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Graham Summers’ Weekly Market Forecast (At Support Edition)

Phoenix Capital Research's picture




 

Let’s start with the economic situation.

 

The Euro Crisis is by no means over. In fact, we’ve yet to get the details of the mega-Euro bailout that is supposedly going to solve all of Europe’s problems (it won’t but that’s the market’s view for now). Meanwhile Spain and Italy are both coming unraveled in a big way. With GDPs of $1.46 trillion and $2.11 trillion respectively, there is no way the ECB can bail these two out.

 

On the other side of the pond, the White House supposedly reached a debt deal late Sunday night. The deal involves a debt ceiling hike (no surprise) no tax increases, and $2 trillion in spending cuts over the next ten years (though Obama stressed they would not occur so as to damage the US economy).

 

In other words, the US Government kicked the can down the road a little further. Judging from the worsening economic data in the US (this morning’s ISM was a disaster), the can won’t be going far this time around.

 

Against this ugly backdrop, stocks are coming up against support at 1,275. If we take this line out, we’ve got support at 1,250 and then we’re going to 1,225 or even 1,200 in a heart beat.

 

 

Now is the time to be getting defensive. This means rotating our of more speculative growth plays and shifting into non-cyclicals. For some investors it means getting out of stocks all together.

 

One thing that NEEDS to be mentioned is that this time around, bad economic news is resulting in sell-offs. For the last two years, whenever bad data came out, stocks actually rallied on the belief that the Fed would have to provide more stimulus. So the fact that stocks are now tanking on bad economic data should be a major red flag that things have changed.

 

On that note, I full believe that we could be heading into another 2008 episode. We’re DARN close to triggering my proprietary Crash trigger. And there is no shortage of major black swans lurking in the financial system.

 

Indeed, global manufacturing is now at its worst levels since 2009. China is clearly heading into a hard landing while the European debt contagion is spreading to Spain and Italy in a big way.

 

Add to this the fact that the financial system is even more leveraged than it was in 2000 and you’ve got a recipe for financial disaster. And given that this coming crisis will entail entire countries (not just private banks) collapsing, this time around is going to be even worse than 2008.

 

However, this doesn’t mean that you have to lose money. In fact, Crises can be one of the best times to actually produce outsized profits as the financial herds panic and head for the exits.

 

On that note, if you’ve yet to prepare your portfolio for Round Two of the Financial Crisis, you can find actionable investment ideas that will not only protect your portfolio, but help you produce outsized profits in my FREE report, The Financial Crisis “Round Two” Survival Kit.

 

This report is over 17 pages long and includes detailed analysis of why the First Round of the Financial Crisis happened, why the next round (Round Two) will be even worse than 2008, and which investments can produce triple digit winners when the market crumbles.

 

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 two other reports, one outlining how you can purchase Gold at just $350 per ounce and another featuring two investment ideas that will skyrocket as the world’s paper currencies collapse in an Inflationary Armageddon.

 

These other two reports How to Buy Gold at $350 and The Inflationary Armageddon are also available at the OUR FREE REPORTS tab on http://www.gainspainscapital.com.

 

 

 

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Mon, 08/01/2011 - 16:27 | 1514284 DogSlime
DogSlime's picture

"PS. We also feature two other reports, one outlining how you can purchase Gold at just $350 per ounce "

Wow!  That's fantastic value!  Physical delivery and everything?  How much for dilithium crystals?

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