• 309 days Will The ECB Continue To Hike Rates?
  • 309 days Forbes: Aramco Remains Largest Company In The Middle East
  • 311 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 711 days Could Crypto Overtake Traditional Investment?
  • 715 days Americans Still Quitting Jobs At Record Pace
  • 717 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 720 days Is The Dollar Too Strong?
  • 721 days Big Tech Disappoints Investors on Earnings Calls
  • 722 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 723 days China Is Quietly Trying To Distance Itself From Russia
  • 724 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 728 days Crypto Investors Won Big In 2021
  • 728 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 729 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 731 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 731 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 735 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 735 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 735 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 738 days Are NFTs About To Take Over Gaming?
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

  1. Home
  2. Markets
  3. Other

What Happens to Gold When a Stock Market Crash Occurs

As you probably know, I would not be surprised if the stock market crashes within the September / October 2015 time period. I believe the economic fundamentals are poor and getting worse, fast. In order to prepare, this weekend I examined how U.S. Bonds and Gold did during the past several stock market crashes.

I went back and took a look at how Gold fared the precise time that the stock market crashed in September 2001, September/October 2008, and again in July/August 2011. What we found was that Gold not only rallied, but it rose significantly and contemporaneously as the stock market crashed.

December 2001 Weekly Gold Chart

Gold spike almost 10 percent during the week after 9/11/2001, while stocks plunged.

2008 Daily Gold Chart

2008 Daily Dow Chart

Gold catapulted almost 25 percent during the stock market crash of September/October 2008.

2011 Daily Gold Chart

2011 Daily Dow Chart

Gold even air-lifted 25 percent during the July / August 2011 stock market crash.

What this tells us is there appears to be an inverse relationship between Gold and the stock market during stock market crashes. This could be very useful information this year in 2015, when we could see the next great stock market crash, possibly again in the September / October time period.

In examining how U.S. Bonds behaved during U.S. stock market crashes, we observed the following:

US 30-Year Treasury Bonds Weekly Chart

U.S. Bonds rose substantially and quickly during stock market crashes of the past. They likely will again when the next stock market crash occurs.

Why do we see a stock market crash coming later in 2015? Well, there are several reasons, not the least of which I pointed out in my book, the Coming Economic Ice Age (available at www.amazon.com), is a massive multi-decade Megaphone Broadening Top pattern that is essentially complete, or will be very soon. The history for this pattern is that in almost every instance that it has showed up over the past century, a major economic decline has followed, including major stock market declines and crashes. The only difference this time is this pattern is exponentially larger than any we have seen in the past century.

Dow Jones Daily Chart

But over a shorter time horizon, we also see that the stock market is concluding a Rising Bearish Wedge pattern from October 2014, which we believe is the final pattern to complete the above multi-decade Jaws of Death Megaphone pattern. This Rising Bearish Wedge looks like it should finish sometime over the next month.

Once this top is in, a very strong and protracted decline will begin, including what we believe will be a stock market crash in 2015, and possibly more crashes over the next several years, a decline that wipes out $ trillions from the U.S. economy, and spreads across the globe, the beginning of the Economic Ice Age. We are already seeing signs of a woeful downturn in the U.S. economy. First quarter GDP was close to recession levels; housing is 35 percent below a year ago; and employment gains are non-existent, as Friday, May 8th's reported non-farm payrolls of 223,000 was a complete fictitious fabrication, as 213,000 (95 percent) of those reported 223,000 jobs were not counted, but were a guess from the Bureau of Labor statistics (per their own CES Birth-Death report), a 'lets pretend" number they think may have come from new jobs from new businesses they hope were created in April 2015. In short, the U.S. economy is headed into the tank, and fast.

 


When did Noah build the ark? Before it rained. We believe it is now time to make sure our arks are built and can float. We can help you at www.technicalindicatorindex.com with our daily and weekend market updates, or conservative portfolio model, and Platinum educational Trading program.

If you want to track the technical picture for our economy, the stock market and Gold, we can offer you a free 30 day trial subscription to our market forecasting service at www.technicalindicatorindex.com Simply click on the Free Trial button at the upper right of our website home page. We cover stock markets, economic events, and Gold daily and have Buy / Sell signals we track for stocks, Gold and precious metals. We also offer a Platinum Trading service. Email us at mainrdmch@aol.com for information on that program.

Do not be satisfied hearing what the market did; learn how to predict what the market is going to do. Join us at www.technicalindicatorindex.com as we study the language of the markets. Markets tell where they are headed. Technical Analysis is the science where we learn and apply the language of the markets. We are currently offering a FREE 30 Day Trial Subscription. Simply go to www.technicalindicatorindex.com and click on the Free Trial button at the upper right of the home page. If you would like to follow us as we analyze precious metals, mining stocks, and major stock market indices around the globe, We prepare daily and expanded weekend reports, and also offer mid-day market updates 2 to 3 times a week for our subscribers. We cover a host of indicators and patterns, and present charts for most major markets in our International and U.S. Market reports.

Dr. McHugh's book, "The Coming Economic Ice Age, Five Steps to Survive and Prosper," is available at amazon.com at http://tinyurl.com/lypv47v

"Jesus said to them, "I am the bread of life; he who comes to Me
shall not hunger, and he who believes in Me shall never thirst.
For I have come down from heaven,
For this is the will of My Father, that everyone who beholds
the Son and believes in Him, may have eternal life;
and I Myself will raise him up on the last day."

John 6: 35, 38, 40

 

Back to homepage

Leave a comment

Leave a comment