With the Dow Jones Index falling 665 points today, the risk of a large market correction has just increased significantly. Ironically, I discussed the very indicators that were setting up for a huge market correction in my newest video which I recorded on Tuesday. Unfortunately, I wasn’t able to get the video posted on my Youtube channel on Friday morning and now on my website until late in the evening.
Regardless, the 665 point decline is just the beginning. Oh sure, we could see a continued selloff and then a move towards 27,000 or even higher. But, for the stock market to move up to 27,000 or 30,000 means absolutely nothing. Well, maybe it provided investors with a brief feeling of higher wealth until the markets really crashed.
In my newest video, I provide some fundamental analysis and indicators of why the Stock Market is reaching totally unsustainable levels. Also, I discuss what would happen with the gold and silver price during a big market correction. And, it resembled what happened today in the markets. The gold and silver price will initially selloff because most trades are done via algorithms. Thus, when the markets crack by 665 points in one day, it does damage all across the board.
Furthermore, the gold and silver price are based on their commodity-price mechanism… and this is the cost of production. So, if the price of oil declines, so will the gold and silver price… FOR A SHORT WHILE. However, after the initial selloff, I see both gold and silver moving higher as the broader markets continue to decline.
I believe investors are quite worried about this 665 point decline in the Dow Jones Index, especially after it followed another 300+ drop earlier in the week. But, the Dow Jones Index only fell 2.5% today. That’s peanuts. I see a 40-50% decline coming, and even lower. That’s at least 10,000 point drop in the Dow Jones. If investors rushed into gold because they were spooked by a 2,000 point decline in the Dow at the beginning of 2016, what happens with a 10,000 point decline??
As I stated in the beginning of the video, the Dow Jones Index at 26,100 was the same situation as football fans sitting in the Nose-Bleed section way at the top of the stadium. Please check out the indicators in my newest video, and you will be the judge just how close we are to a major market correction or crash.
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Steve,
It seems that insanity knows no bounds. There may be a lot more in this melt up boom to come but for the smart ones and for all of your readers that missed the last time, gold silver ratio hit 80 to 1 today. Great time to trade gold for silver and a great time to buy silver @$16.58/oz. bid. This may be one of the last opportunities to buy at cost.
For anyone still in cryptos, good time to get some money out, if you can, and buy PMs. Definitely time for those still in stocks to take some profits and buy PMs before the window closes. For the adventurous (those that believe the markets will survive) it is a good time to buy miners.
If you don’t hold it, you don’t own it. Buy for cash and stash.
SteveW
“Stack and don’t look back.”
I seriously doubt it.
PM’s got whacked, they don’t have official support other than the cost of production. In fact, they are driven down.
Stocks and housing have official support. What this means is that any selloff in these assets is met by central banks buying to keep them at high levels.
So stocks can dcool off, sure, but there will never be a panic sell off again. They will just meander along and rise higher, and precious metals will just meander along lower, as every drop in the stock market is met by official intervention, and every rise in PMs is met by official intervention.
“So stocks can dcool off, sure, but there will never be a panic sell off again. They will just meander along and rise higher,…”
If you lived near me I’d like to place a bet in escrow that you are dead wrong on that. The fact is now there are algos that will initiate big sells when stop losses are triggered.
Now they may shut down the “markets”; halt all trading for hours, days, weeks…whatever it takes. That is the only way to stop a coming massive selloff. But then the pretense of them being free markets is over.
Dolph,
You are right that the PMs got “whacked” and it was the result of manipulation but your conclusion is totally wrong. The Comex is transferring all of it’s physical gold delivery orders to London because they can’t fill them. The time is rapidly approaching when the paper PM market is going to freeze up and no deliveries will be made. It is then that all hell will break loose, if it doesn’t happen sooner because someone starts a war or there is a liquidity crises erupting in China or Japan.
Stocks, bonds and housing have all been propped up by the FED but the FED is out of ammo and so they are tightening into a fragile market. Interest rates are going up. Maybe fast, maybe slow but they are going up and it is this very fact that spells doom for stocks, bonds and real estate.
So it is time to start off loading the doomed assets and move into the grossly under priced ones – SILVER. If you don’t you are a fool.
The DOW will crash by atleast 70-80% Steve. This will be at a minimum a 12 year period of ZERO or negative returns. The crash began after the blood blue moon, a powerful omen. It’s all fake and what is fake doesn’t last, the emperor has no clothes.
