U.S. Stock Market at Major Top! - Exit Longs Now!!

The great Marty Zweig once said "don't fight the Fed!" And these words of wisdom have mostly worked well for traders and investors forever, it seems. However, I strongly believe that this time may be different. Now there is a phrase that will get you in a lot of trouble. "This time is different!"

In one of the most telegraphed policy shifts in history, the U.S. Federal Reserve is about to pivot from a relatively tight monetary policy to at least minor accommodation with its first cut in interest rates in several years. Most major U.S. stock market indices are at or near all-time highs and many Wall Street pundits are forecasting even higher prices immediately ahead.

The prospect of lower interest rates combined with the current fever among investors for stocks in the "artificial intelligence" space may be justification for hanging on to U.S. equities here, but I see signs of a "Dot Com - like" exhaustion top.

When the Dot.com stocks topped out in January 2000, the Nasdaq QQQ Index fell 83% over the next 20 months. The Dot.com era was certainly unique, but it's not hard to see signs of the same sort of "irrational exuberance" now.

Investors are counting on the elusive "soft landing" in the U.S. economy and therefore "no recession" and no meaningful correction in stock prices. Truth be told, the current Fed gets high marks for it's policy actions of the last couple of years. However, the Fed may have waited too long to change gears here, and the U.S. and global economies look poised for significant slowdowns that result in growing recession fears. Of course, China is already showing signs of recession which the PBOC seems late in its efforts to stem the tide. 

If you sell stocks here, where can you hide your capital? Intermediate-term U.S. Treasury securities look good to me here, as do precious metals mining stocks.

Nasdaq 100 Index (QQQ) Weekly Chart

S&P 500 Index (SPY) Weekly Chart

Major Gold Miners ETF (GDX) Weekly Chart