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Stock Market Plunges Again – Global Stocks Down 5 Weeks In A Row – 8 Trillion Dollars In Wealth Wiped Out

October 27, 2018

Stock Market Plunges Again – Global Stocks Down 5 Weeks In A Row – 8 Trillion Dollars In Wealth Wiped Out

It’s not over.  The worst October stock market crash since 2008 got even worse on Friday.  The Dow was down another 296 points, the S&P 500 briefly dipped into correction territory, and it was another bloodbath for tech stocks.  On Wednesday, I warned that there would be a bounce, and we saw that happen on Thursday.  But the bounce didn’t extend into Friday.  Instead, we witnessed another wave of panic selling, and that has many investors extremely concerned about what will happen next week.  Overall, global stocks have now fallen for five weeks in a row, and during that time more than 8 trillion dollars in global wealth has been wiped out.  That is the fastest plunge in global stock market wealth since the collapse of Lehman Brothers, and it is yet another confirmation that a major turning point has arrived.

The wild swings up and down that we witnessed this week are very reminiscent of what we saw in 2008.

Markets just don’t go down in a straight line.  In fact, some of the best days in all of Wall Street history happened right in the middle of the last financial crisis.

When markets are very volatile, the overall trend tends to be down.  So what investors should be hoping for are extremely boring days on Wall Street when not much happens.  That has been the usual state of affairs for much of the past decade, but now volatility has returned with a vengeance.  The following is how CNBC summarized the carnage that we witnessed on Friday…

…click on the above link to read the rest of the article…

Stock Market Crash! The Dow Has Now Plunged 2,368 Points From The Peak Of The Market

October 25, 2018

Stock Market Crash! The Dow Has Now Plunged 2,368 Points From The Peak Of The Market

The level of panic that we witnessed on Wall Street on Wednesday was breathtaking.  After a promising start to the day, the Dow Jones Industrial Average started plunging, and at the close it was down another 608 points.  Since peaking at 26,951.81 on October 3rd, the Dow has now fallen 2,368 points, and all of the gains for 2018 have been completely wiped out.  But things are even worse when we look at the Nasdaq.  The percentage decline for the Nasdaq almost doubled the Dow’s stunning plunge on Wednesday, and it has now officially entered correction territory.  To say that it was a “bloodbath” for tech stocks on Wednesday would be a major understatement.  Several big name tech stocks were in free fall mode as panic swept through the marketplace like wildfire.  As I noted the other day, October 2018 looks a whole lot like October 2008, and many believe that the worst is yet to come.

But in the short-term we should see some sort of bounce once the current wave of panic selling is exhausted.  During every major stock market crash in our history there have been days when the stock market has absolutely soared, and this crash will not be any exception.

If we do see a bounce on either Thursday or Friday, please don’t assume that the crash is over.  Most key technical levels have already been breached, and even a small piece of bad news can send stocks plunging once again.

On Wednesday there really wasn’t anything too unusual that happened, but stocks cratered anyway.  Here is a summary of the carnage…

-The Dow Jones Industrial Average plummeted 608 points on Wednesday.

-The Dow is now down 7.1 percent for the month of October.

-The S&P 500 has now fallen for 13 of the last 15 trading days.

…click on the above link to read the rest of the article…

Teetering On The Brink Of Disaster: 14 Of 19 Bear Market Signals Have Now Been Triggered

October 24, 2018

Teetering On The Brink Of Disaster: 14 Of 19 Bear Market Signals Have Now Been Triggered

October 2018 is turning out to be a lot like October 2008.  The S&P 500 has now fallen for 12 of the last 14 trading days, and it is on pace for its worst October since the last financial crisis.  But the U.S. is actually in much better shape than the rest of the world at this point.  Even though they have fallen precipitously in recent days, U.S. stocks are still up 3 percent for the year overall.  On the other hand, global stocks (excluding the U.S.) are now down more than 10 percent for the year, and they are down more than 15 percent from the peak of the market in January.  All it is going to take is a couple more really bad trading sessions to push global stocks into bear market territory.

