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A Worse Divergence Than That of the 2007 Peak

Phoenix Capital Research's picture




 

The markets staged a brief dead cat bounce yesterday. We are coming up on the critical 126-day moving average (DMA), which has acted as support for the S&P 500 multiple times since the beginning of 2014.

 

 

The one exception of course was the October sell-off, which took stocks to their 280-DMA. The reason for that collapse of course was that the global economy was weakening again.

 

As much as the Federal Reserve and other Central Banks try, they cannot end the business cycle. There are always going to be downturns. That is, by definition, the nature of business.

 

The fact that the US is now entering a downturn despite the Fed spending over $4 trillion… and running a QE PROGRAM NON-STOP FOR TWO YEARS, is the reason why stocks are highly susceptible to a collapse.

 

Indeed, if we take out support here (the green line) then the ultimate downside target of 1750 comes into play based on the collapse in October 2014.

 

 

So while stocks may bounce here or hold up a week more, the market is looking HIGHLY dangerous. Indeed, based on the current pace of earnings growth, we should see a VERY serious collapse in the next few months:

 

 

The divergence is worse than that which occurred in 2007 at the last market peak. We all know what followed then.

 

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Best Regards

Phoenix Capital Research

 

 

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Fri, 03/13/2015 - 03:41 | 5884358 Dhrj
Dhrj's picture

Since the crash of 2008, It has been 7 years now and the probability of another imminent crash increases day by day . Whether this signal is plausible is another question. 

And regarding some arguments about unlimited QE, history is the evidence that it is a senseless argument, The US dollar is gonna come crashing soon , but again : How soon is another question.

 

Fri, 03/13/2015 - 01:36 | 5884279 Heavy
Heavy's picture

death rattle!!!

Fri, 03/13/2015 - 00:26 | 5884215 jomama
jomama's picture

WOLF!

Thu, 03/12/2015 - 21:36 | 5883867 Osmium
Osmium's picture

"The markets staged a brief dead cat bounce yesterday".

So tell me, what did it stage today?

Thu, 03/12/2015 - 20:41 | 5883722 Felix da Kat
Felix da Kat's picture

But of course the Fed knows it's all a house of cards. That's precisely why QE can never/will never end. Isn't it obvious by now? (p.s. They have >$500 Trillion more to go, if need be. It's virtually unlimited when its virtual money)

Thu, 03/12/2015 - 16:25 | 5882867 Crocodile
Crocodile's picture

The real danger in "fiat currency" is the fire-power it has bought in the pilitical, legal and military arena's.  There is no shortage of willing psychopaths to instruct other psychopaths to use it against a nation of psychopaths...the key thread is psychotic behavior rooted in the abandonment of the fixed moral compass once used to guide the nation. 

-Before a nation goes financially bankrupt; it first goes morally bankrupt.

Thu, 03/12/2015 - 15:56 | 5882738 Md4
Md4's picture

Phoenix...

...you can see these responses like everyone else.

Your next piece needs to address WHY we haven't suffered what you (and others) keep claiming is coming.

It's not enough to keep predicting collapse; at some point, you need to be right.

Explain or leave the prognostications alone.

Something else is going on, and either you know what that is, or you don't.

We await your next post...

m

Fri, 03/13/2015 - 06:55 | 5884443 Gold Dog
Gold Dog's picture

What Md4 said! +100

EDIT- The "all-important 126 and 280 DMA's"......WTF? I've been trading for 40 years and never heard of this key 126 DMA. Force-fit?

Thu, 03/12/2015 - 15:07 | 5882556 readyforit
readyforit's picture

F F F F Fire!!!!

Thu, 03/12/2015 - 14:55 | 5882501 atthelake
atthelake's picture

I believe a crash is coming but there seems to be a lot of scaremongering (along with warmongering) out there.

Fri, 03/13/2015 - 04:33 | 5884384 odatruf
odatruf's picture

Is it even a crash if the driver fully intended to bring the accelerating car to a sudden de-acceleration against a brick wall?

