Over the last few weeks, there have been an inordinate number of articles concerning the high probability of a stock market crash.
One theory is that the super-sized year-to-date gains of the Dow coupled with the summertime interest rate spike is analogous to what transpired prior to Black Monday on October 19, 1987.
Another premise for a miserable September regards the fact that price-to-earnings (P/E) ratios are growing faster than at any time since the dot-come bubble burst in March of 2000.
Last, but hardly least, margin debt is at its highest level since the 2007-2008 financial meltdown.
Of course, why should commentators stop at these comparisons? Our country’s M2 Money Supply as measured by currency in circulation as well as short-term deposits at banks appears to be slowing in the same manner as it did prior to the “October 1929 Crash.” What’s more, the S&P 500 SPDR Trust (SPY) is hanging around its 50-day moving average; the infamous “Flash Crash” in May of 2010 happened just as SPY had failed to maintain support at its 50-day trendline.