FAST FIVE: The Goldilocks Warning

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The quote below is from two week's ago but is apropos again this week.

It is a “just right” economy which will allow corporate profits to grow at a strong enough rate for stocks to continue to rise at 8-10% per year.

Not only was such deterioration a hallmark of the market topping process in 2007, but also in 2000.

The problem of suggesting that we have once again evolved into a “Goldilocks economy” is that such an environment of slower growth is not conducive to supporting corporate profit growth at a level to justify high valuations.

Move trailing stop losses up to new levels.

Categories: ZH