The S&P500 Index is interesting to look at right now. You can see the strain being had to keep it going higher. It's fighting against perpetually increasing resistance and a tightening spread.
Using both Stoch RSI and Bollinger Bands %B indicators, its worth noting that the Hourly, Daily and Weekly time scale all agree that the index is top heavy. Right now that's a literal statement, as a large percentage of the US stock market is being propped up by the valuation of a handful of large corporations. If the stock market were a game of musical chairs, the large corporations and banks own all the chairs and have them reserved for someone other than you.
S&P500 1-hour Increments
S&P500 1-Day Increments
S&P500 1-Week Increments
S&P500 1-Week Increments (Zoomed Out)
In a capitalist system, there needs to be a lean ratio between investors and producers. The more producers you have, the less the investors are eating away at the excess. If everyone is investing and nobody is producing, then a large portion of the new currency being printed is gobbled up to pay investors.
So far this year in the US there's been roughly $40K dollars per person added to the money supply, with $1200 of that going directly to each Citizen, and the rest going to large corporations, some of which have announced that they will be doing stock buy-backs again.
I don't know if the point has gotten across here or not, but it seems obvious to me what the problem is. Too many hands are skimming the profits, and the rest of the people are barely surviving on what's left. And so the rest of the people are forced to try and invest in high risk markets in the hope of skimming too. More and more hands are grabbing for investment profits, and few people are producing any profits to begin with. New currency diluting the money supply only creates the illusion that profits are being made, when in reality those skimming profits through investment are actually taking what little wealth is left from those trying to produce profits.
Not everyone can be an investor. In fact, the less investors there are and the more producers there are, the healthier the system is in the long run. If we're all investors, our profits are an illusion being maintained by central banks and their ability to dilute the money supply to infinity.
This is creating an explosion of poverty, that in turn is creating an atmosphere of fear, which in turn is causing many Americans to purchase guns and lose trust in one another. It didn't have to be this way, but over time as inheritance tax was removed and the wealthy kept getting wealthier and the middle class more and more became investors and the production was moved overseas, the US has become a game of musical chairs, except when the music finally stops the vast majority of Americans will find there are no chairs left to sit down on.
If Americans want to have profit again like the old days, they'll need to start producing it again. Of course, that's going to be hard to do when large corporations are snuffing out small businesses in obvious monopolies that government is paid to look away from.
Looking at the charts, it seems so clear to me what is going on. People think they're making a profit, but they're not. When the music stops, most are going to fall flat on their ass and their net worth will go poof. Its not a possibility anymore, its now inevitability.
Thanks for dropping by. Stay safe.