A Death Cross, Wild Market Swings And A Currency War – And We Haven’t Even Gotten To September Yet

Michael Snyder

Things continue to line up in textbook fashion for a major financial crisis by the end of 2015.  This week, Wall Street has been buzzing about the first “death cross” that we have seen for the Dow since 2011.  When the 50-day moving average moves below the 200-day moving average, that is a very important psychological moment for the market.  And just like during the run up to the stock market crash of 2008, we are starting to witness lots of wild swings up and down.  The Dow was up more than 200 points on Monday, the Dow was down more than 200 points on Tuesday, and it took a nearly 700 point roundtrip on Wednesday.  This is exactly the type of behavior that we would expect to see during the weeks or months leading up to a crash.  As any good sailor will tell you, when the waters start getting very choppy that is not a good sign.  Of course what China is doing is certainly not helping matters.  On Wednesday, the Chinese devalued the yuan for a second day in a row, and many believe that a new “currency war” has now begun.

So what does all of this mean?

Does this mean that the time of financial “shaking” has now arrived?

Let’s start with what is happening to the Dow.  When the 50-day moving average crosses over the 200-day moving average, it is a very powerful signal.  For example, as Business Insider has pointed out, if you would have got into stocks when the 50-day moving average moved above the 200-day moving average in December 2011, you would have experienced a gain of 43 percent by now…

The Dow Jones Industrial Average has been on an unrelenting upward trajectory since its October 2011 low.

The signal that convinced many traders that the market was now moving with a bullish bias was when the 50-day moving average of the index price rose above the 200-day moving average a couple of months later at the end of December.

Since then the market rallied 6,200 points to a high of 18,333 before pulling back to last night’s close of 17,404. That’s a gain of around 43% even though the market is 5% off its high.

But now a cross is happening in the other direction.  That is why it is called a “death cross”.  It is quite understandable why a lot of investors are freaking out about the fact that the 50-day moving average has moved below the 200-day moving average for the first time in four years.  Every major stock market in history has been preceded by a death cross.

Of course no indicator is perfect.  Sometimes these death crosses come just before market crashes, and other times nothing much seems to happen.  The following comes from MarketWatch…

The 50-day moving average (or “MA”) crossed below a rising 200-day MA on July 7, 2010, when the Dow closed at 10,018.28. The Dow’s closing low for 2010 was actually hit two sessions earlier, at 9,686.48.

But the Dow fell another 5.9% over six weeks after the Aug. 24, 2011 death cross, and tumbled as much as 50% over 14 months after the one appearing on Jan. 3, 2008.

And keep in mind that when the January 2008 death cross appeared, the Dow had lost just 7.8% from its Oct. 9, 2007 peak. That means the bull market was still firmly in place, as the rule of thumb is a bear market is defined by a decline of at least 20% from a significant peak. In addition, the 200-day moving average didn’t turn lower until two weeks after the death cross appeared.

But this is not the only indicator pointing to trouble ahead.  Even while we have many stocks hitting 52-week highs, we also have an extraordinary number hitting 52-week lows.  This is called a “split market”, and this is a very ominous sign.  In fact, according to Peter Boockvar 62 percent of all stocks on the New York Stock Exchange are already trading below their 200-day moving average…

Peter Boockvar, market strategist at Lindsey Group, said he believes the market is in a correction that began a few weeks ago, starting with commodities names getting hit. The small-cap Russell 2000 was also a leader of the declines. “The key is it’s infecting other areas of the market. You have every headwind and every reason to continue this correction,” he said.

“Going into today, 62 percent of the NYSE stocks were trading below the 200-day moving average,” said Boockvar. “More and more companies are dropping out of the bull market.”

At this point, we have already had more than 50 “split days” this year.  King World News has just released an article which has pointed out this has only happened four times before, and a major stock market crash has followed each occurrence…

The only other times in history we’ve seen more than 50 split days during the past year were March 1968, August 1972, October 2000 and July 2006.

After all four of those, stocks lost more than a third of their value at some point during the next two years.

