What Can California Drought Teach Up About Today’s Stock Market?

Posted by on February 23, 2017 1:56 am
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Human beings are simple animals. They tend to take an existing environment and project it well into the future.

Just a year ago California was in a midst of a 5-6 year severe drought. Many global warming proponents at the time were screaming their heads off and forecasting that California will turn into a potato chip. Probably before a massive San Andrea’s quake sends it sliding into the Pacific.

Yet, the future is anything but linear. It is cyclical. This is California today.

Hit by worst floods in a century, San Jose got little warning of impending disaster

What does any of this have to do with the stock market? 

Everything. Over the last 5-6 years no one predicted that California’s drought issue would be fixed by a historic flood. Yet, that is exactly what is happening. When nature overextends itself in one direction, it often snaps back in a violent fashion to correct the mistake.

Reminds you of anything today?

We have been in a bull market for nearly 8 years. As our previous posts have shown, bullish sentiment today is sitting at record high levels. At the same time, no one is projecting even a correction, let alone a substantial decline. All of this is happening while valuation levels are at historic highs.

As investors we have to ask, is it possible that “Nature” snaps back?

If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here.