DOW JONES INDEX CORRECTION & CRASH LEVELS: A Chart All Investors Must See

As the Dow Jones Index continues to drop like a rock, the worst is yet to come.  Today, investors once again plowed into the markets because they are following the Mainstream Financial advice of BUYING THE DIP.  Unfortunately, those who bought the dip before yesterday’s 1,032 point drop and the 400+ point drop this afternoon, have thrown good money after bad.

Of course, we could see a late day rally to calm investor’s nerves…. but we could also see an increased sell-off.  Either way, I could really give a rat’s arse.  Why?  Well, let’s just say the Dow Jones Index has a long way to fall before it gets back to FAIR VALUE.  However, my fair value is likely much lower than the Mainstream analysts’ forecasts.

I wanted to publish this post today but will be putting together a Youtube video with more detail this weekend.  However, let’s take a look at the Dow Jones Index chart from my Youtube video:

If you haven’t seen this video, I highly recommend that you do.  When I published that video, the Dow Jones Index was trading at 26,100.  Today it is already down to 23,400.  However, as I stated, we have much further down to go.  Here is my newest chart:

While the Dow Jones Index has already declined by 2,500 points since my first chart, I wanted to provide the different correction and crash levels as I see it taking place on the Dow Jones Index in the future.  The first level the Dow Jones will reach its Support level at about 18,000 points.  Once this level is broken, then it breaks down to the 200 Month Moving Average (RED line) at 13,000.  Who knows how long it would take to get down to 13,000, but it will.

As you can see, the Dow Jones Index fell below its 200 Month Moving Average in 2009, so this isn’t anything new.

However, the ULTIMATE FAIR VALUE for the Dow Jones Index when we factor in the Dire Energy Predicament is about 3,000 points:

I will discuss this in the next video.

Happy Trading to the POOR SLOBS who continue to throw money in this market.

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48 Comments on "DOW JONES INDEX CORRECTION & CRASH LEVELS: A Chart All Investors Must See"

  1. DisappearingCulture | February 9, 2018 at 12:07 pm | Reply

    “Happy Trading to the POOR SLOBS who continue to throw money in this market.

    That could be the plunge protection team.

  2. Michael Kohlhaas | February 9, 2018 at 1:45 pm | Reply

    DOW’s real value is 1.000 points! What are you saying now, heh???

  3. Gartman went short today and this article is clearly an indication that stocks have bottomed and a huge rise is coming. SP500 will be 3200 by year end.

  4. Gold and Bitcoin not doing too badly, holding their own in the stock drawdown. Silver is obviously the first man thrown overboard. I say “man”, because most are a disappointment. Almost at the end of the first wave down. If Gartman is short, we be going up. 😬

  5. Who believes Steve anymore? I know I don’t .. dow up at close.

    • Muhammad Aidid,

      Maybe you should read the entire article. However, as I said before, HUMANS are clever and ingenious in SHORT-TERM thinking, but completely STUPID at long-term thought and wisdom.

      So, you are free to jump into the greatest Ponzi Scheme in history Muhammad or if you don’t believe me anymore, you may choose to stop visiting the site and leaving comments. It won’t hurt my feelings one bit.

      steve

    • Muhammed,
      If you had had this information and understanding that Steve is giving back in 2000 and 2008 you would NOT have lost money but GAINED. BUT since 2014 things have changed. There are no pit operators, there are no terminal traders. The trading is done by software. Almost a million transactions are done in a second. When a transaction is traded and in what sequence, is determined by the algorithm (software). This software is also called Artificial Intelligence (AI). Did you not see the boosters detach from the falcon heavy and land by themselves? This control of the boosters as they re-enter the atmosphere and land is done by the Artificial Intelligence (AI). The AI makes millions of decisions a second to keep the boosters from crashing. This same type of AI is used in the stock market. But just as the AI is used to keep the boosters from crashing, it failed for the main rocket core, which exploded to smithereens when it impacted. The AI could not save the core rocket, what caused the problem was something unexpected which the AI was not programed for. So the question is is there anything that could happen, with the stock market, that the AI is not programed for?

  6. Oh yeah, buy dip says MSM which is the government’s manipulative way of saying please buy you suckers because the house of cards cannot stand with only fiat government money! Of course there are suckers who believe the MSM and government because they always believe what the government and government controlled MSM say!! LOL
    Use your head, look at manipulated employment, numbers on SNAP, companies going bankrupt, increase debt of companies and government…and you call this a growing economy??