Are you starting to see?

A stock market crash is coming.

Another thing that has investors concerned is the fact that we have seen a large divergence between high yield credit and stocks.  As Bloomberg has pointed out, when this happens a significant stock market decline follows more than 70 percent of the time…

While not without precedent, instances when anxiety in bonds didn’t seep into equities are rare. More than 70 percent of the time since 1996, as spreads widened as much as they have since April, the S&P 500 has fallen, with the average decline exceeding 10 percent, data compiled by Bloomberg show.

“This is something that sooner or later is going to impact the stock market,” said Russ Koesterich, global chief investment strategist at New York-based BlackRock Inc., which oversees $4.7 trillion. “Credit market conditions have not been benign and easy as where they were last summer.”

On top of everything else, it looks like a global currency war could be erupting.

According to USA Today, this desperate move by China to devalue the yuan may indicate that the Chinese economy is in far worse shape than most had thought…

One, China’s move suggests that its economy is in worst shape than believed. “It highlights the fragility of the global economy,” says Donald Luskin, chief investment officer at TrendMacro. Second, a weaker yuan means a stronger dollar, and a stronger dollar means U.S. products sold in China are more expensive, which means fewer sales of Apple iPhones, hotel rooms offered by Wynn Resorts and computer chips made by Micron Technology.

Lastly, there is a fear that other nations will respond to China by devaluing their own currencies to stay competitive.

“When people start talking about ‘currency wars,’ it’s never a good thing,” says Michael Farr, president of money-management firm Farr, Miller & Washington. “China’s move to devalue its currency could be the first shot across the bow towards a wider currency war.”

As I discussed yesterday, it seems like the phrase “currency war” has been thrown around a lot lately.

But what would that look like, and what would that mean for the global economy?

Well, former IMF economist Stephen Jen is suggesting that we could soon see major currencies all over the planet being devalued by up to 50 percent…

[The] devaluation of the yuan risks a new round of competitive easing that may send currencies from Brazil’s real to Indonesia’s rupiah tumbling by an average 30 percent to 50 percent in the next nine months, according to investor and former International Monetary Fund economist Stephen Jen.

Volatility measures were already signaling rising distress in emerging markets even before China’s shock move. An index of anticipated price swings climbed above a rich-world gauge at the end of July, reversing the trend seen for most of the past six months.

The surging U.S. dollar combined with crashing prices for commodity exports has already created a state of crisis in South America.  If emerging markets such as Brazil are forced to devalue their currencies to stay competitive with nations such as China, that is going to just exacerbate the problems.

For a long time, things in the financial world were pretty quiet.

But now events are beginning to accelerate.

A lot of people are extremely concerned about what is going to happen in September, and I think that there are very good reasons to be concerned.

Throughout our history, the majority of our stock market crashes have happened in the fall.  Just remember what happened in 1929, 1987 and 2008.

Now we are approaching that time of the year once again, and things are lining up perfectly for a major financial crisis.

Credit to Right Side News

At Russia’s Doorstep: Full-Scale War Looms in Donbass, Escalated Combat with the Support of US and British Special Forces

US and British special forces are actively preparing Kiev’s military for escalated combat. UK Defense Secretary Michael Fallon said Britain will double the number of Ukrainian troops it’s training by yearend. He called conflict in Donbass “red hot” – heading toward getting hotter.

Lugansk People’s Republic (LPR) Contact Group envoy Vladislav Deinego said Kiev violated every Minsk ceasefire term since agreeing to observe them in February.

Conflict never stopped. Dozens of shellings occur daily – including against residential and public areas. Obama wants war, not peace – using Kiev proxies to do his dirty work.

Deinego denounced junta authorities “reluctance to bring closer the peaceful settlement of the” conflict. It authorized $250 million in extra spending for greater military buildup in Donbass despite its economy teetering toward collapse – funds desperately needed for constructive purposes earmarked for escalated war.

On August 10, Donetsk People’s Republic (DPR) military spokesman Eduard Basurin said

“(a)fter two hours of massive artillery preparation from large-caliber guns, Grad multiple rocket launchers, tanks and mortars near the Petrovskoye, Novaya Laspa and the Belaya Kamenka populated localities, the enemy used six armoured vehicles and six tanks to launch an offensive in the direction of Starognatovka and Belaya Kamenka.”

It was repelled, but shelling continued.

“(T)he Ukrainian military committed (more) gross violation(s) of the Minsk agreements. They knew that we had lived up to our commitment to withdraw all heavy weapons, including with a caliber under 100mm (from the disengagement line), and decided to take advantage of the situation to move deep into the DPR’s territory.”

“We are calling on the OSCE SMM and the Joint Control and Coordination Centre to carry out immediate and detailed investigation into the attack. We also want the world community to be informed about” continuing Kiev aggression.


On August 12, Russian REN TV personnel came under fire near Donetsk airport. A statement said “(t)he Ukrainian military opened fire at the REN TV crew today when our correspondents were working near the Donetsk airport, which is one of the (area’s) biggest flash points.”

“Shooting has been under way in the village of Oktyabrsky, one kilometer away from Donetsk airport, for days.” Numbers killed and wounded aren’t known.

DPR’s Contact Group envoy Denis Pushilin said daily Kiev shelling risks “full-scale military action…at any moment.”

“These concerns are strengthened by military equipment drawn to the contact line by Ukrainian forces, as well as by shellings of residential areas.” Kiev ignores Minsk terms. Its actions show it wants continued war heading toward full-blown like earlier.

The reliable Colonel Cassad site lists the following major threats risking escalation:

DPR and LPR forces “were put on high alert” after Kiev forces shelled Gorlovka on August 9.

Since August 11, they’ve been using Multiple Launch Rocket Systems (MLRS) – earlier just sporadically. On Tuesday night, militias responded to junta shelling.

After Donbass forces unilaterally withdrew heavy weapons near front line positions, they had to redeploy them to counter junta artillery, tanks and equipment in restricted areas attacking its cities, towns and other areas.


(J)unta (forces) officially renounced any restrictions on the withdrawal of artillery” and other heavy weapons – continuing to breach Minsk terms flagrantly.

DPR and LPR forces “are now actively strengthening their positions at the front in anticipation of (a Ukrainian) offensive.

On Wednesday, Donetsk workers “were released…early because they fear massive shelling.” DPR “is preparing bomb shelters, and notably, talking about the possibility of air strikes.”

Donbass officials say escalated fighting “can erupt at any time.” Minsk is dead.

If diplomacy can’t find a way to stop things, full-scale fighting can resume any time.

“(A)ctivity (indicates) the possibility of a return to massive bloodletting in the coming days, rather than continuation of the (April – July) trench warfare…”

With Washington and Britain readying its troops for combat, Kiev could resume full-scale aggression any time. It remains to be seen if implementation follows and when. Mass slaughter and destruction may be greater than earlier.



Credit to Global Reserch

Malaysia Meltdown: Asian Currency Crisis 2.0, Ringgit Crashing

When China went the “nuclear” (to quote SocGen) devaluation route earlier this week in a last ditch effort to rescue its export-driven economy from the perils of an increasingly painful dollar peg, everyone knew things were about to get a whole lot worse for an EM currency basket that was already reeling from plunging commodity prices, slumping Chinese demand, and the threat of an imminent Fed hike.

Sure enough, EM currencies from Brazil to South Korea plunged, and monetary authorities - unsure whether to play down the move or cry foul - scrambled to respond.

With some Asian currencies already falling to levels last seen 17 years ago, some analysts fear that an Asian Currency Crisis 2.0 may be just around the corner.

That rather dire prediction may have been validated on Friday when Malaysia’s ringgit registered its largest one-day loss in almost two decades.

