MELT UP UNDERWAY!

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DJIA 20,611     S & P 500  2,349    NASDAQ 5,819    Gold $1,233

A stock market “Melt-Up” is well underway. In my nearly 33 years in and around Wall Street, I’ve seen this twice; summer of 1987, and the end of the last millennium. Both times, I was ridiculed for suggesting to run, not walk to the exits. Despite leaving the prognostication racket for a living  over 3 years ago, I’ve again received similar emails calling my most recent stock market observations descriptions I can’t repeat here.

I’m reminded of two things about melt-ups:

1 – Like a hot crap table, where everyone is making money like crazy during a roll, the belief the dice can no longer combined to show 7 goes from fantasy to believable (only to inevitably hear the man shout – “Seven-Out”).

2 – Don’t short into the melt-ups because the market can remain illogical far longer than you or I can remain solvent.

As in 1987 and 2000, so few will lock in the profits during the melt-up while most will see much, if not all, paper profits go up in smoke.

My old friend Dennis Gartman said this week, “the melt-up has begun in earnest as illogic reigns; and it will stop when it stops and not a moment before.”

I remain most comfortable in my foxhole with my gold, copper and zinc exposure, plus some relic call cash!

  • This may be the most profound development since I first entered Wall Street back in 1984. Computers and trading algorithms are taking over Wall Street. If you don’t appreciate the ramifications of what’s pointed out in this article, perhaps a scene from an extremely popular movie when it came out decades ago, just may tell you the unhappy ending to what the article speaks about.
  • Take stock in what Stockman has to say.

I continue to believe that America has already entered its worst ever social and political era. One need not get past daily news events to see it as light as day: