Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle SeasonalStock Market Awaiting the Bonds Panic to trigger QE4Ever - 30th April 25 Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Awaiting the Bonds Panic to trigger QE4Ever - 30th April 25
US Bond Market Panic Continues Towards May Expected Japanese Rate Hike Volatility Spike - 24th April 25
Stock Market Tarrified as President Dump Risks Turning Recession into Stagflationary Depression - 21st April 25
President Dump Delivers BEAR MARKET - Stock Market Battles Between Order and Chaos - 7th April 25
Stocks Bull Market End Game Bear Start Strategy - 20th Mar 25
Gold and System Collapse: Charting the Bank Run of the Mighty US Dollar - 20th Mar 25
Tesla's Troubles — Is it Musk or is it More? - 20th Mar 25
The Stock Market Bear / Crash indicator Window - 9th Mar 25
Big US Tech Stocks Fundamentals - 9th Mar 25
No Winners When The Inflation Balloon Pops - 9th Mar 25

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

US Presidential Election Candidates Confirm: No Stock Market Crash This Year

Stock-Markets / Stock Markets 2016 Apr 21, 2016 - 09:25 AM GMT

By: Clif_Droke

Stock-Markets

A CNN Money article this weekend provided contrarian investors with a moment of clarity.  “Trump and Cruz predict stock market ‘crash’” the headline proclaimed.  Contrarians couldn’t find a more emphatic statement of mainstream bearish capitulation than that.

The market opinions of high-profile public figures are always as fascinating as they are instructive.  Most public figures have only an elementary grasp on the financial markets; this is doubly true for politicians and political candidates.  In instances when these figures make public predictions about the market it’s almost a guaranteed contrarian bet that they’ll be wrong.


“The problem with using monetary policy to juice the system is that it creates bubbles,” Cruz said.  Trump expressed a similar sentiment when he said Americans were “being forced into an inflated stock market and at some point they’ll get wiped out.”

Never mind that both statements can be disproven.  A loose monetary policy doesn’t create bubbles; it can feed or augment them but not create them.  Bubbles are a manifestation of mass investor psychology and are the result of synchronized human endeavor.  Central banks can provide liquidity to fuel asset bubbles, but the Fed has no control over how or when a bubble gets started. 

As for Trump’s statement that investors are “being forced into an inflated stock market,” that’s also untrue.  No one is forcing investors into equities; if anything Wall Street has had extreme difficulty trying to persuade casual investors away from money markets and into stocks.  Despite the lofty levels to which stocks have soared in recent years, direct participation among retail investors is astonishingly thin.

The Cruz/Trump crash prediction also provides insight into the mindset of the multitudes.  They’re still feeling fearful and uncertain about America’s economic outlook.  Their collective misgivings about the economy have allowed equities to rally as vigorously as they have since the February market bottom.  Indeed, it seems that the “Wall of Worry” has supplanted the “Slope of Hope” as the bulls have regained command of the stock market.

The takeaway on the market prognostications of candidates Cruz and Trump is that a crash is highly unlikely in the balance of 2016.  Their statements show that fears of an asset bubble and subsequent market crash are entrenched among mainstream observers.  This in turn strongly suggests that the worst case scenario has already been priced into equities in the intermediate-term.  Any hopes among the bears for a crash will likely have to wait until after the 2016 election is over. 

Mastering Moving Averages

The moving average is one of the most versatile of all trading tools and should be a part of every investor's arsenal. Far more than a simple trend line, it's also a dynamic momentum indicator as well as a means of identifying support and resistance across variable time frames. It can also be used in place of an overbought/oversold oscillator when used in relationship to the price of the stock or ETF you're trading in.

In my latest book, Mastering Moving Averages, I remove the mystique behind stock and ETF trading and reveal a simple and reliable system that allows retail traders to profit from both up and down moves in the market. The trading techniques discussed in the book have been carefully calibrated to match today's fast-moving and sometimes volatile market environment. If you're interested in moving average trading techniques, you'll want to read this book.

Order today and receive an autographed copy along with a copy of the book, The Best Strategies for Momentum Traders. Your order also includes a FREE 1-month trial subscription to the Momentum Strategies Report newsletter: http://www.clifdroke.com/books/masteringma.html

By Clif Droke

www.clifdroke.com

Clif Droke is the editor of the daily Gold & Silver Stock Report. Published daily since 2002, the report provides forecasts and analysis of the leading gold, silver, uranium and energy stocks from a short-term technical standpoint. He is also the author of numerous books, including 'How to Read Chart Patterns for Greater Profits.' For more information visit www.clifdroke.com

Clif Droke Archive

© 2005-2022 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