As FT notes, “sentiment towards Malaysia has been damped by a range of factors including sharp falls in global energy prices since the end of June. Malaysia is a major exporter of both oil and natural gas, with crude accounting for almost a third of government revenue.” The central bank meanwhile, "has opted to step back from intervening in the market in response to the falling renminbi, unleashing pent-up downward pressure on the ringgit.” That, apparently, marks a notable change in policy. “The most immediate challenge is the limited scope of Malaysia’s central bank to step in,” WSJ says, adding that “for weeks, it tried to stem the currency’s slide, digging into its foreign-exchange reserves to prop up the ringgit and warning banks from aggressively trading against its currency."




Credit to Zero Hedge

Can’t Listen to This Anymore: EU Residents Tired of Western Media Lies

Despite the attempts by Western media to persuade everyone to hate Russia and its policies, more and more people from the Czech Republic, Slovakia, Sweden and even the United States are starting to empathize with Donbass residents, Czech newspaper Nova Republika reported.

The main reason behind the dramatic change of mind is fatigue from imposed media clichés, which tell people how to think, whom to hate and what to love, the newspaper said.

"An adequate response to the question of why EU citizens sympathize with [Donbass] militia is that it's a normal reaction of people — an allergy to a truly authoritarian order that under the disguise of a "democratic" choice hides the recipes of clichés: who ought to be loved based on the current conjuncture of events and whom we all ought to hate tomorrow," Nova Republika reported.

In early June, EU Chief for Foreign Affairs and Security Policy Federica Mogherini announced the creation of an organization within the EU that will exclusively fight Russian "propaganda." The key objective of the new body, also known as the European Foundation for Democracy, is to break the Kremlin's dominance in the Russian media.

© SPUTNIK/ IRINA GERASHCHENKO

Western Media Poisons Public Opinion Over Ukraine Conflict – EU Lawmaker

However, EU citizens understand that they'll have to fund the organization out of their own pockets. Prospects of additional costs, particularly during the times of economic hardship aren't taken lightly by EU residents, especially since many believe that there is no need for such information centers.

"This is an unwise use of funds. If you want to distribute this kind of information, it should be a private matter of an individual country within the EU. We can't establish and maintain the European information center," said Erkki Tuomioja, the former Finnish Minister of Foreign Affairs, according to the Czech newspaper.

But for now it's become clear EU ruling elites have understood long ago that it's much easier to follow orders from the US Department of State, rather than listen to the opinions of their own citizens, Nova Republika concluded.

Credit to Sputnik

Read more: http://sputniknews.com/europe/20150814/1025744250.html#ixzz3inXfUgNj

What You Need to Know to Survive World War III

Any sane man lives in fear of World War III. The following 3 videos discuss, how World War III might start, the course of the war and the 10 safest places to be when war breaks out.

This all ads up to forewarned is forearmed.  This is one article where, indeed, picture is worth a thousand words.

A very sobering view of World War III

If the end of the world comes, some countries are safer than others. We’ll show you the best places to hide out in the event everything goes wrong

Credit to Common Sense

Michele Bachmann “Extremely Excited” Iran Deal Ushering in End of Days

“And it shall come to pass on that day that I will make Jerusalem a stone of burden for all peoples; all who bear it shall be gashed, and all the nations of the earth shall gather about it.” (Zechariah 12:3)




Former Congresswoman Michelle Bachmann expressed her “excitement” over the Iran deal as a signal to the start of the End of Days. (Photo: Wiki Commons, Gage Skidmore)

In a recent radio interview, Michele Bachmann, former member of the United States House of Representatives from Minnesota, expressed her excitement over the Iran deal as a step towards the ultimate redemption.

Bachmann connected the UN Security Council vote on the Iran nuclear agreement with the fulfillment of the End of Days prophecy in Zechariah 12:3. When the UN voted unanimously on July 20th to endorse the agreement and lift sanctions against Iran, Bachmann saw a major prophecy coming true.

Interviewed on Jan Markell’s Understanding the Times radio show this past weekend, Bachmann said, “All the nations of the world signed an agreement that slams the door against Israel and opened it up to enriching and empowering the leading state sponsor of terror in the world whose ultimate goal is the annihilation of the Jewish State.”

