portion of the company, and currently owns 24%. It’s the latest strategy of which company owns the next for leverage. It’s appears that everyone’s trying to get their money’s worth while the goings good before it’s over. Is Yahoo! going to cash out before they think the bubble bursts?

Alibaba

4.  Apple, Beats, and Dr. Dre (First Rap Billionaire?)

Speaking of large purchases, just last week, Apple decided to follow in line with other large purchases of other tech companies by purchasing Dr. Dre’s iconic headphones “Beats,” for more than $3 Billion. This deal may or may not create the world’s first rap billionaire (depending on Dre’s stake in the company). Either way, we congratulate Dre’s success on cashing in on the tech bubble while he can. Add this to Facebook buying Whatsapp, Yahoo! buying Tumblr, and so on.

Beats

5. Animated Candies Take Over Wall St. 

King Digital Entertainment, The company  behind the game “Candy Crush” went public earlier this year, and is now down almost 14% since it’s IPO date. We’ll leave the commentary for this example to someone else.

“Remember this moment boys, for as long as you live, for it is the exact moment in time when Wall St said “enough is enough.” The moment animated candies stepped onto the NYSE to mingle with the cynical alcoholics on the floor, all hope for extending the bubble died.

This is the tipping point in stock market history. It must be documented here– for the children– so that future generations learn from our mishaps.”

King Candy Crush

 

6. Four Seasons Around the World Tour

This one is a little bit out there, but we couldn’t resist.

Do you have $119,000 lying around that you want to spend on a vacation? Perfect! Jump aboard a one month, 9 city private tour around the world on a Four Seasons private jet.  Just imagine the endless possibilities of what you could use the money for? Maybe, help fund a start up company?

Four SeasonsSo what do you think? Are these all examples of the recovered economy? Is it the direct effect of people/companies having more free cash to spend? Or are these the warning signs that the pundits say we should have noticed in a couple of months?

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Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

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