And even though U.S. stocks are still outperforming the rest of the world, many are anticipating that the U.S. is definitely heading for a bear market as well.

According to Bank of America, 14 out of their 19 “bear market indicators” have now been triggered…

“Expect a long bout of volatility,” Bank of America strategists led by Savita Subramanian wrote in a report published on Sunday.

Bank of America keeps a running tally of “signposts” that signal looming bear market. The bad news is that 14 of these 19 indicators, or 74%, have been triggered. Two more were toppled earlier this month: the VIX volatility index (VIX) climbed above 20 and a growing number of Americans expect stocks to go up.

Of course not all 19 indicators need to be triggered in order for a bear market to happen.  These indicators are simply signposts, and what they are telling us is that big trouble could be brewing for the financial markets.

…click on the above link to read the rest of the article…

The Dow Has Fallen Nearly 1,500 Points From The Peak Of The Market, And Many Believe This “October Panic” Is Just Beginning…

October 19, 2018

The Dow Has Fallen Nearly 1,500 Points From The Peak Of The Market, And Many Believe This “October Panic” Is Just Beginning…

We haven’t had an October like this in a very long time.  The Dow Jones Industrial Average was down another 327 points on Thursday, and overall the Dow is now down close to 1,500 points from the peak of the market.  Unlike much of the rest of the world, it is still too early to say that the U.S. is facing a new “financial crisis”, but if stocks continue to plunge like this one won’t be too far away.  And as you will see below, many believe that what we have seen so far is just the start of a huge wave of selling.  Of course it would be extremely convenient for Democrats if stocks did crash, because it would give them a much better chance of doing well in the midterm elections.  This is the most heated midterm election season that I can ever remember, and what U.S. voters choose to do at the polls in November is going to have very serious implications for the immediate future of our country.

After a very brief rally earlier in the week, stocks have been getting hammered again.  The S&P 500 has now fallen for 9 out of the last 11 trading sessions, and homebuilder stocks have now fallen for 19 of the last 22 trading sessions.  It was a “sea of red” on Thursday, and some of the stocks that are widely considered to be “economic bellwethers” were among those that got hit the hardest…

Several stocks seen as economic bellwethers fell sharply in the U.S., including United Rentals and Textron, which dropped at least 11 percent each. Snap-on and Caterpillar, meanwhile, fell 9.6 percent and 3.9 percent, respectively.

…click on the above link to read the rest of the article…

Global Markets Continue To Fall As Bloomberg Warns “The Next Financial Crisis Is Staring Us In The Face”…

October 15, 2018

Global Markets Continue To Fall As Bloomberg Warns “The Next Financial Crisis Is Staring Us In The Face”…

It looks like it could be another tough week for global financial markets.  As the week began, markets were down all over the world, and relations between the United States and Saudi Arabia have taken a sudden turn for the worse.  That could potentially mean much, much higher oil prices, and needless to say that would be a very bad thing for the U.S. economy.  It has really surprised many of us how dramatically events have begun to accelerate here in the month of October, and the mood on Wall Street has taken a decidedly negative turn.  Yes, U.S. stocks did bounce back a bit on Friday (as I correctly anticipated), but it was much less of a bounce than many investors were hoping for.  And this week got off to a rough start with all of the major markets in Asia down significantly…

In the Greater China region, the Hang Seng index in Hong Kong fell by around 0.9 percent in early trade. The Shanghai composite also slipped by 0.33 percent while the Shenzhen composite bucked the overall trend to edge up by 0.4 percent.

In Japan, the Nikkei 225 fell by 1.48 percent in morning trade, while the Topix index slipped by 1.17 percent, with most sectors trending lower.

But what happened in Asia was nothing compared to what we witnessed in Saudi Arabia.

At one point the stock market in Saudi Arabia had plummeted 7 percent after news broke that President Trump warned that the Saudis could face “severe punishment” for the disappearance of journalist Jamal Khashoggi.

The Saudis are denying doing anything wrong, but everyone agrees that he is missing, and everyone agrees that he was last spotted entering the Saudi Consulate in Istanbul on October 2nd.

