10/3/2014 – A big up day with the Dow Jones up 208 points (+1.24%) and the Nasdaq up 45 points (+1.03%).
The stock market continues to behave exactly as anticipated. If you would be interested in learning exactly what it is doing, but more importantly, what’s coming up next….. please CLICK HERE.
I am truly dumbfounded with today’s market, but not for the reasons most commonly associated with it. In all of my years in financial markets I have never seen a situation like this. And while some might argue that I haven’t seen every market environment, this sort of thinking doesn’t apply here. I have spent the last 10 years on an in depth research of the Dow going all the way back to May of 1790. In fact, I am so well versed in the index and all of its history that you can give me a year and I will give you where the Dow was. For instance, the Dow bottomed in June of 1859 @ 8.33 as the Civil War was about to begin. I had a feeling I should have gone long back then.
Still, I haven’t seen the environment we are facing today. What am I talking about?
The psychological setup of the masses. Since its September 19th top the Dow declined a miserly 678 points from an all time high or 3.9% and the masses literally freaked out. With most investors going from their extremely bullish view to an extremely bearish one and with financial media predicting literal Armageddon. At the same time, others were suggesting that a 3.9% decline warrants the buying opportunity of a lifetime. For example, Cramer: The time to buy has arrived
What does it all mean?
Given today’s psychological backdrop (as above) we are in an extremely dangerous situation. It is a well known fact that today’s valuation levels are reminiscent of 2000 and 2007 tops, the FED is tightening, speculative fever is high, bears are non-existent and margin interest is at an all time high. In other words, its a perfect environment for a market crash. Just imagine what happens, god forbid, if the market declines 10-15%. A panic?
Let me put it this way. Today’s stock market is like a 40 ft container load full of TNT and margin interest combined with skittish psyche is like a lit fuse disappearing inside of it.
The only remaining question is……WHEN?
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014-2017. 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 2014-2017 will start (to the day) and its internal composition, please CLICK HERE
(***Please Note: 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. October 3rd, 2014 InvestWithAlex.com
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