My friends, the good ship Titanic America is sinking.
The ice cold water of debt has been flowing into the hold in increasing amounts every day.
Meanwhile, the bankers have been in the engine room, desperately trying to keep the stock market boiler, the bond market boiler, the housing boiler, etc fueled with fiat fuel to keep the ship moving, because they know that if the ship stalls it sinks faster.
The people in the lower decks are mostly asleep, not aware of the disaster ahead. And on the entertainment decks, it’s party as usual.
Two groups of people are on the bridge, fighting over who gets to steer the ship and in what direction. In the end, it really doesn’t matter who is at the wheel.
The real tragedy is there are not enough gold and silver etc life boats to save the passengers of this doomed ship. And when they realize that the ship is really sinking, it will be too late to find the life boats, because there won’t be any.
To those who think this ship will go on forever and never sink, I wish you well.
My advise to you is to grab hold of the rail and take some deep breaths. The plunge is coming.
I’m riding the silver boat. Don’t anyone follow me and try to get on board coz I will push them off. MY boat. Only tiny though… no room for more than 1. But I encourage all to buy their own now while still available. IF they are willing to listen and learn.
Funny, but some reports indicate that after the initial impact, the Titanic’s speed was initially slowed, but when attempts were made to increase the speed, the rate of seawater flow injected into the compartments increased, accelerating the sinking process. But that’s ok, because the FED is likewise trying to speed the ship up, intentionally or unintentionally, by increasing the interest rates. See ya at the bottom mates!
The US economy is similar to a bike. In order to keep the bike in an upright position it must keep forward momentum otherwise it tips over. In addition to interest rate increases that will slow the economy’s momentum, we have the most political polarization times since the Civil War that will also destroy investment sentiment.
Excellent work, Steve.
Gold is the ultimate safehaven but beware it may not rise straight away as overlevereged portfolios getting squeezed and everything goes. In 2008 it dropped to 681 (from above 1000). Silver and Platinum dropped worse as they are primary industrial metals. But I wouldn’t bet there will be buy the dip opportunity – PM markets are tiny and this time it may be different.
How are you playing the crash, guys? Primary concern is whether financial institutions you are dealing with will be there to pay your shorts/puts. Thoughts?
Daniel,
I work on the simple assumption that if the financial system crashes then the banks will close and will stay closed until some understanding of how they can function again is established. This nearly occurred in 2008 and was stopped by massive currency creation by the central banks to guarantee the inter-bank liabilities. That is unlikely to be an option next time and so the banks may stay closed for a long time.
If the banks stay closed you will not be able to get your currency out whether cash, stocks, bonds or any other form of ‘paper’ currency from them that normally needs a bank’s intervention. The same applies to cryptos and also includes operations such as GoldMoney and Hard Asset Alliance which, although buying and storing PMs in your own allocated account, still require you to have a bank account to buy and redeem currency for PM. Sure, if you have enough gold with these operations you can take physical delivery yourself but the minimum amount is high and you have to get to the vault where the PM is stored.
As a consequence I have my own PM under my own supervision and plenty of cash with just enough left in the bank to meet day to day requirements. In other words I’m out of the system apart from the essential amounts for day to day living.
I find it strange that there’s all this analysis out there about this market or that but very little about how you go about living if the banks close. It’s worth just 5 minutes of thought of what you would do if the banks closed for a month and how you would do it.
Brian,
I’m with you on banks closure and being ready for a reset. Still, tempting to play the bigger short…
In 2008/9, every chart went down hard. It almost killed the system. Net energy decline is unstoppable, but in my opinion the leverage, debt and instability in the financial system cannot afford a minor pullback in markets. It won’t survive. Markets are completely crazy, running for the hills, in crypto’s for example. Next up, stimulus. I’m starting food preps this month. Already have some, but i need more. There’s a lot of managed currency, it will continue to be managed until the receptionists run out the door with hair on fire holding a goldfish in a shaky bowl of uncertainties.
It fell by 666 points, NOT 665.
MAKE KILLUMINATI Federal Reserve GREAT AGAIN!!!
While I personally am not into this numerology and date prediction stuff, I am convinced that the people who control the system ARE into it and do use those as key indicators for other insiders. Recall the 777 point drop in 2008 which was essentially the beginning of the carnage?
My gut feeling is that the 666 is the indicator that the real correction is starting now. Might buy some more silver today.