  7. So the stock market has already vaporized over 3 trillion–I think I heard today. Congress set to stack about 3 tril on the debt this year. Easy come, easy go.

  8. Hi Steve,
    When I try to recreate the same $INDU chart in StockCharts.com for the $INDU starting at 02 Jan 1981 to present using the Simple Moving Average overlays, I get a MA(200) of 18,899.97 and a MA(50) of 22,485.15. I don’t get a 200 Month Moving Average as seen on your chart above of 13,075.42. Any idea as to why we are getting different figures?

  9. I trade for a living and making these sort of calls when the Dow has not even hit the 200 SMA is a little premature.

  10. One of your charts made “Russia Insider” Steve 🙂
    People are starting to notice
    https://russia-insider.com/en/shale-miracle-retirement-party-oil-industry/ri22495

  11. That’s as pretty bold statement to say the Dow will go to 3,000. I was planning on 8,000. But if you say so. I’ve gota bugzillion put options in the market right now.

  12. CoinDesk recently released the 2017 “State of the Blockchain” report here:
    https://media.coindesk.com/uploads/research/state-of-blockchain/2017/q4/sob2017q4-2018.pdf

    Plenty of great data, but of note, in a survey of over 3,000 respondents (pg 115) across the globe (89% of which are unaccredited investors), and 92% of which purchased crypto in 2017 – the survey says that (page 149): Only 19% bought on margin (debt), and of those who did 52% have already paid that back. Meaning that less than 10% of crypto buyers have purchases remaining based on margin of some sort.

    Why is this relevant? We have never seen how the crypto markets will react to a stock crash. Bitcoin was invented in 2009 and we haven’t had a stock crash since then. The crypto “bubble” wasn’t based on debt if 81% of people bought in without any form of debt, and another 10% already paid the debt back that they did use. When stock markets crash 20% in a week, there is global panic. When crypto markets dip 20% in a week, we call it a slightly below average week. Crypto investors don’t think the world is ending on a 20% dip.
    So what will investors flock to as they close their margin positions in stocks and sell and look to safety, but still want yield. Gold, sure. Bitcoin just might be on that list too. Buckle up and get ready for the ride. All I know is that most bitcoin strong hands like me don’t sell out just because stock markets are spooked.

    • DisappearingCulture | February 10, 2018 at 8:56 am | Reply

      SD,
      Thanks for your posts; you are helping me understand Bitcoin/blockchain better.

      • Imagine there is only one bank in the whole world and everyone’s funds are in it.
        This is the Blockchain.
        When there is a transaction, the one bk is always in balance.
        You don’t take possession of the bitcoin, you only get a personal key showing ownership.

  13. robert sinclair | February 10, 2018 at 1:45 am | Reply

    what do you think?

    https://www.paulcraigroberts.org/2018/02/08/stock-market-rigged-paul-craig-roberts-dave-kranzler/
    If this is correct what hope is there for gold/silver?

    • Robert,

      Do look up on paper contract shenanigans going on between COMEX & LBMA @ the moment at an UNPRECEDENTED rate: Something called EFP (Exchange for Physicals). Without going into too many details, the situation is beyond precarious. Like literally, headless chickens are putting on a pretense of running the show.

      The paper contracts could still get hammered more especially when China shuts down for 1 entire week for Chinese New Year starting Feb. 16. Also if stock/bond market volatility continues & lot of margin calls get triggered in stock markets, there may be a temporary spike in the Dollar liquidity trade (demand for dollars), which can hammer paper metal prices on an acute basis. But those problems can only stay short-lived.

      Over a longer term picture of ~ 6 to 9 months, mathematically there doesn’t seem to be any way they could stretch such EFP charade for that long.

      Consider this: The 10 year treasury yield (interest rate spike) has exposed the precarious bluff for the evil rats that are now cornered. They kept jawboning & threatening to raise interest rates all along. OK, if they weren’t bluffing & 10 year yield ACTUALLY spikes to 3%: It would annihilate stock market, 401Ks, IRAs, pension funds. There will be Occupy Wall Street movements & rioting all over again (this time combined w/ George Soros Antifa poison mixed in). If the rats back off from their threats of raising interest rates, their bluff of past 5 years will be exposed in a major way & the entire EFP scam would collapse like a house of cards before you can spell F-R-A-U-D.

      If the bond vigilantes are forced to show up on the scene, then God forbid…..all bets are off & time to turn out the lights.

