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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
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...If the dots don't connect, gather more dots until they do...




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Tuesday, October 16, 2012

The Ever-Growing Technology Bubble...You've Been Warned!

Once again, another bubble grows as the spread between the NDX and S&P 500 and also between these Indices and their respective Volatility Indices continues to widen, bringing with it unresolved volatility repercussions, as shown on the 20-Year Daily percentage comparison chart below. The last two bubbles didn't end well for both Indices, as their collapses were swift and deep, cannibalizing virtually all of the gains that were made within both bubbles.

Technology has risen from the 2009 lows more, in percentage-terms, and faster, than it did from the last bubble lows to highs, thanks to the non-stop money-printing programs that have been enacted by the Fed since 2009. However, the Fed, alone, cannot save a potential collapse of the current bubble, particularly within the confines of the challenges facing the current slowing global economic environment, along with growing domestic and international political/fiscal discord, which were not factors prior to the last bubble collapse.

You've been warned...please don't shoot the messenger!