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How to Know a Bubble Is About to Go Bust

Graham Summers

Posted April 21, 2021

Graham Summers

Yesterday I explained why you should BUY stocks, instead of selling them, when the markets start bubbling.

By quick way of review the key point were as follows:

  1. Asset bubbles can take months if not years to burst.
  1. In the case of the Tech Bubble, stocks exploded higher for TWO YEARS before the bubble burst.
  1. In the case of the Housing Bubble, stocks exploded higher for a solid 12-14 months before the bubble burst.
  1. Selling at the first signs of froth means missing out on potentially massive gains. It also means sitting on the sidelines while everyone around you gets rich for months on end.

Again, when stocks start to bubble, you want to BUY and ride the bubble for as long as possible. However, it’s absolutely critical to get OUT of the market once the bubble bursts.

To do that, I like to use my Bear Market Signal.

If you’re unfamiliar with the Bear Market Signal, it has caught every major bear market in the last 20-plus years.

I’ve identified the previous signals on the chart below. Using this signal you’d have avoided 90% of the carnage during the Tech Bust and the Great Financial Crisis of 2008.

Chart

We came darn close to triggering this signal during the COVID-19 meltdown, but managed to barely avoid it when stocks closed up in April 2020. Had April been a down month we would have had a confirmed signal.

How does this signal work? And is it close to triggering a new signal?

To explain all that, I’ve written a special report called BEAR MARKET SIGNAL: The Secret Signal That Has Called Every Crisis in the Last 20 Years. It reveals a specific combination of technical indicators — a combination I’ve spent years developing and testing — that will tell you when the market is poised to tank.

I wrote it exclusively for my Strategic Impact subscribers. But I’d like to offer you access to it as well.

Check out my presentation on the forces that are currently driving this bubble in the market. And if you take me up on a trial subscription to Strategic Impact, you can get immediate access to that (unadvertised) special report as well.

Best Regards,

Graham Summers
Editor, Money & Crisis

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