{"id":24242,"date":"2017-06-26T13:48:24","date_gmt":"2017-06-26T18:48:24","guid":{"rendered":"http:\/\/olduvai.ca\/?p=24242"},"modified":"2017-06-26T13:48:24","modified_gmt":"2017-06-26T18:48:24","slug":"a-stock-market-crash-scenario","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=24242","title":{"rendered":"A Stock Market Crash Scenario"},"content":{"rendered":"<h3 class=\"post-title\"><a href=\"http:\/\/charleshughsmith.blogspot.co.at\/2017\/06\/a-stock-market-crash-scenario.html\">A Stock Market Crash Scenario<\/a><\/h3>\n<div id=\"post-4706238121317443139\" class=\"post-body\">\n<div><i>The one thing we can know with certainty is it won&#8217;t be easy to profit from the crash.<\/i><\/div>\n<div><b>After 8+ years of phenomenal gains, it&#8217;s pretty obvious the global stock market rally is overdue for a credit-cycle downturn,<\/b>\u00a0and many research services of Wall Street heavyweights are sounding the alarm about the auto industry&#8217;s slump, the slowing of new credit and other fundamental indicators that a recession is becoming more likely.<\/div>\n<div>Few have taken the risk of projecting a date for the crash, this gent being a gutsy outlier:\u00a0<a href=\"http:\/\/www.zerohedge.com\/news\/2017-06-25\/it%E2%80%99ll-be-avalanche-hedge-fund-cio-sets-day-when-next-crash-begins\" target=\"resource\">Hedge Fund CIO Sets The Day When The Next Crash Begins<\/a>.<\/div>\n<div>Next February is a good guess, as recessions and market downturns tend to lag the credit market by about 9 months.<\/div>\n<div><b>My own scenario is based not on cycles or technicals or fundamentals, but on the psychology of the topping process,<\/b>\u00a0which tends to follow this basic script:<\/div>\n<div><img decoding=\"async\" class=\"wide\" src=\"http:\/\/www.oftwominds.com\/photos2017\/crash-scenario6-17.png\" align=\"center\" border=\"0\" \/><\/div>\n<div>When there are too many bearish reports of gloomy data, and too many calls to go long volatility or go to cash, the market perversely goes up, not down.<\/div>\n<div>Why? This negativity creates a classic\u00a0<i>Wall of Worry<\/i>\u00a0that markets can continue climbing. (Central banks buying $300 billion of assets a month helps power this gradual ascent most admirably.) The Bears betting on a decline based on deteriorating fundamentals are crushed by the steady advance.<\/div>\n<div><b>As Bears give up, the window for a\u00a0<i>Spot of Bother<\/i>\u00a0decline creaks open, however grudgingly,<\/b>\u00a0as central banks make noises about ending their extraordinary monetary policies by raising interest rates a bit (so they can lower them when the next recession grabs the global economy by the throat).<\/div>\n<div>As bearish short interest and bets on higher volatility fade, insiders go short.<\/div>\n<div>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>A Stock Market Crash Scenario The one thing we can know with certainty is it won&#8217;t be easy to profit from the crash. After 8+ years of phenomenal gains, it&#8217;s pretty obvious the global stock market rally is overdue for a credit-cycle downturn,\u00a0and many research services of Wall Street heavyweights are sounding the alarm about [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,127,175,1675,587,2731,860],"class_list":["post-24242","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-charles-hugh-smith","tag-credit","tag-economic-cycles","tag-of-two-minds","tag-stock-market-crash","tag-wall-street"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24242","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24242"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24242\/revisions"}],"predecessor-version":[{"id":24243,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/24242\/revisions\/24243"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24242"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24242"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24242"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}