And it is being reported that U.S. intelligence had previously intercepted communications which indicated that the Saudis planned to abduct Khashoggi.

It is believed that Khashoggi was dismembered after being abducted by the Saudis, and all of the major western powers have expressed major concern about his fate.  But the Saudis insist that they didn’t have anything to do with his disappearance, and they are threatening “greater action” if any sanctions are imposed upon them.  The following comes from USA Today…

Why Are So Many People Talking About The Potential For A Stock Market Crash In October?

September 26, 2018

Why Are So Many People Talking About The Potential For A Stock Market Crash In October?

It is that time of the year again.  Every year, people start talking about a possible stock market crash in October, because everyone remembers the historic crashes that took place in October 1987 and October 2008.  Could we witness a similar stock market crash in October 2018?  Without a doubt, the market is primed for another crash.  Stock valuations have been in crazytown territory for a very long time, and financial chaos has already begun to erupt in emerging markets all over the globe.  When the stock market does collapse, it won’t exactly be a surprise.  And a lot of people out there are pointing to October for historical reasons.  I did not know this, but it turns out that the month with the most market volatility since the Dow was first established has been the month of October…

The difference is quite significant, as judged by a measure of volatility known as the standard deviation: For all Octobers since 1896, when the Dow Jones Industrial Average was created, the standard deviation of the Dow’s daily changes has been 1.44%. That compares to 1.05% for all months other than October.

Like me, you are probably tempted to think that the reason why October’s number is so high is because of what happened in 1987 and 2008.

But even if you pull out those two months, October is still the most volatile…

You might think that this difference is caused by a few outliers, such as the 1987 crash (which, of course, occurred in October) or 2008 (the Dow suffered several thousand-point plunges that month as it reacted to the snowballing financial crisis). But you would be wrong: The standard deviation of daily Dow changes is much higher in October than other months even if we eliminate 1987 and 2008 from the sample.

…click on the above link to read the rest of the article…

When the big ones start going, you better head for the hills.” – Eric Sprott on volatile markets (Weekly Wrap-up, April 06,2018)

April 7, 2018

When the big ones start going, you better head for the hills.” – Eric Sprott on volatile markets (Weekly Wrap-up, April 06,2018)

 

That’s another week in the books, and Eric Sprott returns once again to break it down for you. In this week’s wrap-up, you’ll hear his thoughts on:

  • What a weak US jobs report means for gold and silver
  • The “terrible vulnerability” of the stock market
  • Plus: Surging open interest in COMEX silver

“The big worry when I look at the stock market in general … I would be very concerned about some of the things that are happening on a macro scale. And one of them, of course, is what happened to cryptocurrencies … It’s a wipeout! People doing exactly the wrong thing with their money … And it just tells you about markets. Let’s go to the stock market … [Facebook, Google, Amazon…] They’re getting picked off one by one. When the big ones start going, you better head for the hills … I just think that this stock market is looking terribly vulnerable. I wouldn’t want to be in it. There are so many things that can go wrong here.”

To hear Eric’s full thoughts, listen here: https://soundcloud.com/sprottmoney/sprott-money-ne…

 

Technically Speaking: The Real Value Of Cash

November 24, 2015

Technically Speaking: The Real Value Of Cash

With the “inmates running the asylum” during a holiday-shortened trading week, the upward bias to the market is set to continue. However, as I addressed last week:

“As we progress through the last two months of the year, historical tendencies suggest a bias to the upside. This is particularly the case given the weakness this past summer which has left many mutual and hedge funds trailing their benchmarks. The need to play ‘catch-up’ will likely create a push into larger capitalization stocks as portfolios are ‘window dressed’ for year end reporting.

This traditional ‘Santa Claus’ rally, however, does not guarantee the resumption of the ongoing ‘bull market’ into 2016. The chart below lays out my expectation for the market through the end of the year.”

SP500-MarketUpdate-112315-2

“With the markets currently oversold on a very short-term basis, the current probability is a rally into the ‘Thanksgiving’ holiday next week and potentially into the first week of December. As opposed to my rudimentary projections, the push higher will likely be a ‘choppy’ advance rather than a straight line.”

