1/30/2015 – A big down day with the Dow Jones down 248 points (-1.42) and the Nasdaq down 48 points (1.03%).
The market continues to perform as anticipated. As the market turned around and surged higher on December 16th, 2014, my subscribers knew exactly what that meant. My mathematical and timing work at the time projected the next tuning point on December 27th at 18,100 (+/- 50 points). The Dow topped out on December 26th at 18,103. Not bad if you ask me.
Since then, the Dow is down -5.2% So, are we about to bounce or is this sell-off just getting started? Click Here to find out.
Now, lets get to oil and what the collapse means for the overall stock market. One of the best technical/fundamental looks at the subject matter that I have seen can be found here Is Oil’s Big Capitulation Sell-Off Still Ahead? I couldn’t agree more and, once again, that’s the reason why you shouldn’t try to catch a falling knife. Plus, oil might stay at today’s levels for quite some time.
With that in mind, my primary concern is as follows. This oil price collapse hasn’t yet been felt throughout corporate America and corporate earnings. We will only start seeing that in Q1 of 2015. And by default, in the overall stock market indices. Meaning, a huge number of companies will have to write stuff off or guide lower.
Yes, there will certainly be a positive impact from lower oil prices. Such as higher consumer discretionary spending power and cost savings for a few select companies. Yet, I don’t believe it will be as significant as most financial analyst believe. And as I have suggested a few days ago, the Dow Transportation index is not reacting to any such cost savings Shiller Thinks You Are Scared & What Does The Dow Transports Index Tell Us.
That is to say, I believe the negatives will outweigh the positives by a large margin. Shale development/production is no longer economical. Thousands of companies will default and go out of business. Tens of thousands will lose their high paying jobs. Banks will be impacted. Earnings will be impacted. Junk debt market will blow up. Market caps will be cut in half. And so on and so forth. Will this lead to Trillions in losses in both market and real capital? No one knows just yet. In either case, expect this oil crash to spread through the rest of the economy and capital markets in 2015.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014/15-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2014/15-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. January 30th, 2015 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
How I Predicted December 26th Top And How This Oil Crash Will Impact The Stock Market Google