Stocks Drop Hard… What’s Next?

Yesterday’s drop in stocks did a lot of damage to their rally.

Stocks broke down in a big way. As I write this, they’ve broken their bearish rising wedge (blue lines) and have crashed through support (orange line).

A Significant Drop In Stocks

This is very bad news.

Throughout all of August and most of early September, I warned that stocks would only hold up until roughly the Fed’s September meeting (September 17-18). Those days formally appear to have marked the recent top.

Stocks Already Reached Their Top

So what comes next?

Momentum stocks are all suggesting a major breakdown is coming. Netflix, Wayfair, and Tesla – all of them Wall Street darlings – suggest the market could collapse to 2,600 or lower.

Here’s the breakdown in the chart below:

  • S&P 500: Light blue line
  • Netflix (NFLX): Dark blue line
  • Wayfair (W): Orange line
  • Tesla (TSLA): Green line

Momentum Stocks Suggest An Even Bigger Drop

Unfortunately, that’s not the worst of it either…

Real world economic indicators say the market could go even lower.

FedEx, a major global bell-weather, says the market could drop to 2,400. And copper and Treasuries suggest the markets could crash to 2,000.

Here’s the breakdown in the chart below:

  • S&P 500: Dark blue line
  • FedEx (FDX): Orange line
  • Copper: Light blue line
  • U.S. Treasuries: Green line

Economic Indicators Also Predict A Major Breakdown

I’m keeping a watch on all of this. And if anything changes, I’ll let you know right here in Money and Crisis.

Best Regards,

Graham Summers
Editor, Money & Crisis

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Graham Summers

Editor Graham Summers has spent the last 15 years building a reputation as one of the most sought after and highly respected investment strategists on the planet. His work has been read and quoted by former Presidential advisors, award-winning institutional analysts, U.S. Senators, and more. He’s one of the few analysts on the planet to...

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