Wednesday, January 7, 2015

UK Telegraph: 10 Warning Signs of a Market Crash in 2015

Forecasts for 2015 are everywhere as we would expect for this time of year. Here is an article in the UK Telegraph warning that there are 10 signs of a possible market crash in 2015 that are flashing right now. Recall that Bo Polny is predicting a stock market crash in 2015 also. We will track it here and see what happens. Below some quotes from this Telegraph article. Please read the entire article linked above.


"The FTSE 100 slid on the first day of trading in 2015. Here are 10 warning signs that the markets may drop further."                   (click on this link to see the 10 warning signs they list).

"Professional investors are already making for the exit. The Bloomberg smart money flow index tracks the market movements at the end of the trading day on the Dow Jones, when professional investors tend to make their move. The index showed heavy buying activity from 2009 onwards as professional investors followed central banks' money into the markets, achieving record gains during the past five years. That trend was reversed from the beginning of 2014 and the smart money is now making for the exit, as the S&P 500 carries on rising to new record highs."
"The structure of global capital markets is such that the $68 trillion equity market is riskier and sits on top of a credit market worth more than $100 trillion. As yields have fallen in the credit markets, the excess profits have flowed up to equity, in turn lifting stock markets to record highs."
"The reversal of that trend, one of increased risk and rising credit yields will reduce returns to equity and send shockwaves through stock markets. The warning signs are not all flashing red just yet but investors would do well to head these indicators that suggest caution and prepare their portfolio before the crowd flocks to the exit."
My added comment:
Added note: We have already noted here on the blog the prediction by Bo Polny that 2015 will see a sharp stock market selloff. He updates that prediction here in this article he posted on Silver Doctors.

CNBC 50 year veteran analyst Art Cashin issued a warning to keep a close eye on the stock market as well. He mentions Greece as a source of concern. We will have more on Greece as its election gets closer (January 25th).

With markets already starting out very volatile in 2015, it looks like we may hit one of our Fearless Forecasts posted in late December. See # 5 in the list (at least the volatility part).

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