Radio host Markell responded, “That is Zechariah 12:3, folks. That has been predicted for lots and lots of years.”

Speaking with the cadence of a preacher, Bachmann continued, “From a Biblical perspective, the Lord has allowed us to see how He is using politics, He’s using leaders, He’s using politicians, He’s using foreign policy in that to bring about where we are today.”

She further suggested that Christians should be very excited about the possibility that Congress will approve the agreement. That, she claimed, would be a further sign that the End of Days is upon us.

“I am really actually extremely excited because I think that we’re about to see if we believers act in concert, I believe that we can see the strong right arm of a holy God show to the world and prove to the world His power and His strength.”

There are similar teachings in Judaism that echo the theme found in Zechariah 12:3.

In Zechariah 14:2, it is written, “And I will gather all the nations to Jerusalem to wage war.” In his book The Ishmaelite Exile, Rabbi Yechiel Weitzman quotes the Zohar, Judaism’s fundamental mystical text, which elaborates on the prophecy of Zechariah 14:2.

The Zohar states, “In the days of the Messiah, the descendents of Ishmael [the Arab nations] will come with all the nations of the world to fight for Jerusalem.” The unanimous vote of the UN Security Council on July 20 can be seen as fitting the description of the nations of the world uniting with the descendents of Ishmael.

As for the central role of Jerusalem at the End of Days, Rabbi Weitzman writes, “Jerusalem of the twenty-first century has become ‘the eye of the storm,’ the city the nations of the world demand be made an international – or at the very least, a binational – city. It is a city rocked by cries of anguish because of murderous suicide bombers. It cries over its children who are killed and wounded and who moan in grief.”

Credit to Breaking Israel NewsRead more at http://www.breakingisraelnews.com/46857/echoing-zachariah-michele-bachmann-excited-iran-deal-end-of-days-middle-east/#DBgRdxfWjEeo2mW9.99

Messiah, the Jewish Jubilee and Redemption

“And you shall sanctify the fiftieth year, and proclaim freedom [for slaves] throughout the land for all who live on it. It shall be a Jubilee for you, and you shall return, each man to his property, and you shall return, each man to his family.” (Leviticus 25:10)






The significance of the Yovel (Jubilee) year, the 50th year after seven repetitions of the seven-year shemittah cycle, holds vastly different meanings for Christians and for Jews. Today, in the absence of a fully-functioning supreme Jewish court, known as the Sanhedrin, the Jewish community in Israel neither marks nor observes the Jubilee year. According to Jewish tradition, the reestablishment of the Biblically-mandated Jubilee year is part of the messianic process.

In Judaism, it is a positive religious commandment “to sanctify the 50th year” (Leviticus 25:8). In actual practice, the Biblically-mandated requirement to observe the Jubilee year was disrupted when the 10 Tribes were exiled approximately 2,700 years ago. Prior to that time, the Jews were careful about counting the cycles leading to the Jubilee year. They observed all the Biblical requirements of the Jubilee year, including freeing slaves and returning property to its original owner.

A Jubilee year always follows a shemittah year and the agricultural laws of shemittah are observed in a Jubilee year. There is also a connection between the Jubilee year and the arrival of the Messiah.

Breaking Israel News previously reported a connection between the end of the current shemitah year and the arrival of the Messiah. It is possible to find Jewish scholarly opinions that claim the year 5776, the upcoming year in the Jewish calendar which begins at sundown on Sunday, September 13, 2015, is a Jubilee year. However, since the counting of Jubilee years has been disrupted, this opinion is far from universally acknowledged.

If it is a positive religious commandment with a clear Biblical source, what is the reason Jews do not currently mark the Jubilee year? According to rabbinic tradition, there are three conditions for the observance of the Jubilee year and none of them are completely fulfilled today.

First, the observance of the Jubilee year is dependent on the majority of the Jewish people living in the Land of Israel. Although demographers suggest that we are close, there is not currently a clear majority of the worldwide Jewish population living in Israel.

