THE 7 SIGNS THAT INDICATE THE PROXIMITY OF A FINANCIAL CRASH

Are we seeing the last breath of growth in the US market? Is it a behavior similar to what occurs just before an economic crisis?

During 2014 and early 2015, the US stock market has been something of a phenomenon. Even as the North American economy is in deep danger, we have seen Dow Jones, S&P 500 and Nasdaq breaking records and more records. However, no growth lasts forever – especially one that totally escapes economic reality.

This false moment of financial growth has been wonderful, and how I wish it would last longer. But there comes a time when we need to face reality, and the facts show us that the party is about to end. Below I have summarized the 7 signs that indicate when we reach the peak of growth:

# 1 Before a crash, price indices tend to emerge, exactly what we are seeing.

# 2 The bull market tends to last for about 3.8 years. We are now 6 years old.

# 3 The average gain during a bull market is 101.5%. We currently have 213%.

# 4 Generally, before a stock market crash, we see a divergence between the relative strength index and the stock market itself. This happened before the dot-com bubble burst, it happened before the crisis in 2008, and it’s happening again now …

# 5 In the past, debt margin spikes have been very closely associated with stock market spikes. The graphs show the same feature now.

# 6 We usually witness a 10-year spike in the National Treasury at the same time that the stock market also peaks.

# 7 Many momentum indicators are showing that we are close to a turn in the stock market.

So, if we are about to see a new ‘stock market crash’, when will it happen?

Well, the truth is, nobody knows for sure. It can happen in  a few months or a few years  from now.