Everything's Starting to Crash!
Stock-Markets / Financial Crash Jul 28, 2015 - 10:43 PM GMTBy: Harry_Dent
In a recent update I gave six signs of an impending crash. Just today we have a number of those signs starting to hit.
Despite a $486 billion fund to prop up its market, China’s stocks sunk another 8.5% today – the biggest one-day drop since 2007.
This is following a 35% crash into early July. Now, after bouncing back up to 4,200, the Shanghai Composite is down to 3,750. If it falls another 10% to below its recent low of 3,374, that will be the decisive blow – for us and them.
I say this because China is my No. 1 indicator for a global market crash.
If – no, when! – its stock bubble continues to burst, real estate will be on its heels. Because China owns so damn much of it, falling real estate prices will be the single biggest trigger for the global markets.
Europe’s in bad shape too.
The DAX in Germany just started to crash again down 2.56% to below 11,100 today – down over 10% from the top! It’s showing little sign of reaching a new high.
Overall the broader European markets are nowhere near their 2007 highs. Measured by the Stoxx 50 (FEZ ETF), they’re down 41% – even with the recent bounce!
As for U.S. stocks, they seem to be imploding from within!
Even though the Nasdaq hit new highs recently, the advance/decline line didn’t. That means more stocks went down than up, even though the most aggressive market hit a high!
That’s an extreme bearish sign showing that investors have gotten very selective in the final stages of this bull market.
Another important divergence in U.S. markets is that the Dow did not make new highs – most notably, Dow transport stocks.
Then there’s biotech, the leading sector of the bubbling tech stocks, which is also taking a near 2% hit today.
With the way stocks are selling off, I expect we’ll see a bounce in the coming weeks. I even think we could see China’s Shanghai index bounce to between 4,300 and 4,500.
But I do not expect that bounce will reach new highs. When they fail to achieve that, it will signal the final top.
Finally, the greatest near-term threat that will wreak havoc on American soil will be the death of the fracking industry.
Just last week, oil broke below $50. Today, it fell to a four-month low of $47.39.
That means last year’s $42 low is likely on its way, and $32 after that.
Most experts keep saying oil will be back to $70 to $80 by the end of the year.
Not us!
Oil will keep falling. It will force the frackers out of business. And when they default on the $600 billion in junk bonds and leveraged loans they’ve used to fund their drilling, it’ll be like the next subprime crisis in the U.S.!
Oil’s down. Stocks are down. Gold too.
It’s all coming to pass!
Now more than ever, it’s critical that you equip yourself with the necessary strategies to survive the onslaught ahead. It’s coming, likely fast.
Don’t let your emotions get the best of you as the markets continue to topple.
Find a strategy that suits you, stick to it, and breathe.
We will keep you updated…
But the great crash ahead looks more and more imminent.
Harry
Follow me on Twitter @HarryDentjr
Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.
Copyright © 2015 Harry Dent- 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.
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