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Black swans? Here’s why the recent global breakout in stocks should NOT be trusted

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Beware, the three black swans.

f the trend is, indeed, your friend, then more gains are on the way, because everything is breaking out into uncharted territory around the world. In fact, last week, nine key indexes busted through to record highs on the same day, including the Value Line Geometric Composite (VLG), maybe the broadest global gauge of them all. “It doesn’t mean the market can’t become sick rather quickly,” writes blogger Dana Lyons of J. Lyons Fund Management. “However, for now, this breakout in the Value Line Geometric Composite is probably the best medicine of all the breakouts [that took place on Wednesday].” He calls it a “breakout barrage.” On the surface, it feels like a trend worth buying. Don’t fight the tape, etc. But if you think there’s a “but” coming, you’d be right. A big, flashing “but.”

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