Hurricane Correction forming. Path of Hurricane Correction is very much debated.
Will it hit Italy?
China?
The US?
Fact is people sense te hurricane is out there but do not want to contemplate its destruction.
The SP500 looks on the edge of a classic bubble formation and the DOW is approaching its highs:
The Dow repair is nearly thereCREDIT: ADVFN
QUOTE from John P's Market Laboratory
But the flashpoint for the next crisis is likely to be in Europe, especially Italy, he maintains.
“I think the choice of Europe is…going to have to put [all the debt] on the balance sheet of the European Central Bank,” he said. “If they don’t, then the euro zone breaks apart and we’re going to get a 50% valuation collapse.”
“Greece,” he said, “is a rounding error. Italy is not…. And Brussels and Germany are going to have to allow Italy to overshoot their persistent debt, and the ECB is going to have to buy that debt.
If it doesn’t happen, the debt triggers a crisis in Europe, [and] that triggers the beginning of a global recession”
But, he added, “there are so many little dominoes, if they all start falling, one leads to the next.”
The U.S. economy and markets are doing very well now, but make no mistake—there will be another crisis. Your guess on where or when it will happen is as good as mine.
UNQUOTE
Will it hit Category 5 (Crash) or will turn out to be just a Tropical Storm (Correction)?
we generally refer to a correction as a period where the stock market drops by 10 percent of its value. This is what we saw happen in early 2018. In the past 20 years, the S&P 500 Index has experienced 10 such corrections.
https://www.twincities.com/2018/08/25/your-money-the-difference-between-a-market-correction-and-a-full-blown-crash/
Central Banks Won't Let Markets Crash
It is easy to be a doomster and see control of the central banks slipping away and a massive catastrophic crash unfolding. I was very bearish up to the correction of February. I was missing a puzzle piece. Love or hate them, the Fed, ECB and Bank of Japan really do know their stuff.
They might allow markets to wobble but they won’t let them crash. They have the tools and the credibility to pull that off in all but the more stressful situations. Long gone is the arrogant, ‘here is our policy, suck it up’ attitude of the staircase of tightening that ultimately brought the roof in in 2007-2008. Do many remember that little escapade?
https://www.forbes.com/sites/investor/2018/08/31/central-banks-wont-let-markets-crash/#517b48f675c4 |
