One Simple Reason The Markets May Crash

Discussion in 'Stock Market Forum' started by inthemoneystocks, Nov 3, 2014.

  1. inthemoneystocks

    inthemoneystocks Member

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    The markets have long had quantitative easing to back stop them. Mentally, the markets and investors always knew the Fed was printing money and putting major support under any sell off. This worked as a self fulfilling prophecy, helping every dip be bought. As of last week, quantitative easing has concluded. The major concern now is that the markets are insanely inflated and when the next dip comes, investors will remember that the Federal Reserve is no longer back stopping the markets. This may mean panic and major selling could continue, creating a crash like scenario. While every past dip was bought, investors always know the Federal Reserve had their back. Now the average investor understands the Fed is no longer there. A small pullback may trigger a much larger crash like market correction.




    Gareth Soloway
    InTheMoneyStocks
     
    Last edited by a moderator: Jul 8, 2016
  2. springbreeze

    springbreeze Well-Known Member

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    This has been a possibility for several years now. I think the government has been doing everything possible to prevent a full crash. There is still a possibility but I'm hoping... The world's economy is too intertwined now. A full crash would be horrendous for the entire world.
     
  3. Peninha

    Peninha Senior Investor

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    If a major bank crashes the whole world collapses. We were close to that and the risk continues to exist because the major banks move a vital part of the economy, so they have the power to stop it.
     
  4. dianethare

    dianethare Senior Investor

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    Is this prophecy true?...how soon till we witness this crash?...are we staring down the barrel of a worse time than the great depression and recession?
     
  5. jdroc

    jdroc Guest

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    Well I thought you were gonna bring up the student loan bubble. However, if the market does implode. I'll be ready to pounce. Best way to earn easy money.
     
  6. downloads

    downloads Well-Known Member

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    I think you're missing the point of the "one simple reason". It's Quantitative Easing. The Federal Reserve has had several rounds of QE since 2009, basically injecting money into the economy through bond sales. The Fed just announced that they are ending Quantitative Easing after all these years. So, to specifically cite the end of QE as a possibility for the past few years is not true. It just ended a week ago.
     
  7. TipdOff

    TipdOff Well-Known Member

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    There is ways to hedge against market corrections: buy put options or inverse ETFs like:

    Screen Shot 2014-11-06 at 1.04.07 PM.jpg

    SPXS at 52 week low right now.
     
  8. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I wouldn't panic.
     
  9. jdroc

    jdroc Guest

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    Be careful with those inverse ETF's. I've seen those and other "ultra short" Etf's fall just as hard during a crash.
     
  10. Peninha

    Peninha Senior Investor

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    LOL, I also feel that we have been closer to it than now.
     

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