      There will most likely be some short term pain & turbulence for physical metal holders. But to put it in crypto jargon: HANG ON, basically HODL & ride it out. The cornered rats will most likely be forced to commit suicide before the end of this calendar year.

  14. In the long term the DOW is going to ZERO. Kaput. There simply won’t be enough of an energy surplus to keep stock exchanges running. Are there any exchanges in Somalia, Chad or Congo? No! The market economy needs surplus energy, without surplus energy to allow for complex economies, the stock market will disappear. Taxes however will remain, as your local warlord will demand his pound of flesh in exchange for protecting you from the barbarians.

  15. Steve,

    I can understand your logic and it makes sense. Just never underestimate these banksters. If the usa will sacrifice the dollar even more and it looks that way you could see even higher stockmarkets. Just look recently in Caracas and Buenos Aires really printing trillions of dollars elevate stockmarkets, real estate etc. just not gold and silver for the moment. I still expect a blow off top as the Don will kick of the infra structure mega project in teh usa to hide the entire economic desater. O yes expect a war or two as well that is to keep the population destracted. So Dow + 30000 here we come.

    • Pieter,

      Yes, we could see 30,000+ Dow Jones. In the article, I stated, “I had no idea how long it would take to get to the 13,000 Dow Jones Level (200 MMA), but we are going there. The one thing the Mainstream and Alternative Media analysts forget to incorporate in their forecasts is the DIRE ENERGY PREDICAMENT.

      steve

      • Steve ,
        In addition to your well know subject of energy this is another angle
        which has though huge impact on the future. Look at this list of top 10 oil/gas exporting countries the usa is not in it. Means they are still a net importer of energy. All the news about the usa becoming the world biggest oil/gas producer never mind they never can without importing oil from other countries, coincedence all these wars in middle east? I don,t think so. These exporters as well produce their oil/gas much more cost effective as they usa can with their fracking/shale operations.

        Export oil nations globally

        Saudi Arabia: 20,1% (reserves are in deep decline)
        Russia: 10,9%
        Canada; 5,8%
        UAE: 5,7%
        Kuwait: 5,4%
        Iran: 4,3 %
        Nigeria: 4,0%
        Angola: 3,7%
        Norway: 3, 3%
        Kasachstan: 2,9%
        Qatar: 2,2%
        Mexiko: 2,3%
        Venezuela: 3%
        England: 2%

  16. Steve: You are worse than Peter Schiff. He says the market “tanked.” The market is down 10%,
    a correction. You say “fair” value is 10% of where it is today’s. Apple would be around $16 paying a $2.52 dividend with 280 billion in cash. AT&T would be at $3.60 with a $2.00 divvy or a 55% dividend; Verizon would be at $4.90 with a $2.36 dividend or 48% divvy. If 3000 points on the DOW is a crash what about silver in 2011 going from $50 to $14….. now that’s a crash.
    And 7 years later it is still crashing. I’ll bet that the DOW recovers this correction within the year and silver will still be close to production costs. And this oil thing isn’t over. They got a lot out of oil out of 20% of the land. Wait till they gear up for the 80% of the ocean. I’ve said it numerous times before. Your message is 10 to 20 years to soon.If doom and gloom is your only answer then we all better just quit living because the chaos will kill 95%
    of us. ( Sorry I have no chart! ) Silver will only go up from here when more people buy it than is mined.This dynamic doesn’t changes.

    • DisappearingCulture | February 10, 2018 at 9:15 am | Reply

      I’m not going to predict where the DOW, S & P, etc. will be, or fair valuations of the markets. I leave that to others.

      *The markets valuations MAY be higher numbers in 10-20 years, but if so the dollar will buy a fraction of what it does now; i.e. the buying power of owning one share of every stock on the DOW will be down. I’d place a bet on that in escrow, with a TBTF bank as the custodian lol
      I do have a perspective of a person with a degree in geology
      *Silver’s price will NOT languish for 10-20 years.

      *As for your oil fantasy, the party isn’t over but the hour is late. “wait till they gear up for the 80% of the ocean”. That is a nutty statement. The financial cost and EROI [not to mention environmental cost] is prohibitive for deep water oil, just like oil that might be in Antartica.

  17. I don’t think precious metals and miners will come back if DOW drops as projected here.
    Look at 2008. Why they didn’t save the day if they were safe havens?
    Gold could go down below $700, silver below $7 gdx below $5.

