Martin Armstrong Says Trouble Ahead

by JDH on August 28, 2010

If you give a man a fish, you feed him for a day. Teach a man to fish, and you feed him for a lifetime.Lao Tzu

Give a man a fire and he’s warm for the day. But set fire to him and he’s warm for the rest of his life.Terry Pratchett

I may not understand that second quote, but I’m assuming that once you set fire to someone, that’s the end of their life, so yes, that would imply that setting a fire to someone will keep them warm for the rest of their life. – JDH

Good news! I’m not going to teach you how to fish, because I don’t know how to, but I am going to keep you warm by lighting you on fire! I’m going to tell you what’s going to happen on the markets next week.

Month end is August 31, on Tuesday, so even though that’s not the end of the quarter, fund managers still like to have a nice clean month end, so the market will rally on Monday and Tuesday. Here’s the chart (click to enlarge) of what’s happened over the last four months:

As you can see, the market stalls at the 200 day moving average, then drops 800 or 1,000 points, then recovers to over the 200 day moving average for a few days, then it crashes again. Simple. So, all we need to do is extend the chart for a few weeks:

Easy, eh? We have a big rally on Monday and/or Tuesday, and then we are stable for a bit, and then the big crap-out happens, taking us back to the July lows, and perhaps lower.

See how easy it is to predict the market? Download a chart, feed it into your graphics editing program, and boom, one minute later you know what the market will do. It’s that easy.

(Yeah, right).

But don’t take my word for it. Our favorite incarcerated guru, Martin Armstrong, is saying the same thing. In an essay titled World Share Market Outlook and Grand Unified Theory published on August 10, he states, on page 7, that August is a turning point in time, with particular attention to be paid to the weeks of August 2 and August 30. As the previous charts showed, the week of August 2 marked the high point for the month; it will be interesting to see if the week of August 30 is the beginning of a significant correction. On page 8 he summarizes his outlook by saying:

Only a low the last week of August would warn we could flip to the upside. This is NOT going to be a walk in the park. The markets are going to be very volatile and we have to pay close attention to the outcome of the Sept/Oct time period. We are preparing to make a very important directional change.

My opinion, as stated in these electronic pages as recently as last week, where I discussed the Hindenburg Omen and the coming crash, remains the same: it ain’ t going to be pretty. Unemployment remains high, consumer spending has dropped off the table, retailers are offering massive discounts for the back to school crowd, new home sales have crashed, a significant number of U.S. mortgages are under water, and a large number of homes are in foreclosure.

Need I say more?

I don’t think so.

So I will say that we may have two decent up days, and then all bets are off.

Of course, I’m not usually correct, and no one can predict the future, so be careful not to follow this advice, since you may simply set yourself on fire.

Thanks, and see you next week.

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