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”
In September, which is historically one of the months in which stock market crashes occur, the S&P 500 lost 2.6%. The Dow Jones lost 1.5% and the NASDAQ performed worst of the 3 with a loss of 3.3%. Statistics have shown September is a bad month for stocks and this September wasn’t an exception. October is also a historically bad month so a stock market crash October might be a possibility!
The most important event of September was the interest rate decision by the FED on September 17th. The continuation of ZIRP (Zero Interest Rate Policy) was already largely priced into stock prices on the rate decision day itself. What was very interesting was that stock markets ended lower after this decision. This was a very bearish signal so accordingly we sent out a signal for the From 1k to 1 Million strategy after that. This is the typical example of the drug user we used before. Stock markets need more and more of the shot to have the same effect. Only ZIRP doesn’t have effect anymore and won’t avoid a stock market crash.
Yesterday the figure everyone was waiting for was released. Everyone was watching the Non-Farm Employment Change figure, because this would influence future decisions the FED will make. The figure came out with only 142k jobs added, where 201k jobs were expected. The August revision was also way lower. This of course signals an economic slowdown. On this very bad news, stocks crashed at first, but then hope for a new QE package by the FED gave the financial markets an enormous boost. Stock markets ended higher.
Stock market crash future trading
During a stock market crash it can be very interesting to trade futures. When the VIX reaches levels of more than 60 points, options become really expensive. The VIX is a measure of volatility. Volatility rises very quickly during a stock market crash. One of the variables that determines the option price is the volatility. If the volatility is high, the price of the option will be high. Of course this is relative. An out of the money option can be cheap in absolute terms, but expensive in volatility terms.
Continue reading “Stock Market Crash October 2015 update: Zero Interest rate isn’t enough”
In August stock markets in Europe and America were very volatile. The S&P ended 6.3% lower for this month and even touched the 1868 points. The Dow Jones crashed by 6.6% and the NASDAQ, the tech index, lost 6.9%. The Dutch index, the AEX, which we also offer trading signals for, lost 10.1%. Subscribers of the AEX crash signals even reached the € 60,000 mark of the strategy. They only had 4 steps left for the € 1,000,000 mark!
The main trigger for all this unrest was China, which we warned about last month. China’s economy is slowing down and they even admitted it by devaluating the Chinese currency, the renminbi. According to China itself, its economy is still growing by 6+%, but in reality you can figure out these numbers are made up. The real number would be somewhere between 0 and 4%. You can notice this by checking China’s biggest importers. The numbers these import nations report don’t add up to the figures China is publishing. China’s stocks were crashing and took all other markets with them, including the financial markets in the west and emerging markets.
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Continue reading “Stock Market Crash Update September: China worries make the West worry”
Last week stock markets had a bad week, so our strategy showed some nice results. Followers of the AEX crash signal service already accomplished a result of € 16.000. Congratulations with this amazing return. Only 6 steps remaining till the million euro. Followers of the S&P 500 crash signal service also accomplished amazing results, but the American markets didn’t decline as fast as the European markets (yet).
What was interesting, was that the FED, which normally reacts to such stock market declines didn’t comment on the recent declines. Normally they would panic and give some hint in the form of a delay in interest rate hike. This time the only comment they gave was they don’t react on stock market declines. It is not their policy according to them, but history shows that is nonsense.
In the coming week stock markets can crash further. There are 2 possibilities for the markets to go up. One of these 2 would be a natural bounce, which markets tend to do after a big decline. The other one would be the FED leaking or commenting about a slower than expected recovering economy or something similar. This would indicate a delay in the rate hike.
You can register for stock market crash signals here.
Since June 1st the S&P went down by 0.2%, the Dow Jones went down by 1.8% and the Nasdaq went up by 1.1%.
After the no vote of the Greek people, there was some turmoil in the markets. Especially European markets were hurt by this, because fears in the market of the end of the Euro. After more debating Greece and the rest of the Eurozone eventually came to a solution. The markets unfortunately recovered. My subscribers to AEX stock market crash signals already turned € 1000 into € 8000 by then.
Continue reading “Stock Market Crash Update August: Greece saved, China next”
In May the S&P500 went up by 1.1%, the Dow Jones advanced by 1.0% and the Nasdaq surged by 2.6%.
As written last in last month’s stock market crash update, European markets remained weaker than the U.S. markets which are still nearer at all time highs. This was caused by continuing Greek problems which still aren’t solved yet.
Now there are multiple scenarios possible. One of the scenarios is that Greece won’t leave the Eurozone and Greece will obey to the demanded reforms. In this case the recent elected socialist government will lose face, because they will have to do drastic (liberal orientated) cost cuts which they promised they wouldn’t. In addition to that the Greek economy and financial markets would be slammed and repayment of the debt would still be impossible for the Greeks. The problems of impossible repayment would return at a later stage. Initially this scenario is better for the rest of Europe and European banks, but it would only delay problems to a later stage. This scenario is highly unlikely.
The second scenario also consists of Greece (partly) obeying to the demanded reforms plus a large percentage write off of the Greek debt. This is a more preferable scenario for the Greek government. They would probably obey to such measurements, because in this case they would save they country from a bankrupt which would put the country back 20 years in time. Naturally this scenario is less preferable for the rest of Europe and the European banks initially. The write offs would cause huge losses for European banks which would put the European bank stocks down the drain. This would also be a trigger for the ECB to start printing even more money which would be bullish for stocks. In our opinion this is the most likely scenario.
Continue reading “Stock Market Crash Update June: Game theory applied to a possible Grexit”
In April the S&P500 went up by 0.8%, the Dow Jones advanced by 0.3% and the Nasdaq surged by 0.8%.
In last month’s update we spoke about the U.S. economy weakening. This is now confirmed by the official number which was revealed last month. GDP in Q1 only grew by 0.2% instead of the expected 1.0%. Afterwards Yellen talked hawkish, saying that this GDP miss was due to bad weather and only temporarely. The financial market didn’t seem to believe her as the EUR surged against the USD. So it seems market participants are already pricing in a longer 0% interest rate in the U.S.. This surge of the EUR could also be a normal correction in a longer term movement.
Atlanta FED which predicted the Q1 GDP number last month already lowered their prediction for Q2 from 3.3% to 0.8%, so this would definitely mean a longer period of 0% interest in the U.S and a longer surge in the EUR/USD. European markets already were slammed by last week’s EUR/USD surge, so this could mean more weakness in these markets.
These developments create chances to perform the From 1k to 1 Million strategy on European markets.
Signals on European markets can also be provided by our Stock Market Crash Signal Service from now on.
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