Serious threat to the bull market

Serious threat to the bull market 

Nothing good lasts forever, including the amazing bull, investors have enjoyed this year. 

Low interest rates, solid corporate earnings and the Fed said it would jump start the economy at all costs, driven by the stock market has broken record after record as their high surge. Since January 1, the Dow Jones industrial average has risen more than 1,800 points - the continuous influx of money market. 

However, I noticed that five specific clues point to this market is very optimistic about the end of the cycle. 

1. Headline risk 

When you begin to see how the media boasting great stock market performance and how everyone involved, it's time to be cautious. 

Last weekend, I met a bearish signal from two distinct places: Wall Street Journal article entitled "Mother popular Run with the Bulls" and the taxi driver who gave me stock tips. 

Along Fifth Avenue in midtown Manhattan, the taxi driver heard me on the phone stock, and offers his favorite companies - even some trading skills. 

It is amazing how everyone thinks they know the market and trade. It said that on Wall Street, and once you hear the shoe shiner, haircuts and taxi drivers talk about the market, this is a clear signal that the bullish trend is ending. 

No one knows for sure, but I'm sure there are a few former hedge fund manager, the New York City taxi driver, so maybe my taxi driver picking a fund managed $ 100 million short last year. Who knows? 

In the stock market, when I see this type of behavior, it gave me flashbacks "Black Monday" crash in 1987, when the writing is on the wall late summer. At the close, the Dow Jones Industrial Average fell 22.61 percent, in one day - the biggest decline in its history. 

2. Global uncertainty 

Seems to have generated another crisis in the euro zone every day. 

First, it is one of Iceland's financial crisis, the Spanish bailout, then the debt problems of Greece extremes. Cyprus is now actually seize bank accounts to pay its debt, as I mentioned before. 

Although we may feel insulated in the United States, the global financial system is interconnected to a surprising degree. What is the next step in the euro area? Italian or larger countries will reach out to help you? 

It is possible that the United States will eventually be asked to step into the fray to help. This is a very real concern, and can the stock market a heavy burden, even started rumors. In addition, from North Korea's increasingly tense, it may soon stock market pressure. 

3. Higher interest rates 

Although the U.S. Federal Reserve Chairman Ben Bernanke assured investors that he would not consider raising interest rates until the unemployment rate from the current 7.6% to 6.5% - is not expected to occur until 2015 - nonfarm employment growth or inflation jump may trigger an increase. 

In addition, the Fed may begin to cut its massive bond purchases this summer, if the economy continues to pick up steam. Very optimistic about the Fed's purchase of one billion U.S. dollars 85 a month Treasuries and mortgage-backed securities is to promote the impact of lower interest rates and encourage businesses to hire. 

San Francisco Federal Reserve Bank President John Williams expressed optimism in the plan. 

"I hope that this summer the prospect of entering the labor market improved significantly, we will meet the test if this happens, then we can begin to gradually reduce our procurement," Williams said. If this happens, then this will have a bull dire consequences. 

4. Too many adventures 

Risk-taking is an explosion in the market today. 

Keep in mind that excessive risk is what led to the 2008 financial crisis, it could easily happen again. More than $ 15 billion U.S. dollars of junk bond debt has been issued in the first quarter. If you turn out the bond market bubble burst warnings are accurate, then the high-yield bond investors may suffer huge losses. 

5. Another real estate bubble 

Housing market has started to rebound since the end of 2012 and has since bottoming natural expansion. In addition, the Fed's low interest rate policy has a great help growth. 

However, reports from Washington said the Obama administration to encourage bank lending risk by directing borrowers to grow further. 

Yes, that in the end is what causes the collapse of the housing bubble, it will repeat again should the consumer debt burden becomes unmanageable. Add to this fear is the fourth quarter of 2012, household debt increased by 6.4% - since 2007, the largest increase. 

To consider the risks: Although these five points is a bullish signal may be flat, no one knows when or if a certain callback will actually occur, and there's no telling how it could be sharp. 

Take action - although they are still a great investment, which is a very good market reached a new high, the economy began to show during the months before the financial crisis to see similar signs of caution.