Well known market analyst Robert Prechter, who strongly favored stocks in March of 2009, says it’s time to get out:
I think this is the third best selling opportunity in the last 10 years. The first one was in 2000, the next one was in October ’07, the third one is somewhere between now and a few weeks from now. I am very negative again. Just to set the record straight, a year ago I was very very bullish on the market looking for 10,000 on the Dow. So, we’ve got there, we’ve exceeded and there are all kinds of reasons why I think this is a selling opportunity.
…
The market is overvalued, overbought, it’s losing upside momentum, there are too many optimists in the market by several measures – this is the complete opposite of the environment a year ago in early March.
I think you can short just about everything, somewhere between now and May we’re going to have a real rollover. Think about this progression. In October the bond market topped out. In November the Dollar bottomed. In December Gold and Silver and the utilities average, go figure that one, topped out. In January the CRB Index of commodities topped out. The stock market is the last domino holding up.
…
We’re heading into another deflationary bout just as we had in 2008.
[source: Bloomberg Video]
[Hat tip: Distressed Volatility]
The stock market is a disaster waiting to happen, and as Prechter says, the US Dollar may be the only safe asset when it turns. Prechter did not mention gold as an investment to be holding when the turn happens, and this is likely because he sees a similar situation as in 2008, when precious metals, along with the broader markets, got hammered in a downward spiral. In a stock market collapse, the short-term move in gold could mirror equities, especially if paper gold holders, such as those who hold shares of ETF’s like GLD or SLV, start running for the exists.
However, we will suggest to our readers that even in a deflationary spiral gold may still perform or at least drop less than other assets, especially because international buyers like the Chinese central bank may be interested if gold hits that $950 – $1050 support area. During the 1930’s, which was a deflationary environment, gold followed the stock market for a while, but eventually decoupled and went in the opposite directions, to new highs, with gold mining companies experiencing massive gains, as depicted in the following chart:
Of course, some deflationists like Harry Dent have suggested that we could see gold go as low as $250 per ounce if deflation were to take hold. But, as Dr. Marc Faber suggested in a recent interview, if we get to $250 gold, we are going to have some very serious problems elsewhere. Howard Katz, an SHTF Plan weekly contributor, suggests that we may not see a similar move in gold in the event of a stock market down-turn.
Any short term trading of gold instruments could be dangerous, thus, we are taking the approach of long-term investment. Regardless of what gold does in the near-term, we are holding. Our guiding principle for this is something Martin Armstrong has suggested about gold, which is that gold is not an inflation hedge, but rather, a hedge against government instability. If there is one trend that you can bank on, it’s that government will continue to make bad decisions which will ultimately lead to a debt crisis and loss of confidence in the United States by not just foreign investors, but American citizens as well. This is when gold will really make its move.
Going back to Mr. Prechter’s current assessment of the markets, whether you are holding gold or not, if you have any stocks, especially here in the US, it may be time to get out and enjoy the profits, as many a signal (technical, fundamental, psychological) is suggesting the rally driven by money printing and headlies is over.
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Let it roll. This fraud of a stock market is being sustained by free taxpayer money that JP Morgan is getting from the Federal Reserve.  The U.S. Treasury market is also being sustained by the Fed’s inflationary money printing.  JP Morgan is manipulating the gold and silver markets to make the dollar value appear higher than it really is. Washington D.C. the Federal Reserve, and the major banks in New York City are a criminal syndicate sponsored by Barack Obama to bring total destruction to the American middle class by devaluation of their assets, increased taxation, and government control of all sectors of the United States economy. It’s happening right in front of your eyes.    There will be two classes of citizens left by the the time Obama reaches the end of his current term.  The rich elitists and the working class poor.   Â
Paul Revere,
I agree! Well said.
I agree with Paul Revere as well. Unfortunately for me, I’m already in the “working class poor” mode. I think that the PTB organized a criminal syndicate over the last several decades that reflect what Paul Revere wrote, but it is/was much larger in scope. It’s global. It involved all the various factions in the world that hold the true power of control and was humming along beautifully until they hit a snag. Now I think they are splintering into a “every man for himself” scenario. And perhaps this was not unexpected by them. Always remember the huge egos involved in these affairs, and the fact that the manipulation doesn’t run like a top down business structure such as a corporation, or the military. Now is the time for TPTB to further feather their individual nests as they will be entering a chaotic period of time, very soon, with unknown consequences for them or us. One thing you can be certain of is that “they” don’t give a hoot about us, never did, never will.
Comments…..  I doubt this will happen before the November elections.  The PPT will see to it.   Historically however there is the usual ‘summer swoon’ for many stocks and some of those even represent good buying opportunities thereafter.    I expect many a pundit will confuse said swoon with a harbinger of immiment things to come if the May outlook doesn’t materialize.   Consequently I look at this Prechter Piece as being a touch too micro and not enough macro.   IOW, I don’t think he truly understands the big picture here.
