How long do you think this stock market bubble can last?

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It’s been a steady drip lower in the market action all day and the path of least resistance seems to be pulling us lower.

I remain heavier in cash and with more puts/short hedges than I was a few months ago. Ebb and flow with the market.

The question for everybody now is — how long will this stock market bubble last? That is not how investing in the stock market is supposed to work, but our Republican/Democrat Regime has bet the nation on ever higher stock prices and ever higher corporate earnings. It can go much higher and get much crazier before the bubble pops. But it’ll be ugly and tough to get out when it does. We need to stay vigilant in our strategies. The Great Stock Market Bubble that we’ve been set up for is here.

See: Thinking it through — the case for a bull market Sept. 1, 2009 | By Cody Willard

A couple ideas on how to trade the Money Supply Bubble Nov. 5, 2009 | By Cody Willard

Are Apple and Google in a bubble? The answer will surprise you Oct. 28, 2010 | By Cody Willard

Get ready for the new tech bubble, the biggest bubble of all time (UPDATED) April 7, 2024 | By Cody Willard

The great inflating bubble June 14, 2024 | By Cody Willard

My feet-to-fire analysis for the way this economic and stock market cycle will play out (note that sometimes the stock market can boom in bad economic times and vice versa for years on end though) is this –

We get into late 2014 and the S&P 500 spikes 10% in a single quarter (sound familiar?) to over 2000 (up 30% from current levels) and the DJIA does the same to get over 17,000. Corporate profits and profit margins and cash flows and cash levels will all be at yet new all-time highs. And then somewhere in late 2014/2015, we start to face some of these end-games from the ongoing bailout/fraud/confiscation schemes that the powers-that-be keep forcing down our throats in the name of “saving your economy”. The markets go through a huge panic and meltdown, the banking system and the status quo government that it owns get booted, laws get enforced, crackdowns on state and federal corruption (including heretofore seemingly acceptable corruption like the revolving door and regulator capture and even much of what today passes for “lobbying”).

Somewhere in 2018 confidence starts to return to the system and the S&P 500 starts a new long-term bull market from the about 800 or so (60% off its 2014 high).

In the meantime, we have the fortunate setup of having been way early to calling for this ongoing stock market bubble.

And our strategy of buying the panics and then selling euphoric spikes has worked very well over all. I don’t think it’s time to make any big changes to the strategy here, as I expect this stock market bubble to get bigger yet before blowing up. I’m just letting this near-term action play itself out a little bit and expecting another short-term cycle of panicky action to return to the markets.

My long-term subscribers have seen me pound the table and wildly bullish in times past. Some as noted above in those links. This is not one of those times.

I’d like to know if you agree that we are now in a new stock market bubble and if so, how long you think this stock market bubble can last? Please comment below or send me an email to [email protected].

Cody Willard writes Revolution Investing for MarketWatch and posts the trades from his personal account at TradingWithCody.com, which is not affiliated with MarketWatch. At the time of publication, Cody was net long Google and Apple. Follow Cody on Twitter @codywillard.

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Cody Willard

Founder, CEO & Chairman at Wall Street All-Stars, LLC

Cody Willard is the founder of Wall Street All-Stars and the principal of CL Willard Capital. Cody serves as an adjunct professor at Seton Hall University and writes TradingWithCody.com. He was an anchor on the Fox Business Network, where he was the co-host of the long-time #1-rated show on the network, Fox Business Happy Hour. He wrote a monthly investment column for The Financial Times as well as columns for TheStreet.com and was a regular guest on CNBC’s Kudlow & Company from 2004 to 2006. Cody’s stock picking ideas and economic outlooks have been featured on NBC’s The Tonight Show with Jay Leno, ABC’s 20/20, CBS Evening News, CNBC’s SquawkBox, Jon Stewart’s The Daily Show, as well as in the Financial Times, Wall Street Journal, New York Times, and many other outlets.

@codywillard

Former Anchor on Fox Business, ex-hedge fund manager, editor of http://TradingWithCody.com, member of the The Muddy Souls (http://youtube.com/themuddysouls).

Wrong. Those who lobby the R/D Regime best will. “@redgehomes: @codywillard whoever builds the electric tank will dominate defense industry” - 31 mins ago

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