Question: Mr Farrell.... Do I mark my whole 2016 calendar for a crash or does the crash start on January 1st, 2016?
The allure of the dreaded crash headline. Today I am supposed to "mark my calendar" for yet another Stock Market Crash prediction. Today's crash prediction comes from columnist Paul, B. Farrell who says to prepare for a 50% drop in 2016.
Let the countdown begin. After all it is only one year away. Speaking of one year away, almost precisely one year ago today the same smiling columnist was telling us 2014 was the year we'd see a 1929 type crash.
We were supposed to get smashed by a Mack truck that we couldn't hear coming because it was probably using a Klingon cloaking device as all Market Crash Mack trucks do, especially the ones that suddenly shift into high gear:
But when the Mack truck suddenly shifts into high gear ... accelerating rapidly ... finally catching all of us by surprise... none of this will matter ... you’ll never hear it coming ... till too late ... few did in 1929, in spite of all the warnings ... you didn’t hear in 2000 ... nor in 2008 ... nobody will in 2014 ... the Mack truck will finally catch all by surprise, once again.
A good reason they didn't hear the Mack truck In 1929 is because they didn't exist.... but let's get even deeper into this... because I've already marked my calendar and I need to know.
If a silently speeding Mack truck were to approach us and run us all over, would a massive market crash matter anymore? And why are we secretly developing Mack trucks that travel silently? Does gravel and stone need to be delivered discreetly? I get it... it's brilliant... so we don't have to hear the garbage men at 5am. It's all making sense now.
I'm just thankful that the 2014 crash somehow passed us by. The 99% chance of that crash... we just got lucky I guess, or perhaps we are more nimble than we think? Who would have thought dodging a silent Mack truck with sudden acceleration capabilities would be so easy. Certainly the market Gods can throw something more insidious at us?
Am I to assume the 2016 market crash will not be of the "Silent Mack Truck" variety? I can't wait to find out. A demon possessed car named Yellen? An erratically piloted helicopter? A topless, horse-riding Zombie?
I've penned quite a few Stock Market Crash pieces over the years pointing out the fascination everyone has with a market that falls. It's the rubber necking, have to stare at the car wreck mentality, that seems to be programmed into humans. It's why any good news broadcast leads with the most negative, awful news story of the day. And if there isn't a good one that day, they use yesterdays car wreck, train explosion, terrorist beheading.
Let me be clear, I welcome the market crash articles and stories. This market has and will crash again. Without the bearish bias since 2009 I'm not sure this market would have rallied like it has.... alright who am I trying to fool, it didn't what was written from 2009 until today, the market was going higher. But you have to give the bears their due. They will be right at some point, and they make valid arguments. It remains nearly impossible to fight against every Central Bank in the world.
I love using GOOGLE as a tool to see how most of America thinks.
There are over TWICE as many searchable items on GOOGLE for negative market headlines than for positive ones. 58 million to 21 million. Declines, carnage, disaster sells. Slow, methodical, rising markets make for very boring headlines.
Ironically enough, in 2013 when I wrote about the fascination with stock market crashes and drew this breakout chart:
I also said the market might crash in 2016. Go figure.
Keep your eyes open for silently speeding Mack Trucks in 2016.
Yes its coming, the market has cycles. But you won't hear me say it every day until I am right. We collapsed in 2000, 2008, and maybe 2016 will be the year. This is what I see from a long term chart perspective. We have broken out after 13 years of consolidation. This is bullish and if we've learned anything over the last five years, its that the market can perform far beyond most people's expectations. While some think its smart to be preparing their Doomsday Shelter, those preparing for further gains from the equity markets, while in the minority, might be the smartest of all.