Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

What Could Happen When the Stock Markets Correct Next

Stock-Markets / Stock Markets 2019 Feb 16, 2019 - 03:48 PM GMT

By: Harry_Dent

Stock-Markets I hate to be so cynical, but the markets love to fool as many people as possible, bulls and bears alike. This is especially true at key turning points and even more so in extreme bubbles like the one we’ve been in since late 1994, with this final phase – and it’s unprecedented QE and tax cuts – since early 2009.

This final rally (since 2009) is all “hot air.”

This recovery has been the weakest ever in real GDP, capital spending, employment growth, and productivity (I’ll talk about this in more detail in the upcoming February edition of The Leading Edge).


The Fed has created what I call “markets on crack” by printing free money and pushing short- and long-term rates down artificially.

Earnings per share have grown 119% faster than corporate profits due to companies’ ability to buy back their own stocks with cheap money from the Fed. Such free money policies always create or amplify bubbles that only burst dramatically!

Be warned…

There are NO soft landings to such extreme bubbles. (I challenge you to find just one in history.)

After the January 2018 peak, that looked like a potential final bubble top, we didn’t get that classic 40% sharp crash in the first two to three months. We haven’t seen that since the slightly higher high on October 3, but that didn’t look like a classic bubble top.

So, what’s the most likely scenario now?

A final blow-off rally… what I call a Dark Window.

But – and this is me being cynical here – first we’ll see a scary crash.

That’s exactly what occurred in the last great bubble peak into March 2000. The Nasdaq crashed 34% sharply into late 1998, then turned around and made the greatest final blow-off rally in history into March 2000.

I love it because it fakes out the bulls first, and then kills the bears, just before the crash of a lifetime, like 1929 to 1932, into 2020 to 2022.

Here’s the chart for that ultimate scenario that would still be in play even if the Nasdaq crashed down to as low as 5,500 in the coming weeks, down 32% from its all-time high ahead of most markets in late August… just like the late 1998 scenario.



This isn’t carved into stone yet, but is still the most likely scenario so take it seriously because the greatest short-term profits would precede the greatest long-term crash and create the most profitable trades of a lifetime.

I will be watching this correction very seriously and will keep you updated! In the meantime, tomorrow Rodney will share with you an investment to add to your portfolio in preparation of this Dark Window. And on Friday I’ll share some examples of how powerful the opportunities ahead can be.

Stay tuned.

Harry

http://economyandmarkets.com

Follow me on Twitter @HarryDentjr

P.S. Another way to stay ahead is by reading the 27 simple stock secrets that our Seven-Figure Trader says are worth $588,221. You’ll find the details here.

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 © 2019 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.

Harry Dent 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