By The Gold Report
Technical analyst Clive Maund discusses Friday’s stock market steep drop and how it affects precious metals.
As you are, or should be, aware the big market plunge on Friday came as no surprise to usit was predicted just a few days before in the article BROAD US STOCKMARKET MELTUP update, in which the point was made that habitual victims Mom and Pop were at last getting stuck into the market, making the danger of a violent reversal even greater.
What should distinguish this bear market from the one in 2008 is that investors are not going to be able to find safe haven in the Treasury market, which is already plummeting and a reason why the stock market has a last started to cave in as interest rates spikesee the article CONTROLLED DEMOLITION OF THE MARKETS in which we examine long-term charts for the dollar and for the Treasury long bond proxy TLT, with the latter looking very bearish indeed. One big reason for this is that back in 2008, there was room to lower rates, but now, since official rates are near 0 to start with, and debts are at crushing astronomic levels, this policy tool no longer exists. We can see on the chart for Treasury long-term bond proxy TLT that it has broken down and is now dropping like a rock. This time round investors look set to be hit by a “double whammy” with both the bond and the stock markets dropping in tandem and the higher rates exacerbating the stock bear market and resulting economic depression, especially for those who have fallen for the hype and gone on a debt-fueled spending binge.
In the recent past we have gone for a number of stocks which look set to rise due to their individual merits, and so far they are looking alright, and we will be looking at a few more of them in coming days. Don’t forget that even during the great crash of 192932, some stocks actually rose, although there were no screens in those daysyou had to wait for the newspaper to arrive to see what had happened.
So, we will wait to see how futures look set to open on Monday, and whether the PPT (Plunge Protection Team), considerably more powerful these days, and with much more largesse than the impoverished downtrodden little guy, can hold back the floodgates.
Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years’ experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.
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1) Statements and opinions expressed are the opinions of Clive Maund and not of Streetwise Reports or its officers. Clive Maund is wholly responsible for the validity of the statements. Streetwise Reports was not involved in the content preparation. Clive Maund was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
Charts provided by the author.
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund’s opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stockmarket analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.