As This Chart Clearly Shows..Stocks Will Crash
Harkening back to the Charles Nenner’s interview on Fox’s Bulls and Bears of early May 2011, his prediction of Dow 5,000 by the close of 2012 stood back then and stands today as a bold call.
But, here’s why stocks are very vulnerable to a Nenner crash scenario and why, even in the absence of a false move by the Fed, stock will most likely decline hard anyway.
A look at the Baltic Dry Index (BDI) suggests either the global economy is about to soar, or Nenner’s Dow 5,000 call could be on the money, or close to the money.
As of Sept. 12, the BDI stopped short of one point of its all-time low of 661, a level not seen since the SP 500 crash low of 666 points, during the height of the Lehman crisis of Mar. 9 2009 [see graph, below]. But as the SP closed on Sept. 12 at 1,463, a 130 points, or so, off its all-time high set during the second half of 2007, Bernanke manipulation of stock prices has set equity investors up for a fall—a very big fall.
Stock prices, which many regard as a leading economic indicator, need to explain, then, first: why have there been so many stock market crashes? Did, suddenly, everyone change their minds about the economy and its health to deliver corporate profits? And second: if the gold and silver markets, bond market, currencies markets and commodities markets are obviously ‘manhandled’ quite frequently by the Fed, why not stocks? Why are stocks sacred cows of the Fed’s deception racket?
Economic, export and labor data, which show the U.S., European and Chinese economies either collapsing, in the case of the U.S. and Europe, or rapidly slowing, in the case of China and its Eastern satellites, serve as an underscore to the BDI’s low levels.
i watch the BDI a lot..its more important than the S & P 500 or dow..