Peak Of The Market

Those that watched their stocks steadily increase in value for years are now seeing all of that “wealth” disappear at a staggering pace. The only way you actually make money in the stock market is if you get out in time, and many Americans are discovering that all or most of their gains have already been wiped out. At this point, the Dow Jones Industrial Average has dipped below where it was at the end of the 2013 calendar year. That means that nearly two years of gains have already been obliterated. On Friday, the Dow was down another 272 points, and it is now down more than 2200 points from the peak of the market back in May. For months, I have been detailing how things were setting up for this kind of financial crash in textbook fashion, and now events are playing out just as I warned. But this is just the beginning – what is coming next is going to shock the world.

We have already seen the 8th largest and 10th largest single day stock market crashes in all of U.S. history happen within the past few weeks. In fact, it was actually the very first time that we have ever seen the Dow fall by more than 500 points on consecutive trading days.

On August 25th, I warned that there would be some huge rebound days where we would see lots of “panic buying”, and on August 26th we witnessed the 3rd largest single day stock market increase in all of U.S. history.

Headlines all over America trumpeted the “fact” that the stock market had “recovered”, but the mainstream media failed to mention that the only two better days for the stock market were right in the middle of the stock market crash of 2008.

In this article, I explained that this is exactly the type of market behavior that we expect to see during a full-blown market meltdown. There are going to be even more violent swings in the market in the weeks ahead, but the general direction will be down.

Friday was definitely another down day. The following is how Zero Hedge summarized the carnage…

Dow Industrials lowest weekly close since April 2014
Dow Transports lowest weekly close since May 2014
S&P 500 lowest weekly close since Oct 2014’s Bullard lows
Nikkei dumped over 7% this week – worst week since April 2014
Utilities collapsed 5.1% this week – worst week since March 2009
Financials lowest weekly close since Oct 2014’s Bullard lows
Biotechs lowest weekly close since Feb 2015
Investment Grade Corporate Bond Spreads worst since June 2013
Treasury Curve (2s30s) flattened 6bps today – biggest drop in 2 weeks.
JPY strengthened 2.4% on week against the USD – strongest week since August 2013 (up 4.5% in 3 weeks) – major carry unwind!

I wish I could tell you that things are going to get better, but I can’t do that. There are some giant financial bubbles that are starting to unwind, and this process is going to take time to fully unfold.

And this is truly a global phenomenon. Chinese stocks have been crashing horribly, Japanese stocks just had their worst week in over a year, Canada and much of South America are plunging into recession, and Europe is probably in worse shape than everyone else if you look at the fundamentals.

Even though U.S. stocks have already fallen substantially, the truth is that they easily have much farther to fall. Yale economics professor Robert Shiller believes that we could actually soon see the Dow plunge all the way to 11,000…

In what amounts to an ominous message for Wall Street, Robert Shiller, a Yale economics professor and author of Irrational Exuberance, doled out some serious bear talk this morning.

Shiller told CNBC Thursday morning that “this is a dangerous time” for the stock market.

Shiller, who has a reputation for calling market tops, warned that the Dow Jones industrial average, which closed Wednesday at 16,351, could fall as low as 11,000, a potential drop of more than 30% from current levels.

At the moment, the Dow is sitting just above 16,000, which is an exceedingly important psychological level.

If the Dow breaks below 16,000 and stays there for a few days, it is quite likely that full-blown panic will set in.

And once we see the Dow dip below 15,000, people will be going insane.

Another key indicator to watch is the VIX (the CBOE Volatility Index). If you are not familiar with the VIX, here is a pretty good definition from Investopedia…

The ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward looking and is calculated from both calls and puts. The VIX is a widely used measure of market risk and is often referred to as the “investor fear gauge.”

Right now it is sitting at 27.80. If the VIX rises above 40 and stays there, that will be a major red flag.

We have entered “the danger zone“, and events are going to start moving very rapidly now. If you have been listening to the warnings, you are going to understand why things are happening and you are going to know what to do.

Unfortunately, most people are going to have that “deer in the headlights” look because they will not understand what is happening and they will be frozen by fear.

Stay tuned to this website and to End Of The American Dream because things are about to get very weird and I will do my best to explain them as the coming weeks and months play out.

So what do you think the rest of September will bring?

Please feel free to join the discussion by posting a comment below…

That didn’t take long. On Monday, the Dow was down another 326 points. Overall, the Dow has now fallen more than 1000 points from the peak of the market (16,588.25) back in late December. This is the first time that we have seen the Dow drop below its 200-day moving average in more than a year, and there are many that believe that this is just the beginning of a major stock market decline. Meanwhile, things are even worse in other parts of the world. For example, the Nikkei is now down about 1700 points from its 2013 high. This is causing havoc all over Asia, and the sharp movement that we have been seeing in the USD/JPY is creating a tremendous amount of anxiety among Forex traders. For those that are not interested in the technical details, what all of this means is that global financial markets are starting to become extremely unstable.

