When valuations for the boring water company or the boring electric company are trading like your Facebook, Apple, Amazon or Netflix or Google (ie FANG) you know something is wrong.
This is when a seriously over valued market is screaming at you.
Of course the reader must understand in a world where money printing goes super nuts (Zimbabwe style) the stock market may go hyper-inflationary and picking a time frame for a top is never a good idea, but we are not there yet. There is no Ben Bernanke helicopter money to the masses yet (ie MMT).
To see when water company's (and such like) are nearing the crazy FANG like valuations a review of the Dow Jones Utility Index channel shows us how history can repeat. The chart below suggest the coming 2020 money boost from the central planners should keep stocks up until 2019/20. Must be an election year.
After the recent gold move the S&P 500 may end up 10% by Dec 2020, but in gold terms it may be flat or down, meaning gold moving higher and faster than the S&P 500. Of course, the S&P 500 moving higher while gold moves higher is good for gold stocks, on a relative strength basis.
The short story is: happy stock market days should continue into 2020. But watch out for a massive top in the Dow Jones Utility Index as history is likely to repeat as a bear market arrives.
Subject to either of:
1) US/Iran war pushing oil going to $100 and a world recession follows very quickly.
2) Super nuts money printing, Zimbabwe style and Dow Jones to $50,000
3) Deutsche bank blows up Lehman style.
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Cycle chart confirms channel forecast top.
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