The Huge Stock Market Bubble Just Popped and the Fed Can’t Rescue It ~ January 27, 2022

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ARK Innovation ETF chart courtesy of StockCharts.Com, Annotated by Mish

Liquidity has dried up and the most speculative issues have taken the biggest hit.

ARK Innovation ETF weekly chart courtesy of StockCharts.Com, Annotated by Mish

There is technical support for ARK in the low 30s. And that’s where I think it’s headed, but with no time frame in mind. 

If you want a different view, Wood says “Disruptive innovation is often not priced correctly by traditional investment strategies because people may not understand how big the ultimate opportunities are going to be. They aren’t sizing the opportunity and they aren’t analyzing the disruption.”

She sounds remarkably like the roaring 2000s “Gorilla Game” wisdom that implied “You can never pay too much for a gorilla.”

Investment gurus come and go in every stock market cycle. Most look like geniuses until suddenly they don’t. 

“The wealth is lost on the way up” by investing in bubbles.

Second Consecutive Wild Ride in the Stock Markets, This Time Closing Lower

In case you missed it, please consider my post on January 25, Second Consecutive Wild Ride in the Stock Markets, This Time Closing Lower

Many people think the Fed will keep hiking until it breaks something.

I have news. The markets and the economy are already broken by the Fed’s policy errors.

For discussion of how bad inflation really is, please see Home Prices Jump Another Percent, Fed Extremely Behind the Inflation Curve

Home prices rise another percent according to Case-Shiller. The Fed does not even count that as inflation.

The seeds of decline were sown in bubbles already blown. And it’s not just the stock market. It’s also junk bonds, housing, and cryptocurrencies.

It’s far too late for the Fed to prevent another deflationary asset bubble collapse.

This post originally appeared at MishTalk.Com

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By Mish

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By cindyloucbp

Cynthia is the typical Pisces! Her left brain activities include scientific activities in the hospital laboratory as a director. Her right-brain activites show as a painter, photographer and musician. She is known as the scientist who sings!

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