The stock market now faces subprime mortgage related losses in banks as banks declare their earnings – but the bubbly market will complete its last upward wave
Karen Zuba
Jul. 14, 2007

The stock market is in a spiky mood. It is ready to make some real fireworks before going deep into a multi-decade bear market. Next week some investors are nervous. The banks are coming out with earnings and that will have strain of the subprime loans.

The bank earnings will be lower that the market expects. But the stock market will keep rising fast, ignoring the fundamentals. This is called a top formation before a major drop. In August 1987, March 2000, the market showed similar signs.

Overlooking the fundamentals is the ‘must’ sign for the bubble. The bubble surrounds M&A activities, terrible fundamentals, and poor sentiment. The bear market can be vicious after the bubble is gone. It will be similar to the dot com bubble and the recent real estate bubble.

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The stock market now faces subprime mortgage related losses in banks as banks declare their earnings – but the bubbly market will complete its last upward wave
Karen Zuba
The stock market is in a spiky mood. It is ready to make some real fireworks before going deep into a multi-decade bear market.
READ MORE>>

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