Thu, 03/12/2015 - 14:36 | 5882424 bozoklown
bozoklown's picture

the sky is falling!!!!!!! the sky is falling!!!!!!!!

Thu, 03/12/2015 - 11:59 | 5881749 graftvshost
graftvshost's picture

Maybe you'll be right this time...

Gotta happen sooner or later.

Thu, 03/12/2015 - 14:33 | 5882418 CarrierWave
CarrierWave's picture

I don;t envy the subscribers to "Phoenix Capital Research". That guy has been a perma-bear and lost incredible amount of money to anyone who followed him in the past 6 years.  Yet he never learns and keeps shorting the markets with abandon and not reading the trend properly.

Be careful from giving that nutcase your precious subscription mullah.

Thu, 03/12/2015 - 11:50 | 5881703 Bossman1967
Bossman1967's picture

Hmm been reading bullshit stories like this for years and here we are there will be no collapse in this mwrket untill the end of this fiat nightmare. No more bullshit crashes only to go higher yet again. The masters of this country will print till they cant many years judging the stupidity of all these other countries

Thu, 03/12/2015 - 10:58 | 5881493 Comte d'herblay
Comte d'herblay's picture

Key Word, rendering all else in these pieces of yours:

"yada.....""SHOULD SEE"".........yada".

WE should see a wholesale elimination of all two term incumbents in the senate yet 90% of them are re-selected by their stupid voters, who disapprove of all of them by 90%.

We should see programs like "The View"  and the laughing hyenas on GMA and TODAY attract a 2 share, an yet...

We should see interest rates on savings be at least 3% and yet.....

We should see movies like "50 Shades of shit" bomb at the box office....and yet....

Lincoln should have let the southen states secede instead of suppressing their freedom to do so, by killing and maiming and ruining 1.2 million white guys and their families to free 2 millon slaves. 2 slaves freed for every white man killed, rendered into vulture meat, and his family made destitute.

We should have seen Bill clinton hung up by his balls by NOW, but they rallied berhind him.....the very same women who would have personally hung him up by the testes if he were a republican.

Thu, 03/12/2015 - 17:17 | 5883064 ebworthen
ebworthen's picture

Good one Comte, thanks.

Thu, 03/12/2015 - 11:42 | 5881650 Alvin Fernald
Alvin Fernald's picture

When one claims someone is 'voted in' or an incumbent 'retains his seat' or there was 'an election' there should be a burden of proof to go with it.

Thu, 03/12/2015 - 10:40 | 5881429 Creepy A. Cracker
Creepy A. Cracker's picture

"Indeed, based on the current pace of earnings growth, we should see a VERY serious collapse in the next few months"

OK. I'll check back on June 01 to see how you're doing.

Thu, 03/12/2015 - 15:27 | 5882635 daveO
daveO's picture

QE ended in Oct. Not coincidentally, Japan changed their pension investment rules around that time to prop up the US market. June 1st sounds close for the hard down phase (leg). Sell in May and go away may be a little late, but not much. No QE = no more rally.

Thu, 03/12/2015 - 14:55 | 5881835 KnuckleDragger-X
KnuckleDragger-X's picture

I figure the Q1 staements will be interesting, but of course it'll all be due to weather and they'll levitate the market some more. Of course the Q2 statements wll be a bit trickier to spin and by then the ECB money helicopter will be flying hither and yon to no effect. Interesting times coming.....

Thu, 03/12/2015 - 12:05 | 5881762 Clueless Economist
Clueless Economist's picture

You doubt Graham Summers????

His newsletter advised me a major crash would happen "in a few months" in 2010, 2011, 2012, 2013 and 2014.

Because of his sage forcasts, I am now a very unwealthy man.

Thu, 03/12/2015 - 15:44 | 5882701 Kraut
Kraut's picture

They should be named "Phoenix Capital Destruction Research". Maybe they'll rise from the ashes....

Fri, 03/13/2015 - 01:25 | 5884270 tarabel
tarabel's picture

 

 

Who in the hell gets their investment advice from some old golfer dude in Arizona anyhow?

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