Unfortunately, there does not appear to be much hope on the horizon for investors. In fact, troubling news just continues to pour in from all over the planet. Just consider the following…

-Major currencies all over South America continue to collapse.

-Massive central bank intervention has done little to slow down the currency collapse in Turkey.

-Investors pulled more than 6 billion dollars out of emerging market equity funds last week alone.

-The CBOE Volatility Index (VIX) has risen above 20 for the first time in four months.

-Last month, new manufacturing orders in the United States declined at the fastest pace that we have seen since December 1980.

-Real disposable income in the United States has just experienced the largest year over year drop that we have seen since 1974.

-In January, vehicle sales for Ford were down 7.5 percent and vehicle sales for GM were down 12 percent. Both companies are blaming bad weather.

-A major newspaper in the UK is warning that “growing problems in the Chinese banking system could spill over into a wider financial crisis“.

-U.S. Treasury Secretary Jack Lew is warning that the federal government could hit the debt ceiling by the end of this month if Congress does not act.

-It is being reported that Dell Computer plans to lay off more than 15,000 workers.

-The IMF recently said that the the probability that the global economy will fall into a deflation trap “may now be as high as 20%“.

-The Baltic Dry Index is now down 50 percent from its December highs.

If our economic troubles continue to mount, could we be facing a global “financial avalanche” fairly quickly?

That is what some very prominent analysts believe.

Below, I have posted quotes from five men that are greatly respected in the financial world. What they have to say is quite chilling…

#1 Doug Casey: “Now is a very good time to start thinking financially because I’m afraid that this year, in 2014, we’re going to go back into the financial hurricane. We’ve been in the eye of the storm since 2009, but now we’re going to go back into the trailing edge of the storm, and it’s going to be much longer lasting and much worse and much different than what we had in 2008 and 2009.”

#2 Bill Fleckenstein: “The [price-to-earnings ratio] is 16, 17 times earnings,” Fleckenstein said on Tuesday’s episode of “Futures Now.” “Why would you pay 16 times for an S&P company? I don’t care about where rates are, because rates are artificially suppressed. Why isn’t that worth 11 or 12 times? Just by that analysis, you’d be down by a quarter or 30 percent. So there’s a huge amount of downside.”

#3 Egon von Greyerz of Matterhorn Asset Management: “Nothing goes (down) in a straight line, but the emerging market problems will accelerate and it will spread to the very overbought and the very overvalued stock markets and economies in the West.

So stock markets are now starting a secular bear trend which will last for many years, and we could see falls of massive proportions. At the end of this, the wealth that has been created in the last few decades will be destroyed.”

#4 Peter Schiff: “The crisis is imminent,” Schiff said. “I don’t think Obama is going to finish his second term without the bottom dropping out. And stock market investors are oblivious to the problems.”

“We’re broke, Schiff added. “We owe trillions. Look at our budget deficit; look at the debt to GDP ratio, the unfunded liabilities. If we were in the Eurozone, they would kick us out.”

#5 Gerald Celente: “This selloff in the emerging markets, with their currencies going down and their interest rates going up, it’s going to be disastrous and there are going to be riots everywhere…

…So as the decline in their economies accelerates, you are going to see the civil unrest intensify.”

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Those that do not believe that we could ever see “civil unrest” on the streets of America should take note of what just happened in Seattle.

After the Seahawks won the Super Bowl, fans celebrated by “lighting fires, damaging historic buildings and ripping down street signs“.

If that is how average Americans will behave when something good happens, how will they act when the economy totally collapses and nobody can find work for an extended period of time?

We are rapidly approaching another great financial crisis. Unfortunately, we didn’t learn any of the lessons that we should have learned last time. It is being projected that the debt of the federal government will more than double during the Obama years, the “too big to fail banks” have collectively gotten 37 percent larger over the past five years, and the big banks have become more financially reckless than ever before.

When the next great financial crisis arrives (and without a doubt it is inevitable), millions more Americans will lose their jobs and millions more Americans will lose their homes.

Now is not the time to be buying lots of expensive new toys, going on expensive vacations or piling up lots of debt.

Now is the time to build up an emergency fund and to do whatever you can to get prepared for the great storm that is coming.

As you can see from the financial headlines, time is rapidly running out.

Stock Market Crash 2015: The Dow Has Already Plummeted 2200 Points From The Peak

The Dow Has Already Fallen More Than 1000 Points From The Peak Of The Market