Time Stamp References:0:58 - Svens background.3:30 - Svens better half.4:22 - Marketcap to GDP9:40 - Dangers to retail investors.12:50 - XVG index for relative performance.16:20 - VIX direction from here.20:00 - Is the Fed out of ammo?23:50 - Downside risk in the markets.26:55 - Can they correct wealth inequality.29:50 - Seasonal Fall risks32:05 - Outlook for the dollar.34:20 - Gold expectations.36:50 - Short-term expectations and politics.
Tom welcomes a new guest to Palisade, Sven Henrich. Sven is the founder and lead market strategist for NorthmanTrader. Sven outlines his corporate background and what led him to become interested in chart technicals, macro market picture, and trading. He has developed a reputation for being highly critical of central banks.
Sven discusses past market cap to GDP valuations. During the tech bubble, it reached 150%, and at the peak of the housing bubble 135%. Afterward, the ratio collapsed to 75% and 50% respectively. We have entered a new era of permanent central bank intervention with the advent of QE "emergency measures." Today, market participants understand that central banks will print more whenever the markets begin to correct. In February, the market cap to GDP reached 154%, and now after trillions in additional intervention, we are at the blow-off level of 185%. The highest market valuations in our lifetimes.
He discusses the indicators for XVG stock weighting and the VIX. The VIX may be revealing a risky period through October and November, and it's possible markets have topped out for now.
Sven says, "There is not a central banker on the planet that will say enough is enough.. none of them are willing to admit the risks they are creating." There are massive demographic problems today that have no solution.
The dollar has had a breakout, but it appears to be nearing a pivot point. He is currently neutral on gold, awaiting signals from either it or the dollar.