Stocks: Market Crash Looming

[ChooseLiberty]

Wuh Woh

It's October, time for a crash. It's not that easy is it? Is it?

http://www.safehaven.com/article-14697.htm

 

[krazy kaju]

I've been saying for a while that a second deflationary crash is inevitable. It's going to happen by the beginning of 2010.

 

[ChooseLiberty]

Some say early 2010 for another big dump.

Basch's target could set up a big head and shoulders further out.

Interesting US bond market is looking sketchy and IIRC Australia central bank raised rates.

I've been saying for a while that a second deflationary crash is inevitable. It's going to happen by the beginning of 2010.

 

[Sarge]

BAM model calling for a crash now,

http://www.baminvestor.com/blog/

If the Fed were not playing games, we might have had one already. It is hard to trust a chart anymore as they mess with them all. Not just me noticing that. Watch the end of the day tape antics.

Most people are not picking up that the daily and hourly ADS line on the SPX are both dancing around the zero line. Starting to show a sick market. ETF'S appear to be messing up the $VIX as an indicator anymore.

Time will tell.

 

[LiveFree79]

No way. I don't care what charts, what graphs what historical perspective anyone throws around if anything was going to crash it would have happened last year. This whole gloom and doom crap is rubbish. I think you'll start to see corporate earnings and quarter growth rise. With a few bumps here and there the FED will again print their way out of this whole mess without repercussion. They've got way too much invested to suffer another big drop.

 

[krazy kaju]

Just when it comes to the fundamentals, I believe we have a second round of debt deflation coming. As soon as all of the pumped into financial markets enter the economy and cause general inflation, we will see a stock market crash as cash leaves the stock markets, a banking crisis as banks overexposed to stocks go under, and a general financial panic as investors pull out because of fear and high uncertainty. The resulting fall in the velocity of money will cause price deflation, especially in the valuation of assets like stocks and real estate.

We could also fall into a liquidity trap if the federal government becomes over-indebted, which is in itself a possibility. If debt exceeds over 100% of GDP, which looks like it will soon, investors might not be willing to buy T-bills at the current low rates. But since the Fed and other central banks will keep US Treasuries and T-bills at low rates, we could see a classical liquidity trap where monetary pumping ends up in bank reserves and under beds as creditors become too afraid to lend to anyone.

But after the second deflationary wave, it looks like we'll have major, double digit inflation in the cards.

 

[krazy kaju]

No way. I don't care what charts, what graphs what historical perspective anyone throws around if anything was going to crash it would have happened last year. This whole gloom and doom crap is rubbish. I think you'll start to see corporate earnings and quarter growth rise. With a few bumps here and there the FED will again print their way out of this whole mess without repercussion. They've got way too much invested to suffer another big drop.

The BOJ was unable to print their way out of their decade long depression. The Fed was unable to print their way out of the Great Depression (and yes, they tried). The Fed has been trying to print its way out of this crisis for over a year and they have been failing, for the most part.

 

[hugolp]

The BOJ was unable to print their way out of their decade long depression. The Fed was unable to print their way out of the Great Depression (and yes, they tried). The Fed has been trying to print its way out of this crisis for over a year and they have been failing, for the most part.

This. And the deflationary crash happens or it does not, in the close future there is stagflation like in the 70's but probably worse, not a recovery.

Why do you think it will happen at the beggining of 2010 and not now?

 

[ChooseLiberty]

Any big dates for Dr Paul's Fed Audit Bill coming up?

The week it goes up for a vote you can bet there will be havoc in the US markets so the bankers can say something about shaken confidence in the markets and martial law.

Not a conspiracy theory, just a conspiracy fact.

 

[ChooseLiberty]

Well a huge wedge up on low volume usually doesn't just turn into another up move.

I've noticed a lot of buying that would usually drive prices up is now doing almost nothing.

This is the exact opposite of what happened in March.

There are big bears above this market biting the heads off the salmon as they pop out of the water. Grrrrrr.

BAM model calling for a crash now,

http://www.baminvestor.com/blog/

If the Fed were not playing games, we might have had one already. It is hard to trust a chart anymore as they mess with them all. Not just me noticing that. Watch the end of the day tape antics.

Most people are not picking up that the daily and hourly ADS line on the SPX are both dancing around the zero line. Starting to show a sick market. ETF'S appear to be messing up the $VIX as an indicator anymore.

Time will tell.

 

[krazy kaju]

This. And the deflationary crash happens or it does not, in the close future there is stagflation like in the 70's but probably worse, not a recovery.

Agreed.

Why do you think it will happen at the beggining of 2010 and not now?

I'm saying that I think it will happen sometime between now and the beginning of 2010. It seems as if all the factors are beginning to culminate into a crash, but it's impossible to tell exactly when that crash will come.

Well a huge wedge up on low volume usually doesn't just turn into another up move.

Yup. Rising prices and low volume mean that buying power is being exhausted. It might soon be overwhelmed by selling, which could then turn into a crash as investors decide to pull out of the market.

 

[Jeez]

DoW will hover around 10,000 mainly because US companies will continue to meet their profit projections thanks to growth in Emerging markets and even countries like Japan are better than expected economic numbers. I would recommend people to stick with multi national companies (Yum, Mcdonalds, Pepsi, Cat, P&G etc)

 

[Che]

If you see there's gonna be Dow crash soon, what about the perspectives of dollar and how will it be affected by it?\
Usually when the market soars, the value of dollar decreases and vice versa. So i'm hoping that the dollar will regain?

 

[MrNick]

Last I heard a week or so ago insider selling was 70 to 1.

 

[krazy kaju]

If you see there's gonna be Dow crash soon, what about the perspectives of dollar and how will it be affected by it?\
Usually when the market soars, the value of dollar decreases and vice versa. So i'm hoping that the dollar will regain?

Well, I think the dollar will gain value as the stock markets crash, banks overexposed to stocks collapse, real estate prices fall, banks overexposed to real estate collapse, and the entire financial system comes to a grinding halt due to high risk, high uncertainty, and low returns. The velocity of money will come to a halt with that as the demand for money soars.

Ultimately, the Fed should be able to inflate after that crash clears much of the market, but there is a slight possibility of a classical Keynesian-type liquidity trap, where interest rates for securities the Fed buys become so low that nobody except central banks and foreign governments buy them, as investors become paralyzed from fear. This could happen if national debt exceeds 100% and investors lose faith in the US government's ability to repay that debt. I doubt that such a long-run liquidity trap could happen though, but it is a possibility.

 

[CzargwaR]

Cyclist, the guru forecaster from kitco forums has signaled for a waterfall type crash on 13th of October.

 

[ChooseLiberty]

For a look at how the $USD is affecting things -

Look at a weekly chart of the dollar index/ UUP with a MACD indicator vs dow vs gold.

Notice how the MACD is closing up and what happened last time it did the same thing and crossed in March/April 08 - basically the start of all hell breaking loose.

 

[krazy kaju]

We live in interesting times.

 

[Sarge]

Interesting read,

http://www.marketwatch.com/story/as-bank-earnings-begin-a-warning-from-the-occ-2009-10-09

Surprise, surprise.

 

[krazy kaju]

This might sound crazy and sick, but I'm kind of excited. It's horrible what will happen to the life savings and earnings of millions of people, but this is a once in a millennium opportunity to witness the fall of an economic superpower.