Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
What ECB’s Tiering Means for Gold - 17th Nov 19
DOJ Asked to Examine New Systemic Risk in Gold & Silver Markets - 17th Nov 19
Dow Jones Stock Market Cycle Update and are we there yet? - 17th Nov 19
When the Crude Oil Price Collapses Below $40 What Happens? PART III - 17th Nov 19
If History Repeats, Gold is Headed to $8,000 - 17th Nov 19
All You Need To Know About Cryptocurrency - 17th Nov 19
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19
Gold and Silver - The Two Horsemen - 11th Nov 19
Towards a Diverging BRIC Future - 11th Nov 19
Welcome to the Zombie-land Of Stock Market Investing - 11th Nov 19
Illiquidity & Gold And Silver In The End Game - 11th Nov 19
Key Things You Need to Know When Starting a Business - 11th Nov 19
Stock Market Cycles Peaking - 11th Nov 19
Avoid Emotional Investing in Cryptocurrency - 11th Nov 19
Australian Lithium Mines NOT Viable at Current Prices - 10th Nov 19
The 10 Highest Paying Jobs In Oil & Gas - 10th Nov 19
World's Major Gold Miners Target Copper Porphyries - 10th Nov 19
AMAZON NOVEMBER 2019 BARGAIN PRICES - WD My Book 8TB External Drive for £126 - 10th Nov 19
Gold & Silver to Head Dramatically Higher, Mirroring Palladium - 9th Nov 19
How Do YOU Know the Direction of a Market's Larger Trend? - 9th Nov 19
BEST Amazon SMART Scale To Aid Weight Loss for Christmas 2019 - 9th Nov 19
Why Every Investor Should Invest in Water - 8th Nov 19
Wait… Was That a Bullish Silver Reversal? - 8th Nov 19
Gold, Silver and Copper The 3 Metallic Amigos and the Macro Message - 8th Nov 19
Is China locking up Indonesian Nickel? - 8th Nov 19

Market Oracle FREE Newsletter

How To Buy Gold For $3 An Ounce

Stock Market Death Cross, It is 1932 All Over Again

Stock-Markets / Stocks Bear Market Jul 07, 2010 - 03:05 AM GMT

By: Dr_Jeff_Lewis

Stock-Markets

The Great Depression is a time that stands out as a time of great debate.  During the Great Depression, FDR acted nearly exactly as we have in the Great Recession, expanding the size and scope of the government and pushing through new spending bills to incite economic activity.   However, as the dust begins to settle from the first boom, investors are again looking for the bust.


The Dow Shows Weakness

The Dow Jones Industrial Average is repeating history all over again, forming the dreaded head and shoulders technical pattern that first sent stocks into a second bear market in 1932, following a few short years of stimulus-driven recovery.  In 2007, the Dow Jones Industrial Average formed a head and shoulders pattern, and a bear market followed, just as it had 78 years earlier in 1929.  Today, the Dow Jones has formed another head and shoulders, just as it had following recovery in 1930 in which the stock markets prepared for another down leg.  However, if those technical indicators aren't enough to send you screaming sell, take a look at what traders like to call the “death cross.”

The Death Cross

Known as the “death cross,” investors look for a very important technical indicator to point the future for the markets.  The “death cross” is actually made up of the 50 and 200 day moving average.  When the 200 day moving average crosses above the 50 day moving average, as it soon will, the market is said to go bearish.  When the 200 day moving average is below the 50 day moving average, the market will soon rise. 

Currently, the two moving averages are less than 10 points apart on the S&P 500 index, showing that with just a modest dip in the stock market, we can expect an even deeper plunge ahead.  The death cross has become even more powerful as more investors trade more technically than they ever have before, and with just one little X, the whole market could enter into a massive selloff.

Metals to Prosper

The most popular trade following a “Death Cross” is a flee from stocks and equities into hard assets and deflation-resistant debt obligations.  Should the death cross come to bear, expect a selloff in equities, followed briefly by an increase in activity in the Treasury markets, and then eventually a move to hard assets like gold, silver, and other commodities. 

Investors should expect that the physical markets will be the first to move, with a strong appetite for physical gold at $1,200 an ounce originating in Asia, as well as small time players gobbling up silver at near $17 per ounce.  Both those prices, just ticks from today's prices, are solid support levels, allowing for virtually no drop in either commodity before buying interest takes over selling interest. 

Today's prices may be the very cheapest that we'll see for precious metals in quite some time, especially with demand nearly maxed out even at $17 for silver and $1200 for gold, two prices far higher than this time just one year ago.

By Dr. Jeff Lewis

Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com and Hard-Money-Newsletter-Review.com

Copyright © 2010 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules