The Next Crash?
This is a chart (click to enlarge) of the S&P 100 (OEX), marked off in monthly candlesticks:
On it, I've noted the parameters of the overarching bear trend that has subtly governed investor behavior for the past decade. I've also marked in the Stacked Sell Signals of 2000 and 2008 that warned of the dramatic cyclic downturns to come.
Please note we are approaching the exact same technical and economic threshold that presaged both previous crashes. So the question at hand is not "will there be another downturn," but rather "when and how deep?"
As I mentioned a moment ago, I have also laid in the Fed's two free money "QE" programs. As you can see, these efforts are pretty much the only thing that kept the markets from collapsing early in the cycle.
But now they are part of the warp and woof of our little tapestry, and as such, are creating mini-cycles of their own.
The Worst Choice
Washington is now faced with a horrid choice: it can cease and desist printing and borrowing. Without this prop, the markets will, of course, collapse. But there is a chance that this breakdown will be limited in scope.
Or they can (and to be frank, most likely will) cave in to political pressure and commence QE3. This will buy one more upside leg, but will also cause the eventual crash to double in scope.
The best hope I can offer you is that I can find a way to monetize these moves via call and put - playing with options, regardless of which dark path Washington walks down. However, you will need to be able to buy the calls and puts I recommend.
Education First.
Adam Lass
Editor, Wealth Daily
On it, I've noted the parameters of the overarching bear trend that has subtly governed investor behavior for the past decade. I've also marked in the Stacked Sell Signals of 2000 and 2008 that warned of the dramatic cyclic downturns to come.
Please note we are approaching the exact same technical and economic threshold that presaged both previous crashes. So the question at hand is not "will there be another downturn," but rather "when and how deep?"
As I mentioned a moment ago, I have also laid in the Fed's two free money "QE" programs. As you can see, these efforts are pretty much the only thing that kept the markets from collapsing early in the cycle.
But now they are part of the warp and woof of our little tapestry, and as such, are creating mini-cycles of their own.
The Worst Choice
Washington is now faced with a horrid choice: it can cease and desist printing and borrowing. Without this prop, the markets will, of course, collapse. But there is a chance that this breakdown will be limited in scope.
Or they can (and to be frank, most likely will) cave in to political pressure and commence QE3. This will buy one more upside leg, but will also cause the eventual crash to double in scope.
The best hope I can offer you is that I can find a way to monetize these moves via call and put - playing with options, regardless of which dark path Washington walks down. However, you will need to be able to buy the calls and puts I recommend.
Education First.
Adam Lass
Editor, Wealth Daily
