From the Desk of Craig Griffin, President and Founder of ITM Trading
In these Market Updates I have been warning for months that the stock market has become very dangerous. This last week has been the worst week for the averages in sometime, as evidenced by these facts:
The Dow closes at it’s lowest level since November 7, 2013.
Dow, S&P 500 have biggest monthly percentage losses since May 2012.
NASDAQ has the biggest monthly percentage drop since October 2012.
Major averages have seen their first January drop since 2010. Many on Wall Street feel that as goes January so goes the stock market for the year.
I just want to remind readers that over the last two years the S&P 500 went up over 45% while earnings for the S&P 500 went up just 5%! As I have reported previously, there has been a huge disconnect between what we are seeing today and the actual fundamentals of what would be considered a healthy stock market.
I have also written about the problems in Europe and our ever increasing national debt which is now hovering around $17 trillion. Also, in the last several days we have witnessed new rounds of currency devaluations in Turkey, South Africa, Russia, Argentina and India. Last year Japan devalued it’s currency and there are those who believe that the U.S. will devalue the dollar in the same manner. However, most believe that the Fed will print, print and print to fight these dastardly forces of deflation and of course that will place more pressure on the dollar which of course is good for gold!
Richard Russell of the Dow Theory Letter believes that the bear market for stocks has resumed and he is expecting the stock market to take big losses in the weeks and months in front of us! One thing I think is certain… we are headed of another crisis! Too much water has passed under the bridge and most of it will be good for gold!
So remember, “It would be foolish to acquire gold for the short term but it would also be unwise not to own some gold for the long term!”