Sotheby’s “Bubble Indicator” update
In the past, I have posted about the correlation between Sotheby’s and the broader equity indexes. Sotheby’s (BID) has proven to be a pretty decent bubble indicator, dating back to the late 80’s, as marked by this chart originally posted (in 2011) on Zero Hedge.
BID may be flashing a warning sign once again. In 2011, it broke down from the mid-40’s and dropped over 40% before finding a bottom in the 20’s. It has broken down again, from the same level as in 2011. In the below chart, 2011 is the middle breakdown.
Below is a closer look at the current breakdown. In fact, my chart from 2011 looks almost identical the one below. Last time, the price fell a good bit further. We’ll see how it shakes out this time.
We can see how a breakdown in BID might correlate to other markets, like Nasdaq (QQQ). It looks like QQQ may be putting the finishing touches on the right shoulder of a large head and shoulders pattern. That pattern sure is conducive to a major market top.
Only time will tell if it was a useful warning or a false alarm this time around.