September through October is crash season for the stock market just like July through early autumn is hurricane season. Some years there are no hurricanes. In all but a few years there is no Stock Market crash. Generally there is a little market weakness in the fall but nothing dramatic.
The stock market is way overvalued. Few dispute that. The economy is falling apart right before our eyes. So, doesn’t it make sense that the market would crash in the fall? It makes so much sense that big money is hedged up to its eyeballs. It makes perfect sense except that stock prices are being aggressively managed. Despite years of organized intervention in the stock market, all but a few still subscribe to the dogma relevant to a market that is governed buy supply and demand.
Plans are in force to prevent any serious fall weakness. Traders are lined up on the starting line just waiting for the starting gun to go off. This mind set is easily exploited. I am keeping my powder dry and staying in cash. Having cash on hand when the eventual collapse comes is much more important to me than trying to make a killing on one or two disastrous days.
There will be no limits on resources devoted to supporting the market this fall. So, I am not shorting.
Don’t forget that central banks are being used to consolidate and control the factors of production of the major economies of the world. Their buying will be without limit any time markets are in serious stress. Part of this is driven by political agendas. Don’t forget that central banks will buy to protect their existing equity portfolios.
When will stock prices drop? Probably it will not happen until the economy and political system are damaged beyond repair. That exact moment is not knowable.