Crashing Markets, Credit Downgrades- What Comes Next?
Tragic news about the United States economic atmosphere has been inescapable throughout the country and world for quite some time now. With constant debate over raising the debt ceiling, shocking losses in the stock market, devastating unemployment rates, and a downgraded national credit rating, it’s no wonder the country’s economic health has been in question. After a series of blows to the U.S.’s economic wellbeing, things don’t seem to be getting much better. The country’s credit rate fall has been of great discussion ever since Standard and Poor’s downgraded it by a full point on Monday, August 8th 2011. To add to the blow, the U.S. stock exchange ended the day that Monday down more than 600 points. Continue reading
Six Straight Weeks of Decline Take DJIA Below 12,000: What Now?
Before blaming falling stocks on the most recent weak economic reports, let’s check some dates.
As of June 10, the Dow has suffered the “longest losing streak since the fall of 2002. The market’s last seven-week stretch of losses began in May 2001, as the dot-com bubble deflated,” reports The Associated Press.
As for why stocks are falling, most observers agree: Blame “weaker hiring, industrial output, and a moribund housing market.” The economic reports from the past two weeks made that clear.
But wait a minute. The DJIA didn’t top in the past two weeks — Continue reading
Stocks Setting up for Big Slide
By Tim McMahon, editor
Historically whenever the 10-year Treasury yield drops 1.2% over a short period of time a bear market for stocks resulted within two months . This signal presaged steep market crashes in 1990, 2000, and 2007.
The Treasury yield signal is now flashing a major warning. On April 5th, 2010 the 10-year Treasury bond was yielding 4.01% and is currently yielding only 2.79%. So over four months the T-bond yield has fallen 1.22%. By this signal we can expect a 20% drop in the stock market over the next two months and it is possible that the beginning of that drop has begun today with a 2.5% drop. Continue reading
Gold Meltdown or Mania – Batten Down the Hatches
By Louis James, Senior Editor, Casey’s International Speculator
As Doug Casey said recently, we expect things to come unglued soon. With the ongoing madness in Europe, it seems to me that things are starting to look visibly less well glued already.
In contemplating the possibility of another stock market meltdown, it seems important to me that in spite of the exuberance with which investors rushed back into the market over the last year, the memory of 2008 remains vivid, tempering enthusiasm with caution. For example, the market still has relatively little appetite for early-stage, grassroots exploration projects; by our latest estimates, Mr. Market is willing to pay on the order of ten times more for Proven & Probable ounces in the ground than for less certain resource categories. With this evidence of caution in mind, and the great unwinding of the broader credit markets well underway, it seems likely that our sector is less leveraged than it was before the crash of 2008.
If a panic in the broader markets put liquidity-crunch-induced pressure on the gold price, the meltdown should be less severe than in 2008 and the eventual rebound could be dramatic, possibly triggering the mania we’ve been calling for.
Is It Possible to Crash-Proof Your Portfolio?
With the recent 5% tumble in one month in both the NYSE and the NASDAQ, I’ve begun thinking about protecting my portfolio from the downside. In an effort to keep you fully invested at all times investment advisors are quick to quote statistics like, “By missing just the best 10 days in the market between 1997 and 2006, an investor’s annualized return would be cut by more than half” but they fail to mention that the NASDAQ peaked in 2000 at around 4700 and is currently at about half of that or 2372. So if you bought near the peak and held the NASDAQ for the last 7 years, it has resulted in a 50% loss.
So I began looking for systems that would profit during both up and down markets and I remembered a system I read about years ago… Continue reading
An Investment Lesson from the Last Crash
Bull Market or Impending Crash?
December 2006
by Tim McMahon
Since March I have been telling you that I expected the market to reach this resistance point, where will it go from here? With the NASDAQ up 53% over the last 12 months, you may wonder why ElliottWave Guru, Robert Prechter is re-releasing a book called Conquer the Crash. Is he crazy or what? Does he know something we don’t know? Continue reading
