What does last weeks waterfall decline mean?

Latest articles by Martin Armstrong writing about what waterfall decline patterns are indicating about the bigger picture... ie Decline of Western Civilization...

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Sorry about the title, I meant the May 6th waterfall decline which was a bit more than a week ago.

Sorry about the title, I meant the May 6th waterfall decline which was a bit more than a week ago.

Confusing article. End of the West combined with rising dollar, stocks and gold. Contradiction much? Much to much.

Latest articles by Martin Armstrong writing about what waterfall decline patterns are indicating...

Thanks Russ.

I've followed his work since the early 1980's and have always appreciated his analysis.

A brilliant man, who truly understands the various relationships of the global financial markets.

I enjoyed the article. Thank you for sharing.

Sorry about the title, I meant the May 6th waterfall decline which was a bit more than a week ago.

Confusing article. End of the West combined with rising dollar, stocks and gold. Contradiction much? Much to much.

His reasoning is that the dollar will be seen as a refuge of safety at first until the debt contagion spreads to the USA, once this happens all hell will break loose. The Dow will act as an inflation hedge and gold will be a desperate attempt to preserve capital. As Armstrong said a couple of decades ago..."we are going to live history"... which he thinks is going to be comparable to the collapse of the Roman Empire. He has also suggested that China could end up being the savior of Capitalism, so that is the wild card in all of this; how much will China be able to do to stop a total collapse of the West?

and this from markettalk.newswires-americas.com/?tag=sp-500 (warning this site seems to have a virus as my AVG blocked an infection attempt) So the Problem is There is No Problem Posted by Paul Vigna on May 15, 2010 Dow Jones Industrials, Markets, S&P 500 Boy, that happened fast. More and more it appears the flash crash wasn’t some aberration, some error, but just the normal workings of a highly automated, lightning-fast stock market. The problem for the regulators is, there is no problem. This is the way the market works now. It may be scary, but it isn’t broken. It’s just fast. Incredibly fast. From the Journal: As regulators struggle to forge a clear picture of the events that led to the stock market’s slide on May 6, another piece of the puzzle has come together. Waddell & Reed Financial Inc., an Overland Park, Kan., brokerage and mutual-fund firm, was identified as the mystery trader that sold a large amount of futures contracts during the decline. Commodity Futures Trading Commission Chairman Gary Gensler, without identifying the firm, has cited the trading as one of many factors that contributed to the Dow Jones Industrial Average’s nearly 1,000-point intraday decline. So Waddell apparently started the whole thing, selling a large block of e-mini futures contracts. Fine. But nowhere it is suggested that Waddell was doing anything nefarious, or even just simply mistaken and somehow threw a big spanner in the works. CFTC’s “Gensler described the trading as a ‘bona fide hedging transaction’ by ‘one large investor’ and not a trader trying to manipulate the market.” Are they kidding? If the financials markets can’t handle that, then we have a real problem on our hands. Because Waddell was just executing its strategy. The company responded, with this statement: ”Quotes attributed to executives at the CME and the CFTC note that Waddell & Reed has executed trades of this size previously, and indicate that we are a ‘bona fide hedger’ and not someone intending to disrupt the markets.” The upshot of all this, as far as I can tell, is that we can pretty safely conclude that the crash wasn’t the result of a mistake. Fine, Waddell sparked a cascade of sell orders with its e-mini strategy, which plunged the market more than 700 points in 20 minutes. It also, incidentally, came back 700 points just as fast. That doesn’t seem to be bothering people. That rally also shows the market was working, because buyers came back. The fact of the matter is the markets were extremely jumpy on the 6th, already in the middle of a sharp selloff before the flash crash began, ready to sell off even more at the first sign of trouble, and they did. That it all happened inside of an hour is just a result of the automation of the markets. If nobody anywhere is saying anybody did anything deliberately or accidentally wrong, then you have to conclude that the markets were working correctly. Faster than anybody’s ever seen before, faster than anybody expected possible, and that terrified some people (and it should.) But still, the market ran the way it’s been set up to run in an age of faster-than-lightning supercomputers. The powers that be are either going to have to get used to that or change the system.

Somewhat off topic - but I wonder who or what entity it was that began the global shift of production means within the US, to other countries. I don't think it was Ross Perot, however I do remember his "sucking sound" mantra during his presidential run. That was in reference to Mexico I believe. A viscous feeding begins. Company A moves their manf offshore, and can now undercut Company B by X percentage. In order to compete, Company B now has to either make a similar move, or potentially go out of business. And the snowball begins. Eventually leading to nearly all self-sustaining manufacturing-based job opportunities for the non-educated masses, to go poof. We are now a "service" economy. Yes indeed. And China - and not sure how it happened, it may be the population numbers that made them the big winner in this globalization - looks to be the big winner in all this. The Corporate ladder of America, turning one of the most Communistic countries in the world, into an economic behemoth. China says Mr. Corporate America, you brings those manufacturing jobs over here, and we will give you opportunity to operate within our market. You know we have folks in this country, that go by the billions. Did you say billions?? Yes I did. And we work on people to their ever-living bones. Literally. We don't care about the value of human life. You take care of us..we take care of you Mr. America. Deal. Interesting cascade of evolutionary events. Yes, the fat-cats will survive comfortably. The minions in this country I do believe will rise some day...but it will take an awful lot to make that happen.

Russ I understand his point, but the idea that people will put money into equities is strange. Gold + Dollar going up does not bode well for stocks and besides, I dont think anyone is kidding themselves. Our problem in America is not any different than that of Greece. Our debt to GDP percentage is pathetic, we just happen to be the reserve currency of the world for now but that can change quickly. His empire declne prediction, meh, whatever. If we follow the path of the Romans it would mean that we get invaded, subjugated and humanity plunges into darkness for hundreds of years as innovation regresses and declines. Throw in some nasty widespread airborne illness too. Fun stuff.

Russ I understand his point, but the idea that people will put money into equities is strange. Gold + Dollar going up does not bode well for stocks and besides, I dont think anyone is kidding themselves. Our problem in America is not any different than that of Greece. Our debt to GDP percentage is pathetic, we just happen to be the reserve currency of the world for now but that can change quickly.

His empire declne prediction, meh, whatever. If we follow the path of the Romans it would mean that we get invaded, subjugated and humanity plunges into darkness for hundreds of years as innovation regresses and declines. Throw in some nasty widespread airborne illness too. Fun stuff.

rkd80, As someone said... History rhymes. This time around things are not going to be a carbon copy of ancient Rome but there are many similarities, military all over the world (or known world back then) sucking at the system - see youtube video of Donald Rumsfeld announcing to the press just before 9/11 that there was 1 Trillion dollars missing from the US Military budget! , decadent behavior, corruption, removal of the precious metals from the currency - currency debasement etc. On the plus side there is much innovation and new technology but if and when the bond markets go down all that won't matter too much. Gerald Celente is predicting food riots are coming to America in a few short years.