RH
Yeats – you’re right on there with your analysis.  It’s MUCH bigger than the US.  The global powers that be have been manipulating the planet for centuries.  In their current implementation, the CFR, the Trilateral Commission, and especially the Bank for International Settlements (BIS), which is the central banker’s central bank, Rockefeller, Brzezinski, Carroll Quigley, the tax exempt foundations (Carnegie, Rockefeller, Ford, Guggenheim),  etc, etc, have all of their plans going along nicely. These people make decisions on scales that change the planet, not simply the US or any other particular country.  They make their trillions (and now quadrillions) by making and breaking nations.  They transferred power and wealth from Great Britain to the US about 100 years ago, and they are now in the process of moving it from the US to China and thereafter, India.  Their efforts are planned and executed over decades and centuries, not years or months. These people’s timelines might get altered, but they don’t make ‘mistakes’ in the common sense of the world.  Nothing is out of control, unless they specifically intend it to be so.  Their plans will be implemented, just as they always have been in the past.  The trick is to be on the right side of those plans (financially).
For anyone unfamiliar, I would highly recommend reading up on CFR, Tri-Lat, BIS, Carroll Quigley, etc. Â There is some great info out there from folks like Patrick Wood (www.augustreview.com and http://www.augustforecast.com) as well as Dr Stan Monteith at http://www.radioliberty.com and many, many other sources. Â Some great audio programs from Stan Monteith include the audio programs below:
Carroll Quigley, Norman Dodd, The Enemy Within, Geopolitics, The King Makers, Secret Societies.
Yo Paul Revere ~
Â
I personally see one LAST upward movement of pseudo economic recovery/prosperity just prior to the midterm elections in November of 2010 and lasting for God alone knows how long after the elections. I have a strong ‘gut’ feeling that the whole economic house of cards is going to come crashing down in early to mid 2011. If the interest rates were to raise to just 5% the United States would be unable to service even the interest on their debt. About the only ones buying our Treasury Notes right now is the Federal Reserve.
Â
Went to the local knife & gun show this past weekend; you wouldn’t believe the people there! Everyone seemed to be buying copious amounts of ammo or another gun. The former middle class knows that something unpleasant is headed there way. They may now know exactly what they are preparing for ….. but they are stocking up! We do live in interesting times.
Â
Comments….. This will happen before the November elections, they cant afford to lose, they will steal the retirements, 401’s and the pension funds in the name of ya all gota help us, then they will stage a false flag event and then claim sorry guys those wink, wink nudge, nudge mean ol’e Al Quade made us lose all you money. Sorry now you get to go to camp, because you have no means of support, we will let the people who came here to do jobs no one wanted live in your homes. Free
What will be the catalyst for this next stock market crash?
I always thought that the next crash will be the “big one” much bigger than the 2008 collapse. I thought it would have already started given the unsustainable debt load our nation keeps taking on.Â
I now realize that wallstreet is actually disconnected from mainstreet….so if this is the case, what will be the catalyst for the next big crash? If wallstreet isnt worried about the debt of our nation now, when will wallstreet worry about it?Â
Tony, Wall Street is not worried about it at all. The bankers that can afford it have contracted private security firms to protect themselves from citizens’ expected violent reactions. The lesser bank officials are already carrying side arms.  Among their many excesses these bankers have their overseas chalet’s and island getaways already secured and fully stocked with all the luxuries of life.  If you have noticed there is also a trend in Washington D.C. of politicians taking early retirement or other forms of leave so they too can prepare for the collapse of this country and it’s allies in Europe.  It’s my guess this nations supposed 8000 tons of gold in Fort Knox is long gone.  Once the bankers and the politicians feel they have sufficiently drained the financial holdings of American citizens they will either depart the country altogether or move to predetermined safe locations for their protection and that of their families.  The rest of us will have to fend for ourselves as best we can under martial law and worse.        Â
The trigger for the next crash may well be the coming war between Israel and Iran. It gets closer with every day that passes. Why do you think Obama is scrapping our nuclear deterrent? Its a fig leaf for Iran.
 He is desperate, and even the Russians and Chinese are getting on board with him, because they know that war is emminent and they are hoping to avoid that if at all possible. The markets will crash when Israel attacks Iran and when that happens the major players will rush to Gold for safety. Even Soros has a safety net of Gold.
Its comforting to know that some banksters are packing. They can turn the gun on themselves when the Crash comes. Its faster than jumping out of a window.
God speed them on their way to hell.
Comments…..I am buying oil stocks. Why, because the muslim ragheads want to get the price of oil back to over 150 bucks a gallon. It only costs them 2 bucks to suck out a barrel of oil and their tribe wants to empty the pockets of the infidels while they install sharia law to enslave the world.
Let it begin -Come Armegeddon!
I gotta say I agree with Tony on this one. Unemployment should stay steady or go down slightly, companies should be able to maintain profit for the rest of this year, and the likely continuing talk of a recovery will also continue. As Tony asked, why would the stock market go down now? I think it would take something crazy to happen for the stock market to really crash in 2010. Anything is possible though.
