econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 24 August 2015

Stock Market Bubble Bursts‏

by Erik McCurdy, Prometheus Market Insight

Since early June, we have been monitoring developing weakness in the historic stock market bubble that suggested the bull market from 2009 was becoming susceptible to a long-term reversal. In early August, the Dow Jones Industrial Average (DJIA) experienced a confirmed long-term breakdown when it moved below support at its 200-day moving average. Last week, the S&P 500 index followed suit and experienced a confirmed long-term breakdown as well.

prometheus.logo2

Since moving below its 200-day moving average on August 20, the S&P 500 index has declined 9%. Although the violent nature of the move during the past 3 sessions has left many commentators in the financial media perplexed, this type of behavior is fairly typical from a historical perspective when a highly speculative bubble experiences a confirmed breakdown.

prom.no.1.2015.aug.24.600px

Moving out to the intermediate-term view on the weekly chart, the S&P 500 index has now retraced all of the gains since October. There is no meaningful long-term support below current levels until the 200-week moving average at 1,708, so it is highly likely that the developing correction will test that support level.

prom.no.2.2015.aug.24.600px

We note often that a long-term top is a process, not an event. Now that the massive distribution pattern on the S&P 500 index has experienced a confirmed long-term breakdown, it is highly likely that the cyclical bull market from 2009 has terminated. Given that the current bubble in stocks is one of the largest and most speculative of the past 100 years, the developing cyclical bear will be extremely violent by historical standards and the S&P 500 index will likely decline from 40% to 60% by the time the next cyclical bottom forms. Additionally, price behavior will be characterized by wild, extreme moves in both directions much more than it has been during the past several years as the new cyclical bear purges the speculative excesses from the market.


Prometheus Market Insight note: We will identify the key developments as they occur in our daily market forecasts and signal notifications available to paid subscribers. To receive our market forecasts and signals, login and then upgrade to a paid subscription.


>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.




Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Slow Economic Growth Will Be Around For A Long Time
The Job Guarantee, Wage-Price Inflation And Alternative Solutions: Part 2
News Blog
Has The IPad Become A Sideshow Act?
Terrorism In Westminster: London Had Expected Attack For Some Time And Police Reaction Was Rapid
Are Smartphones Killing Digital Cameras
What We Read Today 28 March 2017
NASA Precise Landing Technologies Tested On Vertical Testbed Rocket
March 2017 Conference Board Consumer Confidence Highest Since 2000
Richmond Fed Manufacturing Survey Again Improves In March 2017.
Case-Shiller 20 City Home Price Index January 2017 Shows 5.7 % Year-over-Year Growth
A Changing Rulebook To Tame The New Global Arms Race
Infographic Of The Day: Chart: Understanding Alphabet's 4 Billion Dollar In "Other Bets"
Early Headlines: Asia Stocks And Dollar Up, Oil, Gold Steady, Obama Climate Policies Gone, US Oil Glut, Euro Surges, Shorts Remain, Trump Into Yemen?, Iran-Russia Deals, Cat 4 Cyclone Hits Oz, And More
March 27, 2017 Weather and Climate Report - Will the MJO Deliver a Nino?
The Most Reputable Companies Worldwide
Investing Blog
Investing.com Technical Summary 28 March 2017
The Dollar's Coming Impact On Markets
Opinion Blog
Macron May Lead But Le Pen Remains The Big Story
Is The 20th Century Still The 'Hayek Century'?
Precious Metals Blog
These Gold Stocks Will Produce Much Bigger Gains Than Gold Itself
Live Markets
28Mar2017 Market Close: US Stocks Posted Gains, DOW Closed Up 150 Points, Crude And US Dollar Steady
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government































 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved