ArabianMoney

Print this page
Banking & Finance Sign Up for free Newsletter

Will financial astrologer Arch Crawford finally get the stock crash right?

Posted on 15 November 2010 with 6 comments from readers

Today is the final day for Arch Crawford, doyen of the financial astrologers to redeem his tattered reputation. Earlier this year his forecast of a major market correction between August and the end of October caught the attention of his followers, and only real devotees gave much heed to a mid-November extension (click here).

So now we arrive at Monday 15th November, the supposed day of the crash. Will it actually happen? Skeptics will laugh out loud but market analysts are far from rocking in their seats (click here).

Market heading down

Last week’s market losses could well be the start of a major counter trend to the long rally since March 2009. Nothing goes up forever, and this rally in the face of an almost non-existent US economic recovery does look overdone.

Even in China there are now serious concerns that its post-crisis stimulus boom went way over the top, creating inflation – something that has not been helped by Fed money printing. The biggest snap in stock prices last week was in Shanghai.

October’s level of confidence among US retail investors was also ominous. Big surges in confidence always come before a major correction. The question marks over the viability of QE2 and money printing now suggest that this particular moonbeam may not have been worth chasing.

Falling to earth

What happens when stock markets reach dizzying heights without the fundamentals to support them? What happens when anybody who might buy is in the market? You get a correction.

Is it all in the stars? Well, Mr Crawford has looked a bit of an idiot this summer, perhaps he will now be right.

Posted on 15 November 2010 Categories: Banking & Finance, Bond Markets, Global Economics, US Stocks

6 Comments posted by readers:

Comment by David - 15 November 2010

Check out spaceweather.com. There is a good chance that some M class flares are going to break out. We should also expect heavy solar wind on Monday and Tuesday. You might want to buy some put options on your favorite loser stocks tomorrow morning.

Comment by Andy - 15 November 2010

I was just looking at the interest and volume in SPY puts from $100-115 and I see huge interest and volume on them. Either someone knows something or someone is going to take a huge loss on them puts. Options expire this week and one way or another something could be cooking. SPY is currently at $120 for SPY to go to $110 or so we would be seeing quite a bit of losses.

http://www.google.com/finance/option_chain?q=NYSE:SPY

Comment by obewon - 15 November 2010

Given the fact that the US stock market (& other markets!) is being propped up by the US FED during its “thrice-a-week” POMO actions, what I find very interesting at this juncture is the fact that the FED is planning on POMO actions for every trading day this week (i.e. from 15 Nov through 19 Nov).

The million dollar question now is whether the FED’s daily POMO actions will be sufficient to counteract the stiff head-winds that are against this market.

Comment by Max modesti - 15 November 2010

Bla..bla..bla.. It s a joke! NĂ´ shame!!!

Comment by obewon - 17 November 2010

FED’s POMO Has Little Effect:
With the US FED’s open announcement last week that they would be conducting “POMO Operations” (i.e. market manipulations!) for every trading day of this week (15 Nov – 19 Nov), I really thought that US stock market would have been doing better than it has, thus far.

Here we are at mid-week (17 Nov); yesterday, the market performed horribly. Today, it’s “above water”, but barely; this is very surprising, especially when we consider the fact that the FED has pumped over $8 billion in today’s POMO operations.

Ed Note: Perhaps the GM IPO is to blame – but I note the pension fund sold 35% of its holding in the IPO, so the insiders are already getting out! Usually dumping a massive number of shares on a fragile market has a bad result…

Comment by Andy - 18 November 2010

Obviously this dude was wrong again because the FED has more cash due to all these new stimulus packages that were passed to lift the market to get growth numbers to show for the US and there is now way the market would tank when the FED has 440 Million shares of GM on the first day of their IPO share listing which is today. Government has a stake in this lol..

Add your comment on this article:

Post your comment >

Free e-Newsletter: