Is It Time to Get into Crash Positions?

With stock markets diving around the globe, a pressing question arises: is it time to get into Crash Positions?

In case you forgot how to get into Crash Positions, here’s a reminder:

After a dizzying 500+ point drop in the Dow on Friday, should we brace for impact? There are plenty of fundamental and technical reasons to view the swoon this week as the initial downturn that presages a crash landing.

But if we look at the last equivalent spike down in October 2014, we’re not so sure. Both spikes (October 2014 and August 2015) smashed through the lower Bollinger band, but the volume in last week’s plummet was nothing special compared to the 2014 swoon.

Big moves have a bit more credence if they’re accompanied by massive volume.

This leaves the door open to a sharp rebound, i.e. what followed the spike down last October.

The Put-Call Ratio (CPC) has actually exceeded the spike of October 2014, suggesting fear and panic are at higher levels now than back then. Sharp peaks in the CPC typically signal market bottoms.

But even if the market rebounds sharply, that doesn’t necessarily signal the return of higher highs. Recent lows in the CPC signaling extremes of complacency did not result in new highs; the market has been range-bound for months. This suggests the Bull is tiring–even if price pops back up.

The SPX MACD has worked its way down to the neutral line, threatening to punch through to negative territory. Bad things tend to happen when MACD stumbles below the neutral line, and that suggests the next decline might be different from the spike-down-snapback pattern of last year.

Is it time to get into Crash Positions? It never hurts to be prepared, but if the market pulls another October 2014 snapback here, the market could enter a glide path rather than a tailspin.

Keep an eye on the fuel gauges. Maybe this flight won’t go into a tailspin; perhaps it simply runs out of fuel.

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  • Jim G

    The market is manipulated and under the control of the Fed. You are right to point out the similarities to last year, and the Federal Reserve bankers saved the day. Will they this time? It depends on their play. I expect the big reset is coming, perhaps 9/23 is the rumor. But why wait if you can liquidate and run and hide – leave the country – move to New Zealand, get in a reconditioned missile silo, etc. Crash on Monday confirms the reset is coming – if she goes up again, the Fed is still stalling.

    My MBA is based on three theories, all of which have proven useless today. Keynes stimulus (borrow and print as if you don’t have to pay it back), Monetarism (money velocity is constant), and the efficient market theory (as it turns out, everything is rigged). Did someone just note that economists killed economics? Can I get my money back from the university? It’s really all politics, what sells. .

  • jadan

    Now wouldn’t that be something if a university refunded your money because your degree didn’t work in the real world?

    Predictions based on graphs of the numbers of market behavior are just derivatives of the behavior of millions of lunatics with a gambling problem. What is important is real data, such as commodity prices. Oil is crashing. Nobody will strip the copper plumbing and wiring from your house anymore. These are the true oracle of the future. And they say down, down, down.

    Here’s how to fix it. Kidnap Michael Snyder and hold him incommunicado, Vladimir Putin sent him here in retaliation for the sanctions.

  • Aug 20, 2015 Blame Game Is On – Fed VP Says Q.E. Has Failed

    The vice president of the St. Louis Federal Reserve Bank has admitted that the Fed’s quantitative easing program has been a failure. Even the central bankers are recognizing that central banking and Keynesian economics do not work. Will they see the light and go Austrian?

  • Jim G

    Could you guys at Washington’s Blog investigate this Shemitah Biblical Calendar correlation between crashes and the end of the calendar year. I understand that 9/17/01 (-684 on DOW) and 9/29/08 (-777) happened at the end, and we just ended the last 7 year calendar. Some writers want to blame God, but I’m wondering about the bankers. I am surprised I hadn’t heard this before. Why didn’t you guys tell me?

    • Jim, I believe the staff here at Washingtonsblog is staying with facts, and research, and truths in economics rather than anything supernatural!

      • jadan

        Quite so, Molon Labe! We must maintain our standards. But here’s some facts about “Shemitah”. It is a 7 seven year agricultural cycle spoken of in the Torah. The latter day Michael Snyder school of economic prognostications has attempted to apply this cycle to stock market behavior. Oddly enough, it does seem to fit!

        • Anyone can seem to make anything fit with enough time looking and seeking information. This why I stay with my sources and share their expert thoughts rather than my own!

