Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
This Dividend Aristocrat Is Leading the 5G Revolution - 22nd July 19
What the World Doesn’t Need Now is Lower Interest Rates - 22nd July 19
My Biggest 'Fear' For Silver - 22nd July 19
Reasons to Buy Pre-Owned Luxury Car from a Certified Dealer - 22nd July 19
Stock Market Increasing Technical Weakness - 22nd July 19
What Could The Next Gold Rally Look Like? - 22nd July 19
Stock Markets Setting Up For A Volatility Explosion – Are You Ready? - 22nd July 19
Anatomy of an Impulse Move in Gold and Silver Precious Metals - 22nd July 19
What you Really need to Know about the Stock Market - 22nd July 19
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Stock Market Crash Red Alert for 2nd Downwave...

Stock-Markets / Financial Crash Aug 31, 2015 - 08:03 AM GMT

By: Clive_Maund

Stock-Markets

We are believed to be at an excellent juncture right now to short the broad stockmarket (or buy bear ETFs and Puts). As we know, we did just that before the dramatic plunge early last week, and are now "sitting pretty". Now is the time to add to positions, or if you haven't any and are looking for the right shorting opportunity, this is it.


To see just why now is an excellent time to enter short positions or build on existing short positions (inverse ETFs / Puts) we will now look at the latest 1-year chart for the S&P500 index. All those who bought in the large rectangular pattern drawn on the chart, labeled the "Mug Pen" are like sheep huddled in a corral waiting to be fleeced. Even after the sharp rally late last week they are nursing significant losses, and if they get the chance to "get out even" or nearly so, they are going to take it. What is likely to happen is that they will almost get the chance, but not quite, because the market will turn down again soon, or immediately, and they will have to make a run for it if they want to avoid a severe fleecing. This means that as soon as the market starts to drop away again, they will stampede to unload stocks while they still can at reasonable prices, exacerbating the rate of decline. This is a big reason that another severe downleg is expected.

S&P500 ndex 1-Year Chart

On the 3-month chart for the Dow Jones Industrials we can see recent action in detail, and how the market may right now be topping after the technical rebound last week, with a potential "Evening Doji Star" reversal forming on the chart, that will be confirmed by a drop tomorrow...

Dow Jones Industrials 3-Month Chart

The seriousness of the situation is made clear by the long-term 10-year chart for the S&P500 index on which we can see that a long overdue cyclical bearmarket has been signaled by last week's plunge, which involved a clear breakdown from a large bearish Rising Wedge. What we are seeing now is a final backtest of the "round number" resistance at 2000, formerly support that failed, before we enter a brutal self-feeding downtrend that is likely to be steep. This looks like the last opportunity to get out, or go short at good prices. Those who follow Wall St's advice to "buy selectively" will learn to their dismay that the market doesn't discriminate much when it comes to the damage it inflicts during a severe bearmarket phase - pretty much everything will be hit and hard.

S&P500 Index 10-Year Chart

For those who are experienced and comfortable with trading options, a wide range of suitable big stock Puts are detailed in two articles on the site, Big Stock Put Options for Market Crash - Round 2 and Big Stock Put Options for Market Crash - worthy additions.

By Clive Maund
CliveMaund.com

For billing & subscription questions: subscriptions@clivemaund.com

© 2015 Clive Maund - The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maunds opinions are his own, and are not a recommendation or an offer to buy or sell securities. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.

Clive Maund Archive

© 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