I also want to be clear that I do not think Robert Prechter is wrong when he says the market is overbought. It is extremely overbought. But that doesn’t mean the market crashes. That means it may correct to 10,000 and then slowly climb to 10,700 and then go back to 10,200. A normal up a little, down a little market.
I’ve had my popcorn ready for the big show for quite some time. I thought it would have happened by now – my guess was for late last year.
The most interesting things to keep an eye, IMO, will be how the PPT tries to fight it…
…and the reactions of various, everyday people. I’ve mentioned the possibility of another serious downturn to several, pseudo-random people (like a technician at my dentist’s office). They looked at me like I’m completely nuts.
My point here is that it seems most people are ignorant to the fact that our current economic situation is probably best compared to the Great Depression and Japan’s last 20 years…both of which saw extended bear markets…
Granted, that does not necessarily mean we will see the same thing here – but that’s what I’m betting on.
Don’t plan investments based on the success of Homestake Mine stocks in the 30s. You hear that advice a lot because Homestake is the ONLY mine for which records are available. And it should be obvious that even if the advice is good it only applies to companies that remain in business. So be careful.
Rick, I’ve had the same blank stare from people when I mention the coming double dip in the economy.   Eric King of King World News said it best “the stimulus is the economy”.  Lindsey Williams stated that where possible a person should get out of everything backed by paper, including the U.S. dollar, he’s predicting a 50% devaluation in the U.S. dollar soon. The one thing all readers should recognize is that the U.S. government now will do anything to preserve themselves and the status quo in Washington D.C.  including wiretapping, assassinations of citizens, seizure of personal assets, arrest and confinement for an indefinite period of time are all made into law and can be exercised by them on you if they judge that doing so ‘is in the national interest’.     A more subtle theft of citizens’ personal and national wealth is occuring by the actions of the Federal Reserve and their printing of money for New York based bankers at zero interest so they can complete the takeover of the stock market.  The Fed is also propping up the failed U.S. Treasury bond market with money printing.  Money printing to this extreme will destroy the value of the U.S. dollar making wage earners poorer when they try to meet their financial obligations at home.     So, the entire system of civil rights and the remaining financial integrity is going to deteriorate further, a lot further, contrary to what the current administration is relaying  to the public through their proxies in the mainstream media.  The prudent will prepare for the event. The rest can hope for change.Â
Rick Blane –
You might as well just save your breath where the sheeple are concerned. American Idol, Dancing With the Stars & and the Biggest Looser are all that the majority of US citizens seem to care about. Most are so brain dead that I am surprised that they can even tell time in order to know when their favorite programs come on.
You got popcorn? I’ll bring the milk-duds and we’ll do this thing up right. Most of the elites are too stupid to realize that they don’t have a place waiting for them in one of the DUMBs (deep underground military bunkers). When the true PTB retreat into their hidey-holes, they will be left up here topside with a whole bunch of pissed-off people.
As far as relying on their hired private security to protect them goes ….. good luck with that one!!! Their private security will be the ones doing them in!
God Bless & good luck to all ……. we’re going to need it soon,
Comments…..I don’t think the market is preset as some people might tell you, the reason is those who manipulate it, based on going short or long sit back and watch how many suckers take the bait before they pull the trigger either way. The one thing that is known for sure is the end of the maket and the economy all together.
Yeah, the market is overbought big time. This doesn’t mean however that we’ll be crashing anytime soon.
Prechter has been calling this for a long time, so long I’m surprised he’s still sticking to his story. Ultimately he will be right I think, but I believe we are still a ways away from meltdown. The list of people calling for a top continues to grow by the day; again contrarianism would say that we still have a ways to go. Add Meredith Whitney, Harry Dent and many others who don’t understand how these high valuations are holding up.
There simply is no understanding the markets anymore as they decoupled from Main St. sometime back in early/mid 2009. Somehow we have created (I guess I should say our leaders have created) a system on paper that looks good yet plunges 95% of the population into depression. Pick your poison here, there are many factors at work.
But as long as we have the PPT, fantasy mark-to-model accounting, endless money printing, bought and paid for MSM, I don’t see any change until the PTB deem it time for change.
I’m not on the everything is great gravytrain like the MSNBC idiots, but I do admit I originally underestimated their ability to make chocolate out of cow patties and I won’t make the same mistake again. I give it until mid/late 2011 at this point for a sustained meltdown.
I’m no longer fooled by these stories of “big crash coming next week!!”
The next story tomorrow will be how the PPT has serious control of the market and can avoid big crashes….
What are we to believe?
Don’t get me wrong,I still have plenty of gold,but I take these imminent crash stories with a small grain of salt.
the andrew mcguire whistleblower story is fascinating. it certainly has the potential to be the giant canopener in the sky ( i hope)…