What will stop the US stock market? 2

The US stock market has been bullish for 3433 days without a drop of 20 per cent, which is typically associated with a bear market. As I mentioned yesterday, there is a plenty of bad news which has the potential to drag down a stock market; however, since investors have the confidence in the US stock market and the US equities are the best choice among all sorts of investable assets, the US stock market is unaffected by the downside factors. Here comes a question: what will stop the US stock market?

A systematic collapse within the US financial sector will definitely trigger a financial crisis and drag the stock market down inevitably,  just like what we have seen from the last financial crisis. Such event is not foreseeable and often is a black swan event. However, because some investors may have this black swan event in their minds, they will always be aware of exit time. These investors could be scared by some minor events which make them think a major crisis is coming. If there are many of such investors, it is easy for investors to start playing greater fool game.

In addition, a significantly weak sign of the US economy may also trigger the US stock market's bear. One of the factors that support the current strong stock market performance is the strong Us economy. Almost every quarter, there are more jobs created, the wage level in the US increases, the unemployment rate falls. However, if there is an immediate shift in the US economic data, the US stock market will feel a shock and investors are highly likely to change their expectations thus changing their investment strategies.

Furthermore, a wide range of disappointment in companies' earnings reports can trigger the stock market's bear as well, especially investors feel substantially disappointed about earnings reports of all tech giants and major game changers (such as Bank of America). However, this is not very likely, given the strong US economic data.

To conclude, there are several factors which can potentially stop the US stock market strong performance; however, none of these factors are likely to take place in the very near future; therefore, the US stock market is highly likely to continue its strong performance in the coming quarter.