Second, the Jewish people must live in the Biblically-assigned portions of the Land of Israel according to their original tribe. Although the work of restoring the 10 Lost Tribes back into the body of the Jewish people continues as part of the Messianic process, all of the 10 Lost tribes have yet to be accounted for.

Third, there needs to be a fully-functionally Sanhedrin in Israel. Although there is a Sanhedrin in Israel, it is not universally accepted and does not have the full complement of 71 judges.

In the absence of the majority of the Jewish people living in the Land of Israel in their tribal lands under the leadership of a Sanhedrin, the Jubilee year has no practical significance in Jewish observance today. The universally accepted declaration of the next Jubilee year waits for the Messiah’s arrival.

Credit to Breaking Israel News

Read more at http://www.breakingisraelnews.com/46741/messiah-jewish-jubilee-redemption-jewish-world/#whcZsUFbubHFSmpB.99

Jade Helm is a Warning to Americans

Experts say ‘Godzilla El Niño’ may be coming

If you don’t know El Niño now, you will soon.

The waters of the eastern Pacific Ocean are heating up, scientists say, building towards a strong El Niño event that could rival the intensity of the record 1997 event that wreaked weather-related havoc across the globe, from mudslides in California to fires in Australia.

According to the latest forecast released Thursday by NOAA’s Climate Prediction Center, this year’s El Niño is “significant and strengthening.”

“There is a greater than 90% chance that El Niño will continue through Northern Hemisphere winter 2015-16, and around an 85% chance it will last into early spring 2016,” the NOAA said in a statement.

Bill Patzert, a climatologist for the NASA’s Jet Propulsion Laboratory in La Cañada Flintridge, told the Los Angeles Times that it had the potential to be the “Godzilla El Niño.”

The weather phenomenon largely became a part of the public vernacular during the 1997 El Niño. It caused devastating flooding in the western U.S. and drought in Indonesia. It was blamed for deadly virus outbreaks in Africa and rising coffee prices around the world.

But what is El Niño, and what impact will it have this time around? Let us explain.

What is El Niño and what causes one?

El Niño is a warming of the eastern Pacific Ocean, mainly along the Equator — see the thick red belt in the satellite photo, which indicates waters that are warmer than normal.

These warmer waters are normally confined to the western Pacific by winds that blow from east to west, pushing the warmer water toward Indonesia and Australia.

But during an El Niño, the winds slow down and can even reverse direction, allowing the warmer water to spread eastward all the way to South America.

El Niños occur every two to seven years in varying intensity, and the waters of the eastern Pacific can be up to 4 degrees Celsius (7 degrees Fahrenheit) warmer than usual.

What happens when there’s an El Niño?

A strong El Niño heats up the atmosphere and changes circulation patterns around the globe, especially the jet stream over the Pacific, which becomes stronger and dumps more frequent and intense storms over the western U.S., especially California. It also means more rain for the west coast of South America.

But the atmosphere is somewhat of a zero-sum game. More rain in North and South America comes at the expense of normally rainy Southern Asia and Australia, which become abnormally dry and experience droughts.

A strong El Niño also influences cyclone seasons around the planet. The warmer the East Pacific is, the more hurricanes it gets. The Atlantic Ocean sees fewer hurricanes, however, a result of increased upper level winds that prevent hurricanes from developing, which is why officials are predicting a calm 2015 hurricane season in the U.S.

The Western Pacific, on the other hand, tends to see more and stronger typhoons, which may explain why there have already been 5 super typhoons there in 2015. Normally there’s only one by this point in the year.

The weather isn’t the only thing that’s affected. Warmer surface waters in the eastern Pacific drive away the coldwater fish that are the backbone of the fishing industry in much of Latin America. It was here that the phenomenon was first noticed by fishermen, who named it “El Niño” — meaning “little boy” or “Christ child” in Spanish — since it would often appear around Christmas.

Will this El Niño be worse than 1997?

Credit: CNN

Credit to Kfor.com