Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
The Copper/Gold Ratio Would Change the Macro - 21st Oct 20
Are We Entering Stagflation That Will Boost Gold Price - 21st Oct 20
Crude Oil Price Stalls In Resistance Zone - 21st Oct 20
High-Profile Billionaire Gives Urgent Message to Stock Investors - 21st Oct 20
What's it Like to be a Budgie - Unique in a Cage 4K VR 360 - 21st Oct 20
Auto Trading: A Beginner Guide to Automation in Forex - 21st Oct 20
Gold Price Trend Forecast into 2021, Is Intel Dying?, Can Trump Win 2020? - 20th Oct 20
Gold Asks Where Is The Inflation - 20th Oct 20
Last Chance for this FREE Online Trading Course Worth $129 value - 20th Oct 20
More Short-term Stock Market Weakness Ahead - 20th Oct 20
Dell S3220DGF 32 Inch Curved Gaming Monitor Unboxing and Stand Assembly and Range of Movement - 20th Oct 20
Best Retail POS Software In Australia - 20th Oct 20
From Recession to an Ever-Deeper One - 19th Oct 20
Wales Closes Border With England, Stranded Motorists on Severn Bridge? Covid-19 Police Road Blocks - 19th Oct 20
Commodity Bull Market Cycle Starts with Euro and Dollar Trend Changes - 19th Oct 20
Stock Market Melt-Up Triggered a Short Squeeze In The NASDAQ and a Utilities Breakout - 19th Oct 20
Silver is Like Gold on Steroids - 19th Oct 20
Countdown to Election Mediocrity: Why Gold and Silver Can Protect Your Wealth - 19th Oct 20
“Hypergrowth” Is Spilling Into the Stock Market Like Never Before - 19th Oct 20
Is Oculus Quest 2 Good Upgrade for Samsung Gear VR Users? - 19th Oct 20
Low US Dollar Risky for Gold - 17th Oct 20
US 2020 Election: Are American's ready for Trump 2nd Term Twilight Zone Presidency? - 17th Oct 20
Custom Ryzen 5950x, 5900x, 5800x , RTX 3080, 3070 64gb DDR4 Gaming PC System Build Specs - 17th Oct 20
Gold Jumps above $1,900 Again - 16th Oct 20
US Economic Recovery Is in Need of Some Rescue - 16th Oct 20
Why You Should Focus on Growth Stocks Today - 16th Oct 20
Why Now is BEST Time to Upgrade Your PC System for Years - Ryzen 5000 CPUs, Nvidia RTX 3000 GPU's - 16th Oct 20
Beware of Trump’s October (November?) Election Surprise - 15th Oct 20
Stock Market SPY Retesting Critical Resistance From Fibonacci Price Amplitude Arc - 15th Oct 20
Fed Chairman Begs Congress to Stimulate Beleaguered US Economy - 15th Oct 20
Is Gold Market Going Back Into the 1970s? - 15th Oct 20
Things you Should know before Trade Cryptos - 15th Oct 20
Gold and Silver Price Ready For Another Rally Attempt - 14th Oct 20
Do Low Interest Rates Mean Higher Stocks? Not so Fast… - 14th Oct 20
US Debt Is Going Up but Leaving GDP Behind - 14th Oct 20
Dell S3220DGF 31.5 Inch VA Gaming Monitor Amazon Prime Day Bargain Price! But WIll it Get Delivered? - 14th Oct 20
Karcher K7 Pressure Washer Amazon Prime Day Bargain 51% Discount! - 14th Oct 20
Top Strategies Day Traders Adopt - 14th Oct 20
AMD is KILLING Intel as Ryzen Zen 3 Takes Gaming Crown, AMD Set to Achieve CPU Market Dominance - 13th Oct 20
Amazon Prime Day Real or Fake Sales to Get Rid of Dead Stock? - 13th Oct 20
Stock Market Short-term Top Expected - 13th Oct 20
Fun Stuff to Do with a Budgie or Parakeet, a Child's Best Pet Bird Friend - 13th Oct 20
Who Will Win the Race to Open a Casino in Japan? - 13th Oct 20
Fear Grips Stock Market Short-Sellers -- What to Make of It - 12th Oct 20
For Some Remote Workers, It Pays to Stay Home… If Home Stays Local - 12th Oct 20
A Big Move In Silver: Watch The Currency Markets - 12th Oct 20
Precious Metals and Commodities Comprehensive - 11th Oct 20
The Election Does Not Matter, Stick With Stock Winners Like Clean Energy - 11th Oct 20
Gold Stocks Are Cheap, But Not for Long - 11th Oct 20
Gold Miners Ready to Fall Further - 10th Oct 29
What Happens When the Stumble-Through Economy Stalls - 10th Oct 29
This Is What The Stock Market Is Saying About Trump’s Re-Election - 10th Oct 29
Here Is Everything You Must Know About Insolvency - 10th Oct 29
Sheffield Coronavirus Warning - UK Heading for Higher Covid-19 Infections than April Peak! - 10th Oct 29
Q2 Was Disastrous. But What’s Next for the US Economy – and Gold? - 9th Oct 20
Q4 Market Forecast: How to Invest in a World Awash in Debt - 9th Oct 20
A complete paradigm shift will make gold the generational trade - 9th Oct 20
Why You Should Look for Stocks Climbing Out of a “Big Base” - 9th Oct 20
UK Coronavirus Pandemic Wave 2 - Daily Covid-19 Positive Test Cases Forecast - 9th Oct 20
Ryzen ZEN 3: The Final Nail in Intel's Coffin! Cinebench Scores 5300x, 5600x, 5800x, 5900x 5950x - 9th Oct 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Initial Stages of Global Stock Market Crash In Progress?

