The stock market's advance since March 2009 in all probability is O-V-E-R. This leaves major U.S. stock indexes at risk of sinking to levels last seen in the 1987-1994 period. How rapidly these levels might be reached is impossible to say. However, the U.S. stock market's inauspicious open on Monday, August 24, 2015 suggests major U.S. indexes could crater to this longstanding objective of mine sooner than anyone thinks. Never mind there isn't
1 in 10,000 who even vaguely imagines a decline of this magnitude is remotely possible. Let them go on believing hopelessly insolvent central banks have everything under control.
I might adjust my longstanding outlook a bit by suggesting index targets approaching levels nearer 1994 lows are more likely objectives, as this is the area from which a 5th wave extension began. According to the Elliott Wave Principle, corrections of five waves whose 5th wave was extended result in the corrective wave falling to the area in which the 5th wave extension began. In the case of five waves that unfolded from 1982-2000, the 5th wave of these began its extension from the 1994 lows. Thus my longstanding "Dow 3600" forecast.
My present belief the market's counter-trend rally off March 2009 bottom is over is predicated on the view that, an a-b-c [corrective] wave [up] at last has been completed, having taken the form of a 5-3-5 "zig-zag." This zig-zag higher "alternates" from the 3-3-5 "flat" that had previously formed off the market's Y2k peak to its March 2009 bottom.
One thing noteworthy about this still unfolding corrective wave whose beginning traces back to Y2k is its apparent development in "complex-to-simple" fashion. A "flat" is more complex than a "zig-zag", so if the "complex-to-simple" manner in which the corrective wave has unfolded continues, then the speed and intensity of the market's impending collapse could be nothing short of spectacular. This end would "fit" a "complex-to-simple" Elliott corrective wave's complexion.
Just to review, the "flat" forming from Y2k peak to March 2009 bottom marked the corrective wave's wave A. The "zig-zag" forming from March 2009 bottom up to a couple weeks ago marks the corrective wave's wave B. Wave C is now unfolding, thus making the market's throttling at the open on Monday, August 24, 2015 a most fitting start to what could prove the most devastating decline in U.S. stock market history. You heard it here first.
If you find my expressed, dire outlook vexing on account of the mere appearance of broad support for equities, this as witnessed by the present manner in which the NASDAQ Composite is seemingly proving more resilient than its seniors (NYSE, S&P 500, DJIA, etc), then you need ask yourself just one question: what manner of credit bubble can possibly be inflated in order to maintain the status quo, "nothing to be concerned about here" aura desperately being perpetuated by insolvent albatrosses and their feckless "overseers" to the effect of facilitating the gradual, yet persistent, upward levitation of garbage at the bottom of the capital structure?
This would be a good time to review some old news: LENDERS OF LAST RESORT ARE ALL IN and NASA's Curiosity Rover HAS YET TO FIND BENEVOLENT LIFE ON MARS WILLING TO SUPPORT EARTH'S [WOEFULLY INADEQUATE] BANKING SYSTEM BACKSTOP. There remains no easy bubble left to inflate in order to sustain the appearance that a mountain of financial claims on a shrinking physical economic base built up over the decades since August 15, 1971 are priced fairly amidst what demonstrably are
profoundly distorted economic and financial conditions. Every conceivable bubble has been blown up and the last—provided by lenders of last resort—has been popped (according to
Doug Noland).
Now, how can we be more certain of impending financial collapse from evidence outside the realm of technical analysis? Let's call it "China Bash: the Search for Scapegoats in a Global Crisis Caused by London's 'Big Bang.'" By this moniker, too, we might likewise identify who is high on the list of suspects behind both the recent "triple whammy" effecting the websites of the NYSE, the Wall Street Journal and United Airlines
all on the same day (officially a "nothing to see here" event ... yeah, right), as well as the "accidental" explosion at the Chinese port of Tianjin two days following China's so-called "devaluation." In this regard we shouldn't overlook the xenophobic refuse pouring from the mouth of Republican presidential front runner Donald Trump scoring China at every turn. You would think that, if only for their Great Wall Trump would have nothing but admiring things to say! But no, the Donald appears part and parcel with scenery evidently being erected for the sake of misdirecting countless millions of unsuspecting dupes whose lives are about to be turned upside down on account of an unraveling Ponzi scheme made in London whose negative effect will be no less felt in China than in the USA.
So, "China Bash" is occurring for a reason. Plainly, "beggar thy neighbor" policies promoting exchange rate devaluation such as have been exercised with extraordinary vigor by the U.S., Europe, and Japan over recent years are to be regarded as having no negative market consequence and unworthy any comment or concern, whereas China's measly 2% devaluation is somehow earth shattering. Folks, there's a disconnect here, and I'm here to say it's happening for a reason. Ponzi is finished.
NASDAQ's present resilience, then, can be seen a living reflection of this reality. It's a mask on an emperor quickly coming unclothed. Let me ask you, is the preponderance of junk listed there (and I have the charts to back that statement) being propped up to lull a growing army of desperate little people (I see them everywhere) who in their blissful ignorance (and probably more accurately, fear born of cowardice) are
hoped to become easy prey once the wheels come off, shepherded to find some shred of solace in a weakling like Trump? The Great Tower Builder wants to build a WALL. How creative! What strength of will!
2008 also was an election year with no incumbent running for president. Supposing that October 2016 might prove much too late to make hay of "China Bash" in some grander push for war made by those who have made their bones promoting this globalization train wreck in the first place, I will conclude by saying we might be witness to the market's chaotic collapse even before year end.
Remember "
Is a Stock Market Collapse in the Stars"?
Well, there's a partial solar eclipse occurring on September 13th. This will be followed by a total lunar eclipse on September 28th.
And this recent
tweet from Tarpley (reads like Ben Franklin's "Autobiography"?) I found rather interesting, if only in light of the known role Scottish Rite Freemasonry played in the secession movement leading up to the U.S. Civil War.
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