This January was one of the worst starts of stock markets worldwide. The S&P crashed by 5.2%, the Dow Jones lost 5.6% and the Nasdaq declined by a staggering 7.9%. Finally the FANG stocks, which seemed to be impossible to go down, went down and the rest of the stock market followed. Critical levels were broken in the FANG stocks which made them crash. The rate hike by the U.S. finally affected the markets. We expect the stock market decline to accelerate in the coming months. We think this is one of the best moments to start subscribing for stock market crash signals! Click here to subscribe.
Last month’s prediction starts unfolding
As predicted last month stocks started at the decline of 20% to the 1550-1750 level. During the 20th of January an intraday low of 1814 points was reached for the month January. For now we bounced back to 1930 points. We expect this bounce to be almost over. This bounce was largely driven by the unexpected move of the Bank of Japan to lower interest rates to negative territory. A week before this announcement the chairman of Bank of Japan denied they would lower interest rates which made it so influential for the stock market. It wasn’t expected by market participants.
Continue reading “Stock Market Crash February 2016 update: It All Starts Falling Down”
In December the S&P 500 finished 2.8% lower, the Dow Jones ended 2.6% lower and the Nasdaq closed 2.9% lower. The most important event of December was the rate hike by the FED. The U.S. interest rate was finally hiked with 0.25%. We think the FED did the rate hike at one of the worst possible moments in time. Everywhere are signals the world economy is just starting to slow down even quicker. The FED signed for the death sentence of the U.S. stock market. The traditionally strong year end for stock markets was already weaker than average. We expect the stock market decline to accelerate in the coming months. We think this is one of the best moments to start subscribing for stock market crash signals! Click here to subscribe.
We expect nearly all economies around the world to slow down. In America, we have had nearly six or seven years without a correction in the economy or the markets. It is long overdue. Normally, we have corrections every four to seven years in the United States. So we are overdue. The debt is going higher and higher. Many of the U.S. customers are slowing down—China is slowing down and Japan is in recession. Now, we certainly expect more slowdown to come worldwide.
Continue reading “Stock Market Crash January 2016 update: After rate hike scenario”
In November the S&P 500 went up by 0.1%. The Dow Jones performed better than the S&P 500 and gained 0.4%. Lastly the Nasdaq outperformed both the S&P and Dow Jones by gaining 1.1%. It seems the S&P 500 is having trouble with reaching new all time highs. The last all time high was reached in July this year, but since then stocks didn’t have the power to push through this level anymore. Stocks are losing more and more momentum; you see less and less stocks trading at all time highs. The indices are pushed higher by just a small percentage of stocks. Usual suspects like Google, Apple, Facebook and Amazon are among these stocks.
Terrorist attack Paris
Then there was the sad news of the terrorist attack in Paris. It costed more than 120 innocent people their lives. Surprisingly stock markets went up the days after this sad news. After 9/11, stock markets crashed but it seems market participants are less afraid of similar attacks now. Another theory is that market participants think the Central Banks will use it as an excuse to not raise interest rates. However, since we know FED members keep an eye on the stock market level, there is a very good chance the FED will raise the interest rates in December by 12,5 or 25 basispoints. The stock market is still at a good level for hiking.
Continue reading “Stock Market Crash December 2015 update: Terrorist Fear and Stock Market Expectations”
The S&P 500 surged an amazing 8.4% in October, which historically is a bad month for American and European stock markets. The Dow Jones gained 8.5% and the Nasdaq went up by 9.5%. VIX went down by 34.8% which gives subscribers new opportunities to start the From 1k to 1 Million strategy. Index options are relatively cheap again thanks to this low volatility, which is one of the value determining components of the Black and Scholes option pricing model.
ECB and PBOC
Reasons for this surge of stock markets were hints of more QE by Mario Draghi of the ECB and a completely unexpected interest rate cut by the Chinese central bank. Draghi mentioned QE will be continued until September 2016 or beyond if needed. Also a deposit rate cut was discussed. The ECB also has the options to expand the monetization limit or to expand their QE program to other securities. Besides the possible expansion of the ECB’s QE package, the Chinese central bank cut the 1 year lending and deposit rates by 0.25%. China also cut the banks’ reserve requirement ratio. Both these positive stimulants caused the S&P to surge in a quick and unhealthy way. Possibly the S&P will make a new high like in October 2007, which was only 1% higher than in the high in July 2007, several months earlier. If there will be a new high it will only be remotely higher than the previous all time high just like in 2007.
Continue reading “Stock Market Crash November 2015 update: ECB and PBOC to the rescue”