So far, the analysis over the last several weeks has continued to play out as expected. However, and this is crucially important, a near-term expectation of a bullish advancedue to the recent correction and seasonal tendencies is not the same as long-term bullish outlook. 

As stated above, while seasonality likely holds the cards through the end of this year, projecting much beyond that window is foolishness. 

The Real Value Of Cash

This brings to mind a call I had on the radio show recently discussing his advisor’s reluctance to hold cash. 

The argument against holding cash goes this way:

“If you hold cash you lose value over time to inflation.”

This is a true statement if you hold cash for an EXTREMELY long period. However, holding cash as a “hedge” against market volatility during periods of elevated uncertainty is a different matter entirely. 

…click on the above link to read the rest of the article…

It Wasn’t a Crash – But it Could Become One

September 9, 2015

It Wasn’t a Crash – But it Could Become One

A Reminder by John Hussman

In light of the Nikkei Index soaring by more than 1,300 points (!) overnight – a single day gain of 7.7% – it is time to briefly review the current market situation. As to the Nikkei, we would note two things: 1. it was “catching up” to what other markets have been doing, after having been the only stock market index that was significantly down the previous day (whereas all other markets soared after the close of trading in Japan) and 2. such enormous volatility – regardless of its direction – is usually not a bullish sign. Quite the contrary, in fact.

brokenlinkchain

Nikkei, dailyThe Nikkei jumps by 1,343 points overnight – click to enlarge.

In his weekly market comment, John Hussman tries to defuse the hysteria surrounding the recent market break a bit, by reminding everybody that a 10% correction is not a “crash”, but actually a quite normal occurrence. The only reason why it felt abnormal was that there hasn’t been any market volatility for such a long time. It is this long absence of market volatility that was abnormal, not the 10% decline. He writes:

“The market decline of recent weeks was not a crash. It was merely an air-pocket. It was probably just a start. Such air pockets are typical when overvalued, overbought, overbullish conditions are joined by deterioration in market internals, as we’ve observed in recent months. They are the downside of the “unpleasant skew” that typically results from that combination – a series of small but persistent marginal new highs, followed by an abrupt vertical decline that erases weeks or months of gains within a handful of sessions (see Air Pockets, Free-Falls, and Crashes).

…click on the above link to read the rest of the article…

 

DANGER WILL ROBINSON

March 25, 2015

DANGER WILL ROBINSON

It’s funny how the truth sometimes leaks out from the government. I’m guessing that Mr. Ted Berg will not be working for the Office of Financial Research much longer. This new agency was created by the Dodd Frank Law and is supposed to protect consumers from the evil Wall Street banks. But we all know the evil Wall Street banks wrote the bill, have gutted the major provisions, have captured all the regulatory agencies, own the Federal Reserve, and control all the politicians in Washington D.C. So, when an honest government analyst writes an honest truthful report that unequivocally proves the stock market is grossly overvalued and headed for a crash, the Wall Street banking cabal will surely call the top government apparatchiks to voice their displeasure. Truth is treason in an empire of lies.

The soon to be fired Mr. Berg’s verbiage is subtle, but pretty clear.

Option-implied volatility is quite low today, but markets can change rapidly and unpredictably, a phenomenon described here as “quicksilver markets.” The volatility spikes in late 2014 and early 2015 may foreshadow more turbulent times ahead. Although no one can predict the timing of market shocks, we can identify periods when asset prices appear abnormally high, and we can address the potential implications for financial stability.

Markets can change rapidly and unpredictably. When these changes occur they are sharpest and most damaging when asset valuations are at extreme highs. High valuations have important implications for expected investment returns and, potentially, for financial stability.

However, quicksilver markets can turn from tranquil to turbulent in short order. It is worth noting that in 2006 volatility was low and companies were generating record profit margins, until the business cycle came to an abrupt halt due to events that many people had not anticipated.

…click on the above link to read the rest of the article…

 

 

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