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By my count, this is at least our SIXTH clear, unambiguous warning of danger in the Dow — sent to you in just the last 60 days!
On March 27, Mike Burnick warned you — right here in Money and Markets — that the big stock market rally of 2009-2010 “could come to a crashing end at any time.”
Also here in Money and Markets, Claus Vogt told you The Stock Market Is Starting to Look Toppy on April 21 … issued A Clear Warning Sign — Global Liquidity Is Drying Up one week later … and then, just in case you missed the first two, told you AGAIN that A Topping Formation Is Taking Shape on May 12.
On the same day, Larry Edelson, Mike Larson, and I held an emergency briefing online, with our FIFTH warning: “A good rule of thumb,” Mike said, “is to sell half of your excess holdings now and then revisit the balance when you get a good rally.” But … “even when you get the rally, it is very easy to forget the crisis. Things may appear to have quieted down, but it’s really going to be just the next calm before an even bigger storm that is coming.” (See transcript in Sovereign Debt Crisis: Emergency Strategy Update.)
Now, here’s our 6th warning …
The Dow’s 1000-point “flash crash” of two weeks ago was NOT a fluke! Nor is today’s 376-point slide in the Dow!
These events are lightning bolts that strike deep into the market’s core … and that help light up the path ahead for anyone willing to look.
In his flash alert to Safe Money readers earlier today, Mike Larson explains it this way:
“Some of the latest economic data has shown a cooling in global demand and a loss of investor confidence. Many early warning signs of credit stress are also flashing yellow. Volatility indices are on the rise … financial institutions are charging each other more to borrow money in the interbank market … and interest rate swap spreads are blowing out in the derivatives arena.
“These are the same kinds of indicators we saw go nuts before the 2008 crash. We’re still nowhere near the widespread panic levels we reached back then, but the trend is what matters and it’s very unsettling.”
These signals all confirm what we’ve been telling you for the last 60 days:
1. The great rally since March of 2009 is — or will soon be — over.
2. Despite its impressive duration and magnitude, that rally was little more than a temporary interlude — an intermission between two phases of a greater bear market.
3. The first phase came in the wake of the great Housing and Debt Crisis of 2008-2009, wiping out as much as HALF of America’s stock values.
4. The second phase has struck with the Great Sovereign Debt Crisis of 2010, and it’s just now getting under way.
Bottom line: If you have followed our recommendations to …
- stay away from vulnerable U.S. stocks …
- hold plenty of cash …
- use intermediate rallies to reduce your exposure even further and …
- hedge your remaining portfolio with inverse ETFs …
Then, you’re in good shape!
If not, what are you waiting for? How many more warnings must we issue? Please don’t delay. Move swiftly to get your money to safety.
Good luck and God bless!
Martin
About Money and Markets
For more information and archived issues, visit http://legacy.weissinc.com
Money and Markets (MaM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Nilus Mattive, Claus Vogt, Ron Rowland, Michael Larson and Bryan Rich. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MaM, nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MaM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical in as much as we do not track the actual prices investors pay or receive. Regular contributors and staff include Andrea Baumwald, John Burke, Marci Campbell, Selene Ceballo, Amber Dakar, Dinesh Kalera, Maryellen Murphy, Jennifer Newman-Amos, Adam Shafer, Julie Trudeau, Jill Umiker, Leslie Underwood and Michelle Zausnig.
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