1 perspective on impending market crash Ladies an

1 perspective on impending market crash

Ladies and gentlemen, I know that many only trade the penny stocks here, but it is in everyone's interest to pay close attention to what is going on in the broader markets.

There are numerous catalysts lining up right now to tank this market, and numerous signs showing the cracks in the ice of this low volume market rally.  One need look no further than this week's ECB rate decision and Spanish bond yields. The market is being pumped ahead of the November elections as much as possible though, how long it can last is questionable.

However, once the collapse starts it should be quick and voluminous. Take a look at the weekly chart of the S&P 500 cash. It is set to a 15 year time frame and as you can see, it is quickly approaching the retrace resistance level from 2008 that preceded the market collapse. From the retrace bounce level of 1437 the markets proceeded to collapse 50% over the next 8 months before putting in a low at 666 in March of 2009 for the bounce.

To me, this epic collapse is the main reason that a freshman Senator/community organizer won the 2008 election, and why everything will be done to hold the markets up ahead of the elections as much as possible.

You will see the best job reports, payroll, trade data, and any government produced statistic come out between now and the end of the year as rosy as possible. This could take the market to the 1500 level, but you won't see me going long in any major big board swing position up here.

Market tops are difficult to nail on the money, and in my experience it is best to let a top get put in, and then short the retrace. If you can't short because you only have access to long only mutual funds, then you should look to reduce your exposure significantly.

When this thing gets started, I see a move to 974 in very short order. There is a weekly pivot support level and a 61.8 retrace on that mark which should give some good medium term support for a good bounce before another leg down. When it is all said and done I think it takes out the 666 low from 2009. That is where I will be buying everything under the sun with both hands.

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