Now It’s Global Stock Markets In Death Plunge – Wall Street Underground

By Nick Guarino | August 28, 2015

Bear Market Started.

Wall Street’s Desperate Spin Not Working

What a week, some of the biggest losses in stock market history. And it’s far, far from over. This one scared the tar out of Wall Street and our banker buddies. They have pulled out all the stops, desperate for a rally back. The spin machine is in overdrive. Behind closed doors, they are scared as shit. They know that they cannot stop the flood waters because the dam is cracking.

Look at the chart, it tells it all:

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An 18,400 Dow, that took 7 years to build, takes 3 months to lose 1,000 points, 18,400 to 17,400. And then, in 3 days it drops from 17,400 to 15,400. A 2,000 point loss, its biggest, fastest ever. Then came the dead cat bounce. With all the stops pulled and all the money they could muster, Wall Street spin-meisters on hyper-spin could only manage a little over 1,000 point rally back. Pretty damn pitiful.

It is not unusual after a near death experience like we have seen and at the start of a bear market, to see a 2/3 retracement. In this case, a dead count bounce to 17,400 DOW could happen. SO at the present level (midday Friday). It remains to be seen if they can get the market up that far. So far, it’s been a pretty pitiful 1/3 rally back. And here is why I have my doubts that they can do much better.

In the trading networks, bank to bank, like Reuters and Bloomberg, there is an obvious lack of cash. After the commodities plunge, china stock market wipe out and now the US stock market death plunge, I am seeing liquidation. Somebody is losing their ass. In fact, a lot of somebodies are stone cold broke. Which means there is no rocket (money) fuel left to power the market ahead.

Translation, it’s a great time, if you so incline, to add positions and round out your holdings. I have posted a lot of trades in what seem to me the best instruments to use in the past week. Please go to Nick’s Picks stocks to see my past offerings.

You know me, I don’t mince words. This is the start of what will be the greatest financial wipe out in Human history. It’s across the board. Stocks, commodities, currencies (except for the dollar). And it’s across all borders, US, Europe, Asia, Latin America and emerging markets. It’s a massive deflationary wipe out.

What you saw this past week will be seen in the future as a minor swoon. The frequency, velocity and veracity of the downward plunges will become bigger and faster. The losses will stretch far and wide and few will survive in its wake.

I would be remiss if I did not mention crude oil bases WTI light. Crude oil has rallied off of its low of $37.78 to close today at $45.10, another joke dead cat bounce. Look at the chart:

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In the past three months, from $65 a barrel to a low of $37 to now trading at a rally back of $45 is pretty sad. Eight bucks off of its recent low. It’s even worse when you consider the fact that Crude is off its recent cycle high of $100 a barrel. Losing over half its value…. Still.

As in stocks, use this rally back in oil as a opportunity to add more positions if you are so inclined.

Happy hunting,
Nick

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