by Charles Hugh Smith
Of Two Minds
Parabolic moves end when the confidence that the parabolic move can’t end becomes the consensus.
The consensus seems to be that the stock market is on its way to much higher levels, and soon. The near-term targets for the S&P 500 (SPX, currently around 3,235) range from 3,500 to 4,000, with longer-term targets reaching “the sky’s the limit.”
The consensus reasoning goes like this:
— Central banks can print a lot more money
— Stocks rise when central banks print more money.
The history of the 2009-2019 era strongly supports this simple cause-effect, and so just about everyone is on the same side of the boat, the “don’t fight the Fed” side of ever-higher stock multiples and ever-higher prices.