WARNING: We Are Heading For A Market Shock In Septmber or October
August 27th, 2012
Market crash ‘could hit within weeks’, warn bankers
The cost of insuring RBS bonds is now higher than before the taxpayer was forced to step in and rescue the bank in October 2008, and shows the recent dramatic downturn in sentiment among credit investors towards banks.
“The problem is a shortage of liquidity – that is what is causing the problems with the banks. It feels exactly as it felt in 2008,” said one senior London-based bank executive.
“I think we are heading for a market shock in September or October that will match anything we have ever seen before,” said a senior credit banker at a major European bank.
Three unusual reasons September could be a “treacherous” month for stocks
As the market sets sail into what historically has been the most treacherous month of the year (September) – a number of my analog and comparative charts continue to flash warning signals as they extend themselves up to resistance (UST:SPX ratio), into historical extremes (Apple), and into possible momentum downturns (2007/2012 SPX Analog).
Apple continues to defy gravity with its parabolic run over the past year. If past is prologue, this parabolic performance chase of the largest market-cap company in the world will mark a major equity market top when the tide turns. It is not a question of if – but when – and the pronounced head and shoulders formation on the…