    • DisappearingCulture | February 10, 2018 at 11:19 am | Reply

      “Gold could go down below $700, silver below $7…”
      Not going to happen, period. Ever.
      Here is one of a few irrefutable reasons, other than that is below their production costs.
      On gold: Russia and China are buying PHYSICAL GOLD every month [approximately]. Planned purchases with a set quantity of currency. A large purchase every time. If the price went way down the physical would evaporate very quickly; collapsing the LBMA & COMEX.
      The job of the COMEX is to manage prices of these key “commodities” within a range. Not too high AND not too low.

      • Agreed dc. What they cannot control is the cost of production; gravity. That’s not gonna hurt until we hit the bottom. And we are falling for a long time now.

  18. Hi Steve,
    Did you manage to get yourself booked on the Stephan Molyneux show? On a related note – are you aware of Martin Armstrong? He has a lot of loyal followers as he seems to nail his forecasts a lot. He has a very cyclical understanding of virtually everything. Do you see things in a similar light? He is fairly skeptical of precious metals whereas I have been a buy and holder of AU/AG since 2001. He does make some convincing arguments but I think Mike Maloney makes a more solid case based upon historical performance of the metals.
    Thoughts?

    Keep churning out the work! – my financial situation is starting to improve and I am going to be able to become a member and contribute to your work and not just poach information for free. Always a fascinating read.

    Dave

  19. Interbank loans:

    https://fred.stlouisfed.org/series/IBLACBW027NBOG#0

    What does this mean? It triggered 08/09. Are they eliminating interbank loans to reduce systemic risk, using central banks as a clearing house? Wild guess. Its a very weird chart.

  20. Look to the us-Bond market.Here plays the music.The shifting from stocks to us-bonds must work.
    What’s the interest rate from the us-bonds.What’s the bond value.Does it work at a longer scale with those bonds?
    Otherwise the money would flow to the PM?

  21. dow 3,000 ? Lets see if it can even get below 23,000 first. Lets see if it can get below its 200 dma.
    This sounds like Charles nenner. Dow to crash 75%. Charles said market crashes in years ending in ‘7’. Lol. So now is he going to say, market also crashes in years ending in “8” ?

    There is still way too much QE sloshing around out there, for the markets to do anything more than a modest correction.

    whats more likely to happen, is that Money Velocity will start turning around, and going back up, and we will start to see some inflation that is more obvious than it has been since 2009.
    Stocks tend to do fairly well in the initial periods of rising inflation. People will seek to retain more buying power, and stocks will continue rising, after these modest corrections. There has been next to no volatility in a number of years, so now we will start to see some, and markets will actually start climbing that wall of worry. They really haven’t climbed any wall of worry with volatility so low. They actually rode the sea of QE. Now the easy and smooth gains, will turn into more gains, but with some more buy the dip opportunity. Half of the US is out of the market. So now they will start coming back in, on these dips. The Dow has a much higher probability of going to 40,000 in the next couple of years, than 3000. We will see a megaphone top before it crashes. We have ZERO megaphone development since the 2009 bottom. Now we are just beginning the formation of the megaphone. The wall of real worry. This is when you will see more and more articles just like Steve’s warning of impending doom. We are years away from any ‘crash.’ The only thing that will likely ‘crash’ here is oil prices, which will provide a nice tail wind to stocks once again, just like it did after 2014. That gave us a 4 year tailwind to now. The headwind will be slowly rising rates, but that is going to slowly absorb the QE. when you see a vix of 50, you know thats a screaming buy, bc finally the massive complacency since 2010, is starting to turn into that wall of worry. Markets climb walls of worry. Never forget that, and you’ll make way more money, than following doomsters like Steve.

    • “Half of the US is out of the market. So now they will start coming back in, on these dips.”

      That’s an IDIOTIC statement & no other way to put it politely. Those “Half of the US” are debt-slaves who eat tide-pods for nutrition & live in Grandma’s basements. They have NOTHING to come back with.

      And then they’ll die a slow death happily thereafter.

      THE END.

  22. Mike,
    Your so 1900’s. The 30 year rose 47 basis points in less than 2 months. And your talking slowly rising rates?

  23. Meh. Doubt it. In fact I’ll make a prediction. This little correction is over, or almost over. Dow , s&p keeps heading higher- because that’s what they do. Gold & Silver sideways & down – because that’s what they do. Could be wrong, but I doubt it. In any case, not like anyone here has a good track record with predictions actually working out.

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