Best of the Week
Most Popular
1.Stock Market Crash and Recession Indicator Warning: Extreme Danger Ahead - Harry_Dent
2. Is This How World War III Begins, In Almost Complete Silence? - Jeff_Berwick
3.Trump Wins 2nd Presidential Debate, Betfair Betting Markets Odds Bounce - Nadeem_Walayat
4.Why Krugman, Roubini, Rogoff And Buffett Dislike Gold - GoldCore
5.End of SPX Stock Market Correction Nears - Tony_Caldaro
6.Get Ready for the Future - Exponential Machine Intelligence Mega-trend towards Singularity - Nadeem_Walayat
7.US Housing Market Bubble II – It’s Happening Again! - Andy_Sutton
8.FTSE BrExit Stock Market Panic Crash Resolves towards New All Time Highs - Nadeem_Walayat
9.Can Trump Still Win Despite Opinion Polls, Bookmakers and Pundits all Saying Hillary has Won? - Nadeem_Walayat
10.Gold’s, Miners’ Stops Run - Zeal_LLC
Last 7 days
Stock Market Investment Success Through the “Investment Rule of 72” - 21st Oct 16
The Final Bottom in Gold - WHEN - 21st Oct 16
Gold Green Lights Upleg - 21st Oct 16
Demand for US Mints Silver Eagles has ‘Returned with a Vengeance’ - 21st Oct 16
Central Bankers Can't Stop The Death Blow Of The Post US Election Recession - 21st Oct 16
The Fortune at the Bottom of the Pyramid: Golden Opportunity for Frontier Asia - 21st Oct 16
Have You Taken These 4 Simple Steps to Improve Your Trading? - 21st Oct 16
The Stock Market is an Accident Waiting to Happen - 20th Oct 16
It's Rally Time for Gold and Silver Equities - 20th Oct 16
Cashless Society – Risks Posed By The War On Cash - 20th Oct 16
China's Insanely Leveraged Housing Market Will Enter Its Secular Bull Market In 2017 - 20th Oct 16
Donald Trump Bounces Going into 3rd and Final US Presidential Election Debate - 20th Oct 16
Attention Please: Phase Two of the Gold and Silver Train Now leaving the Station. All Aboard? - 19th Oct 16
How to Successfully Trade a Stock Market Crash - Black Monday October 19th 1987 - 19th Oct 16
Tesla, Apple and Uber Push Lithium Prices Even Higher - 18th Oct 16
Silver, Debt, and Deficits – From an Election Year Perspective - 18th Oct 16
UK Property Market: Slow Growth Does Not Equate To Decline - 18th Oct 16
Trump Election Victory is in Your Power - 18th Oct 16
Stock Market More to Come! - 18th Oct 16
This Past Week in Gold and Silver - 17th Oct 16
A Falling Stock Market Cannot Be Allowed - Financial Repression Is Now “In-Play”! - 17th Oct 16
Commodities, Forex and Stock Market Trend Forecasts - 17th Oct 16
Stock Market Crash..or No Crash? - 17th Oct 16
A perspective on risk rally – Risks abound but Stock Market is Confident - 17th Oct 16
Bank of England Blames Brexit for Sterling Drop Inflation, Masks QE Money Printing Cause - 17th Oct 16
From Piety to Pride to Pity, America's Racial Divide - 17th Oct 16
Is Obama Juicing US Government Spending To Get Hillary Clinton Elected? - 16th Oct 16
Seek Your Independence: Anything Else Will Destroy You - 16th Oct 16
SNL - US Presidential Debates, 1st, 2nd, VP - Like You've Never Seen them Before! - 16th Oct 16
End of Economic Growth Sparks Wide Discontent - 16th Oct 16
Donald Trump on Life Support, May Abandon Election Campaign and War on Republican Party - 15th Oct 16
The Gold Manipulators Not Only Will Be Punished, They Have Been Punished - 15th Oct 16
Black Votes Matter - Is the US on the Verge of Mass Race Riots? - 15th Oct 16
Gold Stocks Screaming Buy - 14th Oct 16
Brace Yourself for the Quadrillion-Dollar Reckoning - 14th Oct 16
The Next Recession Will Blow Out the Budget - 14th Oct 16
John Mauldin: My Infrastructure Plan to Save the US Economy - 14th Oct 16
World War III On The Brink: War Will Continue Until It Triggers Economic Collapse - 14th Oct 16
US T-Bill Rejection At Ports In Progress - 14th Oct 16
These 2 Debt Instruments Pose Peril to Millions of Investors - 14th Oct 16
China’s Rocketing Housing Market Real Estate Bubble - 14th Oct 16
DIY Winter Home Maintenance Money Saving 22 Point Checklist to Get Ready for Winter/Fall - 14th Oct 16
US Stock Market, Big Picture View - 13th Oct 16
Stock Buybacks Main Force Driving Bull Market; Rewards Investors and Starves Innovation - 13th Oct 16
SPX Gapping Down... - 13th Oct 16
Syria - Obama Stepped Back From Brink, Will Hillary? - 13th Oct 16
The Structure and Future of Gold in the Investment and Monetary World - 13th Oct 16
Can Trump Still Win Despite Opinion Polls, Bookmakers and Pundits all Saying Hillary has Won? - 12th Oct 16
Gold and Crude Oil - General Stock Market Links - 12th Oct 16
Samsung's Galaxy Battery Just The Tip Of The Iceberg - 12th Oct 16
Hillary: Deceit, Debt, Delusions (Part Two) - 12th Oct 16
Gold and Silver Metals Show Strength Relative to the USD Index - 12th Oct 16
Announcing Trader Education Week -- a Free Event to Help You Learn to Spot Trading Opportunities - 12th Oct 16
Confirmed Stock Market Sell Signals - 11th Oct 16
Hillary Deceit, Debt, Delusions - 11th Oct 16
Trump Support Crashes to New Low of 6.4 on Betfair Odds Betting Market - 11th Oct 16
The World Is Turning Dangerously Insular - 11th Oct 16
An American Tragedy: Trump Won Big - 11th Oct 16

Free Instant Analysis

Free Instant Technical Analysis

Market Oracle FREE Newsletter

LEARN to Trade

Initial Stages of Global Stock Market Crash In Progress?

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

By: Steven_Vincent


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

Disclosure: No current positions.

By Steve Vincent

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.

© 2005-2016 - 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

Catching a Falling Financial Knife