This has led to many economists to panic and warn that the whole thing is coming down now. Is it true?
For more on this, stock market anaylst and expert Gregory Mannarino explains his perspective, and how the markets will now collapse, for now.
In a recent newsletter sent out today, Mannarino stated this:
At the end of 2021, I outlined how this year, 2022, would prove to be a volatile one for both the stock market, and the cryptocurrency space. Despite this, I have also said that I expect the stock market to finish 2022 higher. Gauging from the recent volatility in the market, and the fact that the SP500 topped out in early January, market sentiment has indeed turned bearish. If one were to step back and look at the global fundamental picture, its astonishing that the market has not fallen much harder. Today the SP500 is in a “technical correction,” that is it has fallen more that 10% from its all time high, but not more than 20%. If the SP500 were to fall beyond 20%, as the NASDAQ has, it would then be in a “technical bear market.”
The recent price action of the equity/stock market overall has been in response to the Federal Reserve raising the Federal Funds Rate, (FFR). This in turn has caused the benchmark rate, that is the 10yr yield, to “adjust” higher. It is also my belief that the Fed. Will continue to raise the FFR moving forward however, I believe that the Fed. Will be less aggressive than they are leading people to believe.
Looking again at the bigger picture, this stock market has gone virtually straight up for YEARS! Isn’t it time for some kind of corrective phase?
The answer to that question is ABSOLUTELY! In fact, the market is WAY overdue for one.
With that said, the probability that this market will finish the year remains real. The main reason why this market may today be “on sale” is this- the debt market remains stable. The rise in the benchmark 10yr yield as of late has been controlled, there is no sign of instability. Understanding that the debt market IS THE MAIN DRIVER of the stock market, it should make it easy to understand why, despite the recent market price action, new record highs for the market are possible and not too far off. While it is also possible that dynamics driving the market may change, it is vitally important to keep your portfolio hedged, that is simultaneously owning both risk-on, and risk-off assets. Risk-on refers to stocks/equities. Risk-off refers to commodities generally. Having a balanced portfolio with exposure to both risk-on, and risk-off assets at the same time sets you up for potential profits either way.
Eventually this stock market is going to PLUMMET, of that there is no doubt, and it will not be a slow burn over the course of months, but days. “The Big One” will not begin in the stock market itself, but in its main driver, the debt market. By observing the price action of the 10year yield, we can see if the debt market is becoming unstable- we are watching for an uncontrolled sell-off in the debt market which will cause the 10year yield to spike very rapidly. This will in turn put enormous pressure on the stock market.
With an uncontrolled sell-off in the debt market, with rates spiking rapidly, there is a potential for the SP500 to fall 80%. The truth is, no one knows where the bottom really is, but we know where to look for signs that The Big One is in fact starting.
In short, Mannarino also noted in his daily vlog update:
I don’t know another way to put this to you, but, we’re not in a [a] collapse right now – the market is not a collapse: the economy is in an absolute meltdown, absolute meltdown, with no end in sight.
And yet, with all the hoopla generated by many economists that “the big one” is upon us; the SP 500 ended 2/10th of 1% lower overall, to end the week.
AUTHOR COMMENTARY
Simply put: the markets have no semblence of reality: they are fake and propped up, and will continue to be for some time longer. The REAL economy is already dead, but the masses have no idea just how irrepairable the damage is. Be patient: opportunity is coming.
The Quickest Way To Know The Economy Is Broken Beyond Repair
[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).
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Off topic question: I was just wondering why in Galatians 5:16 KJV it says “… Walk in the Spirit …” (walk is capitalized), whereas later in Galatians 5:25 KJV it says “… walk in the Spirit.”?(lowercase)
Nvm, I see it’s a letter – quotations not not needed.
It’s an affirmative and Paul is essentially starting up a new sentence. The KJV does this a lot, usually when quoting someone or something but without actually using quotation marks.
If the stockmarket totally collapses, will the world go in to a depression and render all money useless anyway? Like 1920.
Does it matters if we have money in stocks or in our wallets?
When the stockmarket implodes, it will turn into anarchy in the streets and something out of an apocalypse movie. SOOO many people will lose their artificial wealth, but will also be a great buying opportunity. If America’s markets and banks fold, Europe, Canada, and Australia will comedown soon thereafter.
I am very cautious of the stock market, though I have thought about investing and then pull profits, and then repeating that cycle; instead of letting it sit there forever. That being said, I would still go physical money in an instant, though the world currencies are in the gutter.