6/25/2015 – Another negative day with the Dow Jones down 75 points (-0.42%) and the Nasdaq down 10 points (-0.20%)
A massive and rather rapid stock market decline is coming soon. And while we won’t have a crash, considering the amount of margin debt out there, quite a few people will get wiped out. If you would like to find out exactly when this move will develop, to the day, pleaseClick Here.
Is the stock market crash even possible in today’s market environment?
I discussed just that with a money manager friend of mine over the weekend. He was adamant that any sort of a large scale crash or sell-off is impossible today. Why? To keep it short, the markets are much bigger and more liquid, the FED will be fast to act and corporate America is doing just fine.
Fair enough, but John Hussman is not buying the argument: Get Ready for Stock Crash Along Lines of 1929, 2000 & 2007
Who is right?
No one expects a crash and most people believe they are impossible, that’s why they happen. We are most certainly setup for one today. Shiller’s S&P P/E is at 27, third highest ever, right behind 1929 and 2000 tops. We all know what happened thereafter.
Plus, the liquidity situations today is almost identical to what had transpired right before the 1987 crash. We talked about that yesterday in Goldman Warns: Liquidity Can Quickly Become A Big Problem. So, indeed, we might be in an environment where a crash is not only likely, but is highly probable.
Speaking of 1929 crash, predicting it and John D. Rockeffeller. Let me tell you a cool story.
The Dow set a secondary bottom in early May of 1924 and then went on a rampage bull market that terminated on September 3rd, 1929 (exact top). Thereafter, the Dow distributed for 6 weeks before initiating its crash sequence on October 24, 1929. By November 13th, 1929 the Dow was down 49%. A devastating collapse.
Now, I know what you are thinking. “People were kind of dumb back then. The market was clearly in a speculative bubble and even a monkey with half a brain could have seen the 1929 crash coming from a mile away”. WRONG. Human nature never changes. Case and point, I present to you probably the smartest and the wealthiest businessman who ever lived, Mr. John D. Rockeffeller (his net worth was over $200 Billion in today’s money).
October 30, 1929: The Dow Jones Industrial Average has one of its best days ever, rocketing up 29 points, or 12.3%, to 258 as John D. Rockefeller, Sr. announces: “There is nothing in the business situation to warrant the destruction of values that has taken place on the exchanges during the past week. My son and I have for some days been purchasing sound common stocks.” The Dow goes on to lose 84.1% more of its value before bottoming out on July 8, 1932.
I think his quote speaks for itself. Just as in 1929, 99.99% of people today are not aware of where we are. Back to 2015. I have already beaten the fundamental/economic/market horse and today’s stock market overvaluation/speculation levels to death. Both, in my daily blog and in my weekly updates. The only remaining question is, are you ready for a big market sell-off when it comes? If you would like to find out when that happens, pleaseClick Here
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. 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 2015-2017 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. June 25th 2015 InvestWithAlex.com
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