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The Single Biggest Driver For Stocks Is Collapsing
The markets are primed for a very serious correction… possibly even a Crash.
Earnings are what drive stocks. Investors sometimes forget this during periods of speculative manias such as the one we’re experiencing today. But the reality is that there is no rational reason to buy a stock (company) other than to share it its profits via Earnings or Dividends.
With that in mind, consider that Earnings and Sales are both rolling over sharply. The below chart from Societe General illustrates this point nicely. Also note that we are rapidly approaching a period in which Year over Year changes in both metrics are negative.

Moreover, this is occurring at a time in which stocks have rallied far higher than earnings warranted.
Earnings Per Share or EPS leads stock prices as the below chart shows. Note the large divergence that occurred in 2007 at a time when EPS rolled over (EPS is the blue lines). We all know what came after this (2008).

Now look at the massive divergence occurring today (the right black square). It makes the 2007 divergence look small by comparison!
Stocks are more stretched than at any point in the last 10 years. At the very least we should see a 10-15% correction if not an outright Crash in the coming months.
And yet, 99% of investors will ignore the clear warnings today… just as 99% ignored the warnings in 2007 and 1999.
Smart investors should take note of this now. It is a MAJOR red flag to be watched closely.
If you've yet to take action to prepare for this, we offer a FREE investment report called the Financial Crisis "Round Two" Survival Guide that outlines simple, easy to follow strategies you can use to not only protect your portfolio from it, but actually produce profits.
We made 1,000 copies available for FREE the general public.
As we write this, there are less than 50 left.
To pick up yours, swing by….
http://www.phoenixcapitalmarketing.com/roundtwo.html
Best Regards
Phoenix Capital Research
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Fundamentals are so passe. Can't our friends in finance and banking just print and conjure up some profits?
Yup, anytime now.
Fundamentals will come into play when TPTB think its due. They use every trick in their book to keep this baby floating, on a sea of shit.
But there will be a day I guess when 'they' decide to let the market have some of its own head, and its a long down hill ride/cliff.
Yes, when they have transferred as much of the means of production to themselves and are ready to allow their sheeple serfs to put the rented assests to use I order to make them valuable again.
Perception is reality; it is why the market goes up and the dollar still has a leg. Once faith is lost, then "BOOM"!
> Earnings Per Share or EPS leads stock prices as the below chart shows.
What? Look at the chart. The green dotted line is "Prices." The blue solid line is "12 Mo Forward EPS."
In the first area identified prices turn down way before the EPS does. And it looks like the current block is doing the same thing. What is he talking about?
Oh look. It's Phoenix Capital Research again. Of course.
fundamentals are irrelevant. if "the market" goes down it will be because that is what the fed gangsters want. mr. yellen sets the price.
Fundamentals are irrelevant; and you have to feel sorry for the people who try to make sense out of them. Markets are an expression of mass emotionalism. They go up until fear overtakes greed and then t hey go down. They always over-react, that is go farther than necessary. This one is cooked, now; you can put a fork in it.
Your description is a classic example found in Marketing textbooks; specifically Consumer Behavior textbooks.
"Earnings are what drive stocks."
that used to be true, now its greed, manipulation, hft, btfd, stock buybacks, sleight of hand accounting and all the related bs.
earnings are the result of building a product and selling it.
where is the ussa in this scenario.
service industries do not add to the economy. they are parasites.
earnings drive stocks, in your dreams
lol.
Making and selling goods and services while embedded in supply chains that respond to the price signals of freely choosing consumers. What a dreary main street world view (the competition, the horror) definitely beneath the the ilk of Masters of the Universe.
Just buy back enough stock, corporations, and the EPS can still go up, even with cratering sales.
Shhhh, don't give away apple's EPS strategy.
But they've taken it to a whole other level by borrowing against their own cash stash to buy back their stock.
As we write this, there are less than 50 left.
From the comments so far, that is probably more than sufficient.
50 what? boxes, stacks, pallets?
I picture a large storage room filled to the rafters and when someone calls desperately trying to get one of those last 50, the order clerk mumbles "yeah, there's just a few left."
Just do as the infomercial says and all will be just dandy.
No Crash ever. They have a printing press. Any serious sell off would be mopped up by the Fed Equities desk. The idea of a one day or several day crash happening show little understanding of our so called markets. All markets are manipulated and the stawk market is the worst.
What will bring it all down is losing the "Reserve Currency" status, thus we are out fucking with Russia, the Middle East and whoever else is even thinking of dumping the dollar or creating its replacement.
The FED has complete control. Markets don't exist in the real sense. Price discovery in the stawk market? lol!
China manipulates pretty much everything and look what happened to their market the last few weeks. Not to say it won't bounce.
You just explained the purpose of the US Military and the conveniently created "War on Terror"; the perfect war that has no end and the enemy has no face; therefore it can be anyone's face they desire...including ours. Note the US Military recruiting commercials now call the military "a global force". That is true, out military has been outside the bounds of the Constitution since WWII and that is questionable as well. Bankers, Lawyers and Politicians...for whom the military fights.
and they are tugging at our heartstrings with the 4th of July themed ads, complete with 'Pledge of Allegiance' Son looks up to Dad to see if he has got it down. brings a tear to your eye
I pledge allegiance to the flag
of the corporate states of America.
And to the stockholders, for the plutocracy which they stand,
one nation, under Mammon, socially divisible,
with liberty and justice for some.
A sponge can only contain so much blood until it starts to seep out the bottom.
Turnips and rocks don't make good sponges.
Just a bit of public service credit against my sentence.
If it wasn't for the BoJ buying equities, the Nikkei would be in free fall.
Last month I took your advice and went triple short with my children's college tuition money, pawned my GF's sizaeable engagement ring, took out a mortgage on my paid off home, liquidated my hard valuable assets, like '89 Porsche 930 Turbo, the Beemer motorcycle, my Black Lab puppy, and am renting out my brilliant child to neighbors in need of a SAT coach for their kids at $2,000 a pop.
I am at this date at least 25% less well off than I was last month at this time. Thank god for the kid.
onE tRick pOny
It's not really "investors" who are buying this market. It's mainly just three main buying groups: the FED (via its criminal agents like Goldman, Citi and JPM), insurance companies who have a monthly influx of funds that they have to do something with, and pension funds who also have a monthly influx of funds that they have to do something with.
A word of advice to the latter two... "being in cash is a position". To the pension funds, for Christ's sake, do something responsidble for a change and get your investors into cash. You won't get fired for that. Or will you?
I think certain funds are only allowed to go 3-5% cash or something stupid.
Really? I didn't even know that. I thought they were completely autonomous. Talk about a convenient ocean of bagholders.
There is still many companies on the buy back wagon as well.
True enough. They are definitely contributors although they have targets that, once reached, their contribution will end. But you're right.
Thank you for this insight.. I believe you have been recommending to get out of the stock market for at least two years..I did.. did not make any money.. so I cry myself to bed every night..but at least my money is safe..your timely advice is appreciated...
Money is only good for buying stuff. Life is not about buying stuff, now is it, really? Life is not what they want you to believe it is.
Back when I still had a tiny bit of optimism I would have said a big correction would get their attention and let them fix their problems. Now I just wanna watch the world burn since they aren't going to fix anything, just paper over the cracks with more worthless money......