Crash Potential over the Next 3-4 Weeks & Possible Final Low in Gold
By: Gary Savage
GoldSeek.com
Wednesday, 12 August 2015
I’ve said all along that if the Fed didn’t get out of the way and let the market correct naturally it would have serious consequences. Well they have not let the market correct naturally. On the contrary ever since QE3 ended there have been more interventions than ever before, and more aggressive. This has kept the market propped up but it’s also built up extreme complacency. We now have a bubble in central bank confidence. When this bubble pops it’s going to unleash a tsunami of selling as everyone runs to the exits all at once.
From time to time I’ve published charts and articles warning that we are moving into the timing band for a major multi-year cycle low in the stock market. Something of the same magnitude as 2009, 2002 and 1998. Those were all multi-year cycle lows. We are due for another one of those at any time. And considering the multi-year cycle has played out as an extreme right translated cycle, those typically correct as some kind of crash scenario. Examples of extreme right translated multi-year cycles are 1987, 98 and 2009. Now because of Fed intervention we are currently in the most extreme right translated cycle in history. At this point the Fed has virtually guaranteed this 7 year cycle will end in a crash event.
Based on the previous daily cycle low having occurred 26 days ago, the next cycle low will come due sometime between the first week of September and the FOMC meeting on September 17th. So as unlikely as it seems right now there is a scenario that could generate that move down into the 7 YCL over the next 3-4 weeks.
I’m of the opinion that tomorrow is likely to be a key day. We’ve already seen two interventions fail in the last week. If the market breaks hard to the downside tomorrow then I doubt there will be anything the Fed can do to stop the train at that point. If the market drops hard tomorrow or Thursday, then traders will start to lose confidence in the Fed and the run to the exits will begin.
The Rest…HERE
