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Graham Summers’ Weekly Market Forecast (Wake Up Call Edition)
So the financial world has collectively woken up and realized that the latest EU bailout scheme is fraught with problems and loose ends. Amongst the various problems are:
1) The Greek private bondholders are furious that the ECB isn’t taking a haircut on its bonds too.
2) German courts and voters aren’t too pleased with Merkel’s decision to go “all in” on the Euro experiment.
3) The Greek default isn’t nearly large enough to render Greece solvent again
4) The default has set a precedent for the other PIIGS countries to follow
5) The CDS/ derivative issue regarding Greece’s default is not over by any stretch
6) The entire EU banking system remains far too leveraged (26 to 1) and needs another $1.5+ trillion in capital at the minimum.
The markets flew into this deal based on rumors and short-covering and are now waking up to the plain obvious facts that you cannot solve a debt problem with more debt. Also, it might be worth considering just where the EFSF bailout money will be coming from when various EU members can’t even stage successful bond auctions without the ECB stepping in.
Again, the primary issue for the EU is a lack of capital. There is TOO MUCH debt there. And issuing more debt, no matter how cheap, is not going to help. Especially when your strongest member (Germany) sports a REAL debt to GDP above 200% and hasn’t recapitalized its banks.
So the EU will be crumbling in the coming weeks. This was the final hurrah for the EU and the Euro in its current form. On that note, the Euro was rejected at resistance at 142 and has already taken out support at 140.

Once we take out 139, look for this breakdown to pick up steam (pulling stocks with it).

Indeed, the financial world is talking about how this was the biggest move in stocks since 1974. Unfortunately, few remember that after that move in 1974, the markets cratered.
Some thoughts on stocks… isn’t it a little strange that the market fell exactly 20% (the “official” bear market level) before kicking off the biggest ramp job in 30 years? How about the fact that this move came for no real reason other than rumors of another bailout (what are we on #3 for this?).
Can this move really be attributed to Euro choosing to let Greece default (which is what happened in reality)?

Regardless, stocks were deflected from resistance at 1,275 or so. They’re now on their way down again. The market is extremely overbought and susceptible to a fast violent move downwards.
Indeed, the credit markets remain jammed up and are anticipating even more haircuts from Greece. And the rest of the PIIGS will be following suit in the default game.
Ignore stocks, they’re ALWAYS the last to “get it.” The credit markets are jamming up just like they did in 2008. The banking system is flashing all the same signals as well.
So if you have not already taken steps to prepare for systemic failure, you NEED to do so NOW. We're literally at most a few months, and very likely just a few weeks from Europe's banks imploding.
What happened in 2008 was literally just the warm up. The REAL DEAL is coming in the next 14 months. And it’s going to involve corporate, financial, and sovereign defaults.
On that note, if you’re looking for specific ideas to profit from this mess, 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).
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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.
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You can't forecast retrospectively. I'd rather read Phoenix than listen to CNBC.
So far it's playing out as GS has said, can't say fairer than that.
There was once a lady who was sure she had cancer. She would visit her doctor every 6 months and the doctor would give her a clean bill of health. 50 years later, she developed cancer and she looked that doctor straight in the eye and said "see I told you so". This reminds me of Graham Summers. Can anyone honestly say they have benefited from this guy? I am certain there are many who have lost money listening to his rants... Oh well, keep posting Graham, you will eventually be right! How much do you pay ZH to have them post this garbage?
What alarms me is the giant topping process.. its setting up for big declines. It is 2007/08 all over again. The alarm has gone off time to profit from it.
Schtocks don't go up 20 % in a month in Bull markets, but do in Bear Mkt.
How's that 'proven' crash indicator graham? Is it still flashing red like a madman?
Its going to get uugly..liquidity nonexistant.
virgil's year end forecast.. S/P @ 1000. We will see the March 09 levels (sometime) in 2012.
This is has always been a time bomb waiting to go off. The vast majority of financial professionals belive the basic tenents of economics as espoused by the Fed/banking establishment. Unfortunately, its total rubbish. A third grader can undestand you can't fix a debt crisis with more debt, just like you can't fix a flooded basement with more water.
Everything our leaders ahve done to date has been wrong. Once that gains critical mass, there wil be a phase change of galactic proportions. But these things take time, and you just sit there waiting for it to happen, knowing that evey day that goes by will make it worse. Even then predicting what will happen is impossible. Politicians may see the light, or they may be so compromised they can't change directions. If they can't shift directions, only a social revolt can cause sufficient changes. Then, cleaning up the mess correctly won't be easy either. Finally, we need a new finacial architecture. Good luck getting TPTB to go along with anything that prevents them from becoming billionaires.
SPX 1242 in in first hour AH.. the real fun starts after school.
Graham,
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.
Graham, I gave you my email address over a week ago,your site said I would recive the FREE REPOTS within 24hrs.
This is week TWO, no reports YET?.
Oh, you'll get reports. They'll be from whoever he sold your email address to.
I would say, at best, some sideways churning. But soon enough this market is going DOWN in a big way....thanks to the eURo.
soon to be margin call edition
Market is behaving like somone is intervening on the downside moves intraday.
There is some upside left. Don't turn bearish too early.