Thanks for this fine video. In fact explaning what we all know…
What you explaned very well is that gold ( and silver) first will follow the decline because of the algoritmicks. BUT THEN when FEAR takes over gold and silver will surge and markets will continue to decline.
LAST safe heaven.
Yes I took my protection. I hope you all have yours already
You’ve been preaching panic selling of the stock market of 50%+ for many years now. I own
a number of stocks with PEs of 16 or less. Why? Because they earn profits every year, that’s why. You can’t just scare people with crashes. If corporations make money prices of their stocks will rise. Crpto currencies are giving PMs all the trouble they can handle. Why? Because money went into crptos and not pms. Silver demand must rise or silver will languish. In Apple alone they sold 77,000,000 million phones with 1 ounce of silver in 4 phones. Industrial demand will increase every year. Supply will be more costly to produce going forward. These are the dynamics that move silver. Your articles should mirror your friends like Cloud, Morgan and Butler busting their butts to interest customers to buy silver and not try to hope the USA crashes so silver can rise.
“If corporations make money prices of their stocks will rise.”
Wrong. Central banks keep buying corporate bonds, and companies use those funds to buy back shares. This is what drives the prices.
Sheeple then get convinced that stock prices rise, thus start buying too.
It’s psychology. Had there been no such interventions from central banks, the crash would have happened already.
Central banks must not be bag holders.
Above Joe Lindell states:
“Silver demand must rise or silver will languish.”
I agree with that more than some on this site. Gold is being bought in huge quantities by Russia and China [government & individuals in China], also India and some other countries like Turkey; both individuals and central & bullion banks. Silver has not had this kind of demand. But there are accounts of China & India buying more silver. And a new video from Russia shows stockpiles of silver in the vault[s] with their gold. So that could be changing.
On the retail front in the U.S. sales of silver from internet companies must be way down judging from the low premiums out there. Like junk silver at spot price, .999 generic at 29 cents over spot, and sovereign coins at 99 cents over spot.
Joe,
If you don’t realize the markets are in a huge bubble, you are totally oblivious. That’s okay, most people didn’t see the 2008-2009 crash coming either
steve
Hi Steve, I was just listening to the Berman Kunstler interview and Berman believes you have the commercial net shorts incorrect. I was just wondering if you have listened to that interview yet? I don’t care if you’re right or wrong about it. I believe oil will be 200$ or 20$ in the coming years each extreme is really bad.
Adam,
Yes, I have had two different people share with me that the COT STRUCTURE is different over the past few years due to including additional trading vehicles. Also, it’s not the Commerical Producer-Merchant-Processors that are the BIG SHORTS, but the Commerical SWAP DEALERS. Please look at this chart: https://www.barchart.com/futures/commitment-of-traders/technical-charts/CL*0
Make sure you have the 5-year chart. You will see that the Swap Dealers are the largest Short Positions. However, they were also the largest Short Position Holders in mid-2014, before the price crashed. What Art and this other individual are claiming is that these Swap Dealers aren’t the true commercial shorts. However, they WERE THE BIG SHORTS in 2014, and they are still considered COMMERCIAL TRADERS.
Regardless, I see things a bit differently than Art Berman because Art believes the oil price is mostly due to SUPPLY & DEMAND. I believe the price is mostly a factor of COST OF PRODUCTION, MONEY PRINTING, INTEREST RATES and then SUPPLY & DEMAND.
steve
Thank you for your response and clearing that up for me. I really appreciate all the work you do on this extremely important topic.
Lolz steve, when there is no correction in dow jones index, u complain. When there’s one correction , u complain.
Now the keywords are risk risk risk and risk. But u never emphasize the risks investing in silver and gold. It has been looooooong time … just forced to be patient, right mate? Haha … so much for $12 per barrel oil forecast.
Muhammad Aidid,
Yes, you are correct. Humans today want IT NOW. Forget patience and hard work….LOL. I get it. So, the system goes on a bit longer, but the crash will be even worse. So, you are more than welcome to jump aboard the BIGGEST PONZI SCHEME IN HISTORY. I don’t have a problem with people who do.
However, I am not complaining. You may call it that. Rather, I call it fundamental analysis.
When people invest in Gold and Silver, it’s for the long haul. Also, some call it, INSURANCE RISK against the coming crash. So, people need to make their own investment decisions. If you call spending money on insurance as something that has been Loooooongg overdue, so be it. However, I don’t know too many people who complain about paying for insurance they never use.
steve