This is the final part in a series of articles explaining why I expect the third and final leg of the crash that began in October 2018 to occur in October 2019, or sooner, and see the S&P 500 fall ~30% to lower lows ~2100-2200.
Until then I expect the S&P to slowly grind higher towards 3000-3150, short-term pullbacks aside.
This matters to Gold, Silver, and the Miners, because when stocks crash, the Fed will be forced to reverse policy to rate cuts, QE, and more monetary insanity on steroids, and that will catapult precious metals and miners to new highs.
There are many reasons why I expect another “Crash in the Fall” like that in 2018. I covered Liquidity, Technicals, Elliott Wave Theory, and Sentiment to support the case for a crash in October, “or sooner”, especially based on how close we are to the expected peak circa 3000 plus. What follows are just a few of the many more.
This is back to its lowest level since December 2017. We all know what happened next.
Having held its 200-month moving average yet again, the monthly chart for the 10Y Treasury Bond clearly shows that we have much lower to go yet in yield terms before we hit bottom.
What would it take for that to happen? A crash in stocks? Investors dump equities and race to the perceived safety of Bonds followed by a Fed reversal QE and they start buying treasuries again, driving yields even lower.
And then there is the dreaded “Hockey Stick” which predicted the 2000 and 2008 stock market crashes. This refers to the drop in both 2-Year and 10-Year Treasury Bond yields but the 2-Year yield falls faster as short-term rates are cut or expected to be cut in response to weakening economic and/or financial market conditions.
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