A permanently high plateau of stock prices is a marvelous innovation.
Somebody said this before, of course, but one glance at a chart of the S&P 500 tells us that stock prices have reached what looks like a permanently high plateau. How can we identify a permanently high plateau? One sign is price never touches the 50-week moving average (MA), much less the 200-week MA: prices just keep marching higher in a volatility-free permanently rising plateau.
It’s almost like a film set, where the special effects department (i.e. the Financial Singularity) has been called in to get rid of pesky volatility and fluctuations.
Memo to Head Office: Done. The MACD indicator has been locked into a permanently high plateau as price marches higher in an orderly fashion.
A permanently high plateau of stock prices is a marvelous innovation: you can practically set your watch to the steady tick of new all-time highs, and all you need to plan your retirement or cash-out of your stock options is a ruler and a pencil–just extend the price line as far forward as you want, and calculate your wealth.
The only downside of this permanently high plateau of stock prices is that it eliminates the need for the financial punditry and the workforce of money managers. With bearish influences and volatility both eradicated, there is nothing left to talk about except the upward slope of the permanent plateau.
This post was published at Charles Hugh Smith on SATURDAY, SEPTEMBER 06, 2014.