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Warning Signs: Hindenburg Omen, Buffet Indicator, Shiller’s CAPE Ratio

Buffet Indicator
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EDITOR NOTE: The Hindenburg Omen correctly sounded the warning bells in 2008, just prior to the market crash. In 2021, it is setting off the alarm again. The Fed’s fancy QE footwork has avoided a market correction since 2008, but that streak may be quickly coming to an end. IN addition to the Hindenburg Omen, the Shiller CAPE ratio and the Buffet Indicator are also showing that a market disaster is on the way. The Fed will (of course) keep printing money and pumping it into the economy to keep the markets inflated, but the best and most accurate indicators are finally showing that even the Fed’s best efforts to keep Wall Street from having to pay the piper can’t work forever.

The famous Hindenburg Omen, the technical indicator that predicted the 2008 correction in the stock market, has just flashed “ALARM” again.

Buffet Indicator

To be sure, there hasn’t been a major correction in the stock market since the financial crisis, primarily because The Federal Reserve has constantly goosed the markets since late 2008.

Just as the Shiller CAPE ratio is signalling ALARM!

Buffet Indicator

As is the Buffet Indicator.

Buffet Indicator

I have no doubts that the Fed will withdraw its monstrous stimulus from the market after the Jackson Hole Fed conference. … NOT!!!!

Maverick Capital posted this nugget today showing The Buffet Indicator (US equity market cap/GDP) and US Corporate Profits / GDP. All I can say is “simply unsustainable.”

Original post from Confounded Interest

All articles are provided as a third party analysis and do not necessarily reflect the explicit views of GSI Exchange and should not be construed as financial advice.

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