This page has been archived and commenting is disabled.
Graham Summers’ Weekly Market Forecast (Market Crash? Edition)
The financial markets are literally standing on the ledge of a cliff looking down into the abyss. The fact we’ve had a coordinated Central Bank intervention in the last week should tell you just how desperate things are getting.
The one hope for the bulls is that the Fed will announce some massive new program at its September meeting which takes place tomorrow and Wednesday. I fully believe the Fed will disappoint in a big way as Bernanke and his loose money policies have become politically toxic: see the GOP debate in which all frontrunners united in their criticism of the Fed.
The market looks to be agreeing with me. The bearish flag formation I warned about last week remains in play. The ultimate downside target for this is 1,000 on the S&P 500.
Within the bearish flag formation, we’ve also got the makings of a Head and Shoulders pattern: another very bearish formation. The drop Sunday night has made this pattern even more probable.
Neither of these formations predict a massive rally on QE 3 or some other new Fed program. Indeed, how can the Fed announce something new? A record number of Americans say they are paying more for their food. Oil is close to $90 per barrel. And Gold is north of $1,800, having touched $1,920 earlier this month.
Aside from this, the Fed has already instigated several new moves this month including the coordinated Central Bank intervention of last week and the opening of FX swap lines last month. I view these moves as preparation for a Greek default, which is most certainly in the near future.
Indeed, having staged two bailouts of Greece and talking down the possibility of a Greek default non-stop over the last 18 months, the ECB and political leaders in Europe seem to have done a complete 180, with the notion of a Greek default now a matter of “when” not “if.”
In early 2010, a Greek default was never even considered to be on the table. At that time, the entire discussion focused on whether or not Greece even needed a bailout. Today, the words “Greek Default” show up in almost every headline pertaining to Europe.
Greece Has 98% Chance of Default on Euro-Region Sovereign Woes
Potential Greek Default Worries European Politicians
Greece default ‘virtually 100 percent
Scenarios: Potential market impact of a Greek default
I fully believe that behind the scenes, the groundwork has already been laid for Greece to default. The market is already pricing this as a 100% certainty. France has its own problems and won’t be able to provide another Greece bailout. Germany is now in another round of elections in which voters are destroying Angela Merkel and her party for supporting the bailouts… at a time when it’s being revealed that even German banks needs tens of billions more in capital.
In simple terms, the “bailout” madness is ending in Europe. What will follow will be a Greek default followed by debt collapses and restructurings in Italy and Spain. Europe is already aware of this, which is why liquidity has dried up to the point that the world’s Central Banks had to stage a coordinated intervention last week.
Indeed, I fully believe that we may in fact be on the verge of a Crash in the markets. All the Red Flags are there. Europe’s entire banking system is on the verge of systemic collapse. Take a look at European banks and you’ll see what I mean.
This is Agricole, the mega-French Bank. Does this look like a solvent financial institution to you? Do you really think that Europe has a chance when even French and German banks are collapsing?
If you have yet to prepare yourself for what’s coming, my Surviving a Crisis Four Times Worse Than 2008 report can show you how to turn the unfolding disaster into a time of gains and profits for any investor.
Within its nine pages I explain precisely how the Second Round of the Crisis will unfold, where it will hit hardest, and the best means of profiting from it (the very investments my clients used to make triple digit returns in 2008).
Best of all, this report is 100% FREE. To pick up your copy today simply go to: http://www.gainspainscapital.com and click on the OUR FREE REPORTS tab.
Good Investing!
Graham Summers
PS. We also feature four other reports ALL devoted to helping you protect yourself, your portfolio, and your loved ones from the Second Round of the Great Crisis. Whether it’s my proprietary Crash Indicator which has caught every crash in the last 25 years or the best most profitable strategy for individual investors looking to profit from the upcoming US Debt Default, my reports covers it.
And ALL of this is available for FREE under the OUR FREE REPORTS tab at: http://www.gainspainscapital.com.
- advertisements -
2nd head and shoulders pattern is different from the one that set off the waterfall. The volume is stronger on the 2nd shoulder than either the left shoulder or the head. In fact, this looks like higher highs and higher lows on increasing volume (one day down does not make a right shoulder). Which sucks, considering that I am net short.
The US bails out Europe to "save the world"...and just cover up the mess here. By doing so, when it all blows up, the US deflects the heat of TBTF at home. Game, set, match....now you see what the end play is.. it is ALL going to blow up and Wall Street gets to blame the Greeks, Spanish, Italians... anybody BUT themselves.
Brilliant, isn't it?
GRAHAM you make the SAME CRASH PREDICTION every single week...
according to your forecasts, the SP is now negative.
Crash in progress unless The Bernank does not crank out $500 Billion.
0.001% interest on savings....
House values crumbling....
Stock market plunging....
People are in a real pickle now .....
You know what - I actually think the darn thing is going to rally - because everybody expects the opposite. You know.. I believe TPTB don't like big market drops....
Of course TPTB will try to ramp. Twist and shout!
The real bet is will it work?
My bet is it won't, and the end of week loss will not be a small one - but I've been wrong plenty before, like last week from Tuesday onward...
GOLD BITCHEZ
"Preemtive strike on gold..."
This is not a strike on gold... gold is doing what all assets do when liquidity is taken away... it goes down in value... the problem is you all got so used to gold actiing like a commodity you forgot what it really was..
Appearntly wrong reply button.. this was directed at Smiddywesson
It's useless to try to discuss with that guy... He is a "true believer" who puts the world "gold" in each and every post he writes. It is a you say, if liquidity dries up in currency X, everything that is priced in currency X drops in price.
But I think gold is the only commodity priced in all currencies.
Can you consume gold? Then how exactly is it a commodity?
You do realize its all one big giant scam right??? always has been, always will
"This is [Crédit] Agricole, the mega-French Bank"
...and CA's the farmers' bank here in France! If they go belly-up there'll be famine here... Not good!
Pretty sure France is capable of creating a credit facility for farmers.
It actually did surprise me that things didn't fall apart last week...fully expected them to as there was no information which indicated other than "default", "crash", "recession" and other nasty things...and yet the market rose...very strange.
There's a lot of information in the world; not all of it is in the form of bullshit opinion pieces advertising bullshit newsletters on Internet blogs. This guy, this poster is absoluely hilarious, he posts a picture of an uptrend; bottoms and tops delineated, and then says its a "bearish flag". He's a complete idiot. The S&P500 will close higher on Friday than it did last Friday. Remember, you heard it here.
Agreed.
$kaM PoZi in full effect. The GREAT PURGE will arrive........unlike Godot............but don't wait........
Preemptive strike on gold...check
Weeklong artificial ramp in stock prices...check
Time for bad news. Anybody want to bet they try to ramp on Thurs and Friday and end the week for a small loss?