Crash #1: The Dot Com bubble (2000 - 2003)
Crash #2: The Financial Crisis (2007 - 2008)
And now it's predicting the next possible crash. What I like to call “The Debt Crisis”.
In 2007 we had banks collapsing and now we have countries collapsing.
And so we're talking about a crash on a much larger scale! This crash won't only affect South Africa, but the entire world.
Let's go through the signs one by one, so I can show you how it could signal the next looming stock market crash and what it means for your wealth!
Stock market crash sign #1: Interest rates are set to rise very soon!
For the last five years, interest rates have been at ridiculously low levels the UK and the US.
But now with all of the debt problems in the world - Greece, Portugal, Italy and Spain, it looks like there needs to be intervention.
The US is expected to raise their interest rates from 0 up to 0.25pc around the middle of 2015. So that could happen any month now!
You’ve also seen the rand weaken to a ridiculous low of R12.39. And so the US Dollar has been strengthening against many of the emerging markets, as people are piling their money into US Dollars.
The weakening of the rand will continue for some time to come.
For the last five years, interest rates have been at ridiculously low levels the UK and the US.
But now with all of the debt problems in the world - Greece, Portugal, Italy and Spain, it looks like there needs to be intervention.
The US is expected to raise their interest rates from 0 up to 0.25pc around the middle of 2015. So that could happen any month now!
You’ve also seen the rand weaken to a ridiculous low of R12.39. And so the US Dollar has been strengthening against many of the emerging markets, as people are piling their money into US Dollars.
The weakening of the rand will continue for some time to come.
The Volatility Index or the VIX is what you can call an emotional barometer. It basically measures the investor’s sentiment about the current volatility in the market.
For now all you need to know is that when the Vix shows a measure of anything higher than 30, volatility is sky high.
And anything less than 20, shows you low volatility. Today the Vix is sitting at 14.21, which tells you that the Index isn’t too excited about the upside that’s come in the last couple of years.
So when the Vix index is way below 20, you can expect a reversal in the market. And so, downside is expected to come.
In the next few days, I’m going to specifically show you why this index is so important to look at. So keep reading Trading Tips in the next few days, it’s crucial to understand this index!
Stock market crash sign #3: The FTSE predicted two of the biggest crashes of the century and could predict the third one
Take a look here:
This is the Financial Times Stock Exchange Index chart or the FTSE (Footsie). Basically this index is made of 100 of the biggest companies on the London Stock Exchange.
And over 8 shares alone are duel listed on our JSE stock exchange.
So when the FTSE crashes, it’s safe to say that the JSE follows suit.
During the years of 1991 and 2003 we had the Dot Com Bubble. The FTSE crashed 52% from 6,930 (31 Jan 2000) down to 3,321 (31 march 2003).
From 2007 to 2009, the FTSE crashed an insane 47.9% from 6,730 (31 October 2007) down to 3,505 (31 march 2009).
And now just six years later, we have the FTSE lingering around the all-time highs just looking like it’s ready to collapse again.
And the funny thing is that the FTSE has really battled to break above its psychological level (7,000).
As long as the index level stays under 7,000, without a strong break to the upside, you can expect huge downside to come.
In 2007 – 2008 we had banks collapsing and in 2014 -2015, we now have countries collapsing.
Just ask yourself, will South Africa, Greece, Portugal, Italy and Spain, to name a few, ever pay off their debt?
My opinion? Not as long as the failed monetary system is around.
So, with all of the chaos brewing world-wide economically, politically, socially and financially, we could expect the FTSE index to fall back down to 4,000 in the next couple of months.
That could be another 41.9% collapse on the FTSE which the JSE will follow.
But don’t worry, I’ll keep you updated with what’s going on and how you can profit from it.
Keep reading your Trading Tips daily mails, because the next few days are going to be crucial for you and your money.
And always remember, "Wisdom yields Wealth".
Timon Rossolimos
Senior Editor: Trading Tips
Head Analyst: Red Hot Storm Trader
Author: 94 Top Trading Lessons of All Time
Take a look here:
This is the Financial Times Stock Exchange Index chart or the FTSE (Footsie). Basically this index is made of 100 of the biggest companies on the London Stock Exchange.
And over 8 shares alone are duel listed on our JSE stock exchange.
So when the FTSE crashes, it’s safe to say that the JSE follows suit.
During the years of 1991 and 2003 we had the Dot Com Bubble. The FTSE crashed 52% from 6,930 (31 Jan 2000) down to 3,321 (31 march 2003).
From 2007 to 2009, the FTSE crashed an insane 47.9% from 6,730 (31 October 2007) down to 3,505 (31 march 2009).
And now just six years later, we have the FTSE lingering around the all-time highs just looking like it’s ready to collapse again.
And the funny thing is that the FTSE has really battled to break above its psychological level (7,000).
As long as the index level stays under 7,000, without a strong break to the upside, you can expect huge downside to come.
In 2007 – 2008 we had banks collapsing and in 2014 -2015, we now have countries collapsing.
Just ask yourself, will South Africa, Greece, Portugal, Italy and Spain, to name a few, ever pay off their debt?
My opinion? Not as long as the failed monetary system is around.
So, with all of the chaos brewing world-wide economically, politically, socially and financially, we could expect the FTSE index to fall back down to 4,000 in the next couple of months.
That could be another 41.9% collapse on the FTSE which the JSE will follow.
But don’t worry, I’ll keep you updated with what’s going on and how you can profit from it.
Keep reading your Trading Tips daily mails, because the next few days are going to be crucial for you and your money.
And always remember, "Wisdom yields Wealth".
Timon Rossolimos
Senior Editor: Trading Tips
Head Analyst: Red Hot Storm Trader
Author: 94 Top Trading Lessons of All Time
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