The New Cascading Crash between 2/20/09-4/30/09
It has been a while since I have blogged, so here we go….
There is a very big chance that the stock market will see a crash through the end of tax season, aka.. the end of April. There will be a rally until the end of August and then stocks will be sold off again. Christmas 2009 will be rough as well.
Top Ten Reasons why the crash is coming soon…
1) Property Taxes are due on or before April 10th, 2009. Those who cannot pay will bankrupt their individual States.
2) Taxes are due in the USA on April 14th, 2009 - How will people raise capital to pay Uncle Sam?
3) The earnings from the last 2 quarters have been horrific and we will see more companies reporting.
4) Many people sold their stock in 2008 with some owing quite a bit of money.
5) Triple witching is occurring on Feb 20, 2009 - Typically a very volatile day in any market.
6) Banks are essentially insolvent and have cut off the income stream for many people by shutting down credit cards and home equity loans.
7) There are many more fearful sellers out there than buyers of stock.
People will sell their stock to preserve what that have left in a shrinking economy with few job prospects.
9) People are fearful of the future and will not think about investing more into their 401K causing more stocks being bid down.
10) Food prices have NOT gone down at the market though oil prices have drastically reduced their transportation costs.
11) The Future:
a) Stocks will be cheap - Who needs a huge wage?
b) Wages will be reduced due to the recession and the emerging Echo Boomer generation.
c) Homes will be cheap - Who needs a huge wage?
d) 20% down will be the norm to purchase a home. - Will the baby boomers loan the echo boomers money for their first home ?
e) As the economy grows again investing in stocks will be the only way to generate the 20% required to purchase a home.
1) The flood of cash into stocks will entice people to come back to the market as huge gains will return for very cheap stocks.
a) 9 out of 10 largest point gains in history have occurred over the last year.
f) Buy Option Calls going long !!!!
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