10/13/2015 – A down day with the Dow Jones down 50 points (-0.30%) and the Nasdaq down 42 points (-0.87%)
As you very well know, commodities and emerging markets have really taken a beating over the last few years. One can even argue that countries like Brazil and Russia are selling at give away valuations. And to a certain extent they are.
But that’s not the issue here. This is GOLDMAN: Welcome to the ‘3rd wave’ of the financial crisis
In the article above Goldman Sachs implies that we are currently going through a 3rd financial correction, but this correction will be mostly confined to emerging markets and commodities. Hence, not much impact will be felt in our capital markets.
I tend to disagree with their assessment, but not for the reason you might think. Yes, we can talk about the fundamentals, just how overpriced the stock market is and that we are in a bubble. We all know that.
The reason I don’t believe the “3rd wave down” will be contained has to do with my cyclical analysis and today’s market structure.
If I had to compare today’s stock market to any other period, in terms of its cyclical composition, it would have to be either 1899-1914 or 1966-1982 bear markets. These periods match our current market conditions nearly perfectly.
Take 2007-2009 mid cycle panic for instance (7-9 years in – half point). We have witnessed identical moves in 1907-1908 and 1972-1974. Their respective half-way points.
Here is what I driving at. We are still in a secular bear market that will only terminate in 2017. The problem is, all secular bear markets tend to end in fairly steep 2-3 year bear markets. And while we are unlikely to see 2009 lows, the US Equity markets won’t be able to escape this financial correction. No way and no matter what Goldman believes.
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. October 13th, 2015 InvestWithAlex.com
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Will The Next Leg Down Be Contained By Emerging Markets & Commodities? Google