Please note – some might find this post disturbing
In this post I will summarize my thoughts on the markets, particularly the stock market. As has been the case since the Economic Crisis began, any stock market weakness will most likely be mirrored in a variety of other markets as well, such as commodities, credit, etc.
As seen in the previous five posts, from a Technical Analysis perspective I believe there is cause for considerable concern. As those who are familiar with Technical Analysis know, rising prices aren’t necessarily strongly indicative of market health. That is where we are now – strongly rising stock prices but deteriorating underlying technical conditions. There are many more charts that I could post along those lines. I will likely post more charts on an intermittent basis.
As I believe there is extreme peril in the stock market, the logical question would be how such a condition would be resolved. I believe that a future stock market crash is certain, for a variety of reasons – one being that the fundamental value of the stock market is considerably less than that indicated by the price of the S&P500. Another is that there are many technical indicators that seem to indicate a future crash.
Timing of a crash is always difficult to gauge; however, for a variety of reasons I believe that a stock market crash is likely now through October.
Severe economic weakness is often preceded by a stock market crash, and as I stated on my September 1 blog post, found here:
“I do believe we are heading into what will inarguably be classified as a Depression.” One should note that is a condition that I certainly do not want to happen; however, that is the conclusion drawn from my analysis of our economic situation. Hopefully I am wrong; however, my analysis is well-grounded. It should be noted that no one that I am aware of has even mentioned the possibility of a stock market crash.
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SPX at 1071.63 as this post is written