          • jadan

            But look at the 7 year cycle, whatever one calls it. 2015, market crash ( – 7 years ) 2008 crash ( – 7 ) 2001 market crash & terror attack ( -7 ) 1994, something significant? can’t remember ( -7 ) 1987 market crash ( -7 ) 1980 recession (-7 ) 1973, oil embargo, etc etc. Unless you are an empirical materialist, you must acknowledge the validity of cyclical behavior as more than coincidence. ESP is real, too!

          • Sorry, I do not go down those paths you are or even consider them as a Christian!

      • Jim G

        No, no no. I’m not looking for supernatural causes, but statistical correlations. I mean exact dates. Jonathan Cahn does the supernatural thing, but he is a “Messianic Jew” who was “at ground zero” on 911. We know what 911 was. I’m wondering about the the Banksters. Is this a set-up? We get put off by the supernatural spin, but wouldn’t be the first time people spoke in religious code. If God didn’t set these crashes to occur on these dates, who did? You think this is random? You think all the exploding warehouses are random occurrences also?

        • Statistical correlations is looking for make believe stuff! Here are some facts from my files!

          FDNY 9/11 Survivor Witness and Whistleblower: Speaks on WTC 7 May 25, 2014

          Rudy Dent – Vietnam War veteran, four year member of the NYPD and thirty-two year FDNY firefighter. As a firefighter on 9/11, he was at Ground Zero and was there when Building 7 came down. In this episode of 9/11 Free Fall, he relives his experience that day, recounting how he believes the buildings in New York were brought down in controlled demolitions.

          2.3 TRillion Dollars Missing from DOD Day before 9-11-2001

          • Jim G

            My point exactly. I think you are missing some of my references, but let us speak between the lines. Who set the date for 911?

          • Is that was is most important for you?

        • Here are more publicly known facts! General Wesley Clark: Wars Were Planned – Seven Countries In Five Years

          “This is a memo that describes how we’re going to take out seven countries in five years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran.” I said, “Is it classified?” He said, “Yes, sir.” I said, “Well, don’t show it to me.” And I saw him a year or so ago, and I said, “You remember that?” He said, “Sir, I didn’t show you that memo! I didn’t show it to you!”

          General Wesley Clark Asked About 7 Country War Plan

          • Jim G

            So they plan things. Just as corporations have strategic planning sessions for what they want to do, so do those who run the government and economy. I expect they even set dates …

          • You are asking the wrong person on that issue!

        • Maybe the military industrial ‘CIA’ complex like this one as well when G.H.W. Bush was President!

          40th anniversary of the fascist coup in Chile—Made in the USA

        • September 11, 2013 Twelve Years of War, Lies and Deception

          I suggest you order and read some books that can be found at this site we are on!

  • The QE Era by Barry Ritholtz – May 5th, 2015

    I wanted to share this wonderful collection of charts from Jim Bianco of Bianco research:

  • June 11, 2015 Iceland Recovering Fastest in Europe After Jailing Bankers Instead of Bailing them Out

    After Iceland suffered a heavy hit in the 2008-2009 financial crisis, which famously resulted in convictions and jail terms for a number of top banking executives, the IMF now says the country has managed to achieve economic recovery—“without compromising its welfare model,” which includes universal healthcare and education. In fact, Iceland is on track to become the first European country that suffered in the financial meltdown to“surpass its pre-crisis peak of economic output”—essentially proving to the U.S. that bailing out “too big to fail” banks wasn’t the way to go.

  • Aug 15, 2015 Doug Casey and Jeff Berwick Discuss Imminent Financial Collapse & A Brighter Future Beyond Collapse

    NY Times best selling author and world renowned investor Doug Casey, along with Jeff Berwick of Anarchast fame sit down with TV Anchor Vanessa Collette for an in-depth, unfiltered & unscripted conversation about a potential imminent financial collapse. Doug believes we are now exiting the eye of the hurricane and rapidly heading towards what he terms the Greater Depression, and Jeff Berwick believes a collapse is being planned for September, moving the world closer to a one world government.

  • walcon

    It has already crashed long ago. It has been held up with bandages, and now the bandages are giving way.