If we look at the European indices then we could perhaps conclude that the crash has indeed started, I look at some FTSE share prices and notice there is hardly any buying will left when the share price drops. But, if we look at the DJIA we are not really that much lower from its all-time high, nor is the S&P or NASDAQ.
I have been saying since the beginning of the year that a transfer of stock market wealth is taking place from rest of the world to the US Equity markets and this trend or what I call the game plan can only become more energised and noticeable. I call it consolidation of wealth and power into the US markets.
My opinion is that Euro will be scrapped, accompanied by a banking crash and stock market crash … and increasingly I think Greece is the catalyst for this new game plan, I repeat what I have repeated here several times. All this was no accident, it was all in the game plan.
You can imagine, if we have a crash in the European, Japanese and Chinese markets then the only place to go would be the USA…and we could well be staring this game plan in the face, just by looking at the FTSE.
If Greece is not bailed out, then this will surely be the signal that Europe is going to go down … but will the US? My thoughts are to the contrary. Could we see a complete dislocation of the US markets from rest of the world for the first time? Yes, it is entirely possible.
Since there are too many factors to consider to be able to call the end of the bull market, then what are the clues? When will we be sure that we are going to crash? What is the indicator? The one thing that will confirm this? There are many ways of looking at this but for me if the DJIA drops below 17,000, it is an absolute confirmation that even the US is going to crash with the next level being DJIA 14,000.
Having said all the above, talking of the US equities alone, I am still of the opinion that it will make it to DJIA 20,000 before the US experiences a correction. A correction but not a crash.
I think DJIA will continue its bull run in the second half of this year, starting August-ish.
Could it be sell everywhere else and buy US equities? Yes, indeed, it could be.
All eyes on Greece for the European markets performance, this is indubitably the catalyst and the signal.
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