Stock-Markets / Financial Crash Jun 27, 2011 - 04:05 AM GMT

By: Steven_Vincent

Stock-Markets

Best Financial Markets Analysis ArticleLast week SPX appeared to complete an abc sideways correction. By Friday the index was heading back towards its lows and ended the day and the week just above critical support at the confluence of the 200 EMA and the uptrend from March 2009. The setup is for a potential gap below this support zone on Monday, which could then trigger sell stops leading to a cascading decline.


Commodities continued to lead to the downside, with Crude breaking lower and the Agriculture and Grains sectors breaking key long term support levels. Gold and Silver also broke down from key support.

At the same time, US Dollar Index closed the week above long term downtrend resistance and above the key 76.00 level. VIX hovered just below long term downtrend resistance and has yet to register significant levels of fear in the market.

Technical indicators moved back from oversold and excessively bearish short and intermediate term readings while long term readings continued to deteriorate.

Overall the setup continues to be for a major break of support and a dramatic acceleration of the downtrend. Whether this entails a strong C wave decline to support, similar to the March 2011 decline, or an outright crash, remains to be seen. Either are distinct possibilities.

Late in the week, governmental and monetary authorities made transparently desperate attempts to prevent the breakdown of asset market prices. First, the announcement of a Greece austerity plan was timed to the minute to prevent a break of the 200 EMA and fostered a short covering rally. Next, Obama attempted to stimulate the markets by releasing strategic petroleum reserves to drive down the price of crude oil which would presumably give the economy an across the board "tax cut". Neither of these efforts were successful as corporate and sovereign debt related news triggered additional selling. In fact the net effect of last week's volatile correction and the efforts at keeping the markets above support was probably to exacerbate the situation by expending scarce buying pressure from "buy the dip" traders and investors and short covering in a minor corrective range.

The fundamental news cycle has now shifted into earnings warnings prior to the official onset of earnings season on July 11. Negative corporate news out of Micron (MU) and others hit technology hard and grumblings are heard that companies will be pre-announcing earnings disappointments going forward.

Although European authorities and the IMF would have investors believe that the Greece crisis has been contained, evidence is mounting that Italy is next on the hit list. The downgrade of the Italian banking sector is likely the first salvo in an ongoing attack on Italy's financial stability. No doubt other countries are set to show cracks in the facade of their solvency soon as well.

In the following video I detail the current basic technical picture for global markets. Before viewing it you might like to also review my prior videos and blog postings in this series:

Stock Market Crash Possible Soon?

Global Markets Teeter Precariously on the Edge

As I have been saying for weeks now, the basic technical situation is quite precarious and even a cursory look at the charts of the major markets is enough to alert the open minded investor that there is major risk at hand. Yet even so, most analysts are focused on a perceived short to intermediate term "oversold" condition or an apparent "excessively bearish" sentiment picture.

The major breakout on the US Dollar Index chart is perhaps the most important indication of that a rapid, dramatic shift from risk to safety is under way.

VIX would be the next big indicator to make a dramatic breakout. It appears to be ready to move.

At the time of publication SPX futures are down .45% in very early Asian trade and have broken the 200 EMA. Dollar is rallying and commodity futures are down across the board.

Naturally, the market can prove us wrong at any time, and we should not get complacent or take our eyes off the ball. Any move above 1293 on the futures would be enough to get me to close my short positions and reassess the situation.

To read the full BullBear Market Report, please join us at BullBear Traders room at TheBullBear.com.


Disclosure: No current positions.

By Steve Vincent

http://www.thebullbear.com

Steven Vincent has been studying and trading the markets since 1998 and is a member of the Market Technicians Association. He is proprietor of BullBear Trading which provides market analysis, timing and guidance to subscribers. He focuses intermediate to long term swing trading. When he is not charting and analyzing the markets he teaches yoga and meditation in Los Angeles.

© 2011 Copyright Steven Vincent - 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