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4 Charts Show Why This Rally May Become A Rout!
Submitted by Harry Dent via EconomyandMarkets.com,
There’s a reason why I warn you to get out of a bubble a little early rather than a little late. It’s because the first wave down tends to happen in a matter of a few weeks or months, sometimes days. It’s fast and furious.
I know this because I’ve studied every major bubble in modern history – all the way back to the infamous tulip bubble in 1637, when a single tulip cost more than most people made in a single year! And what I’ve seen in each case, without exception, is that bubbles do not correct in nice stair steps when they’re coming off their highs. They burst, crash, collapse, clatter, clang – however you want to say it!
When the bubble deflates, it typically crashes 50% minimum to as high as 90%. But it’s that first wave down that can wipe out 20% to 50% right off the bat!
Below I have four charts that make the argument for me.
They show the 1929 bubble burst… the 1987 crash… the 2000 “Tech Wreck”… and the latest of 2015 from the Red Dragon itself – China’s Tsunami.
In each case, the fact that these bubbles were destined to burst were only obvious to the few that weren’t in denial. Most give into the bubble logic that new highs are the new norms. They think: “This time is different.” It’s not! It never is.
It’s always hard to predict exactly when bubbles will peak and crash. It’s like dropping grains of sand on the floor. A mound will build up – becoming like a Hershey’s kiss that grows more narrow at the top. At some point, one grain of sand will cause the avalanche. Who knows which grain of sand that one will be!
Here are those charts. Like I said, they speak for themselves!
What does that tell you!? EVERY bubble bursts. Bam, pow – no exceptions! So hopefully you understand why I keep harping on about this.
I’m just as amazed as anyone that this global bubble has gone on as long as it has. But it’s finally started to crash.
You can tell by following a series of recent tops in major markets:
Transports in November…
Utilities in January…
Germany’s DAX index and Britain’s FTSE in April…
What looks to be the Dow and S&P 500 in May…
China’s Shanghai index in June…
And the Nasdaq looks to have peaked in July.
Now that we’re in the classic “crash season,” the situation only looks worse. This season technically started in mid-August, and won’t end until mid-October. This is not to say the chaos won’t continue later on into the end of this year. It just means the worst decline, this first wave down, is likely to come in the next several weeks.
So consider this current bounce a gift. The signs are all there that this global bubble is done. Use this time to get out of any passive investments in stocks.
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Rally?
ok, i am selling tmrw......now should i put the proceeds in bitcoin or usts?
yes
Thanks for telling us when it will end......we'll get back to you on that
The fight club prefers barbaric relics of the past. Shiny stuff will stand the test of time, paper is just paper no matter what.....
Just BTFD - the PPT has you covered.
Dent will be right one day
Uh oh, looks like Harry down voted you. IMO, they want a market crash before years end to justify more printing ahead of elections.
But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
Counterfeiter in Chief.
No one will fight this insanity because they are either debt slaves or owners. Us gold bugs don't even register on the radar yet.
Betcha the VIX is monkey hammered into the close on Friday.
I'll take that bet,....and gladly pay you next Tuesday, if i can get my hamburger today......
If and when the next BIG crash happens, I wonder if that will be the day the government tries out the giant internet disconnect switch?
Now that is a very scary thought. What would we do if the market was crashing and we couldn't get online to close out any positions?
load up on booze just in case
The bigger question is what would we do if the market were crashing and we weren't able to surf porn???
Don't be frightened. Think about it, their communication runs on those very same rails. Their Propaganda runs on those rails. They know vital services and business run on those rails. How would they get their tax money, or pay their goons, or EBT folks? They depend on the Internet too much to shut it down. Every developed country on earth depends on it and they wouldn't be very happy. So don't be frightened, it won't happen.
The US government has the SIPRNet to fall back on. It would be clunky and a public disaster, but the government actually has contingencies in place to run without the internet functioning.
Unless another country decides to turn the lights out on us via an EMP or large scale cyber attack. The military moved back into montains of Cheyenne just this summer to protect against such a threat. Curious timing.
If we start seeing really large protests against the system they'll try disruption of service and if that doesn't slow it down, then full shutdown, cell and net with the MSM going full Goebbels.....
With The US holiday Monday and China closed, This weekend would be a possibility
no nikkei? dat's rayciss!
This crash is gonna leave a holio in your portfolio!
This guy is absolutely amazing. He predicted the August crash 3 weeks before it hit. See for yourself https://www.sentimenttiming.com/antoemang/20
put options, shorting stocks, inverse etfs, call options on volatility... and moar
60% Stock CRASH Still Ahead | Jerry Robinson
http://www.youtube.com/watch?v=HPo6U3PsEh4 (31:20)
Heard elsewhere... "surprisingly, it's not even illegal"
Dude yo you have to contact the FED's programmers if you want to know what is going on with the markets.
"May become" talk about a hedge. Pick a side and nut up.
Only a financial advisor that is not retiring soon would tell you to stay in the stock market “because it only took 5 years to recover the loss of the last recession”.
Here are some more signs of a recession.
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record...
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
http://michaelekelley.com/2015/02/24/would-you-pay-39-more-than-asked/
http://www.zerohedge.com/news/2015-07-27/when-will-we-ever-learn/
Here is how to respond.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
Up like an escalator, down like an elevator.