Dear PGM Capital Blog readers,
In this weekend blog edition, we want to elaborate on the biggest sell-off on Wall Street since November 2011.
DOW-JONES INDEX:
The USA blue chip Index, the DOW-Jones Industrial, declined from 17,545.18 points on the close of Monday August 17, to close at 16,459.75 points on Friday, August 21st, a decline of 1,085.43 points or 6.19% in four days, as can be seen from below chart.
With a drop of 530 points on Friday August 21, the blue chip index was more than 10 percent below its 52-week high (also an all-time intraday high) of 18,351.36 of May 19 this year, and in correction territory for the first time since 2011 as all blue chips declined. The last time the index closed more than 500 points lower was on Aug. 10, 2011. In the last five years, the index has only had four instances with closing losses of more than 400 points.
NASDAQ INDEX:
The technology weighted NASDAQ index dropped form 5091.70 points on the close of Monday August 17, to 4,706.04 points at the close on Friday, August 21st, a decline of 385.66 points or 7.57% in four days, as can be seen from below chart.
THE S&P-500 INDEX:
The broader Index, the S&P 500, declined form 2,102.44 points on the close of Monday August 17, to 1,970.89 points at the close on Friday, August 21st, a decline of 131.55 points or 6.26% in four days, as can be seen from below chart.
The Index fell through its support level of 1,980 to end at 1,970, off 7.6 percent from its 52-week high. The index is off about 4.3 percent for the year so far. Information technology and energy led all 10 sectors lower on the day. Energy was the worst decliner for the week, with no sectors posting weekly gains.
About 70 percent of the S&P 500 is in correction or worse, with 31 percent in a bear market and 39 percent in correction territory.
GOLD:
Gold futures settled at a more than six-week high on Friday to score their biggest weekly gain since January as a slump in equities and a drop in the U.S. dollar buoyed the metal’s investment appeal.
Gold futures increase with 3,7% during the week to settled at a more than six-week high on Friday, August 21 as can be seen from below chart, to score their biggest weekly gain since January of this year.
PGM CAPITAL COMMENTS:
The US stock market and the FED are trapped. The market can’t go up because it was only going up because it had QE. That ended. The vapors from QE were so strong that they held the market up for almost a year. Now it (the stock market) is tanking and the FED can’t initiate more QE because they’ve been talking about a rate hike because they don’t understand the economy either.
We have been predicting this crash of the USA markets for months and have warned our readers, that the USA markets as well as the US-Dollar are in a bubble and the country’s economy isn’t as good as the US-media and policy makers want you to believe and that the next crash and recession will be much worst than the one of 2008-2009.
We also advise you to follow, legendary investors like George Soros and Stanley Druckenmiller who are shorting US stocks and are seeking safe haven in Gold.
Billionaire investor George Soros increased his bet against the US stock market by more than 600pc in the second quarter, regulatory filings show.
George Soros:
George Soros “the man who broke the Bank of England” for his US$10 billion bet against the Pound Sterling in the 1990s, has now taken out a US$2.2 billion bet that the S&P 500 will fall, according to his Q2-2015 filing with the Securities and Exchange Commission.
This takes Soros Fund Management’s short position on the index from 3 percent of his portfolio to 17 percent.
Stanley Druckenmiller:
Over the past several years, one of the biggest critics of the FED’s monetary policy has been billionaire investor Stanley Druckenmiller, who in 2010 announced he would be shutting down his legendary Duquesne Capital Management, and convert it to a family office.
According to his family office’s most recent SEC filing, Stanley Druckenmiller that at the end of Q2-2015, the largest position for Stanley Druckenmiller was none other than gold, following the purchase of 2.9 million shares of the SPDR Gold Share shares (NYSE:GLD). The new position was worth approximately US$323.6 million at the end of June, and made up more than 20% of Druckenmiller’s total holdings.
Below table shows the top 29 holdings of of Stanley Druckenmiller on June 30, 2015, as filed with the SEC.
If you are not familiar with Stanley Druckenmiller, know this: he used to be the chief strategist for George Soros and it was his idea to short the British pound in 1992, which famously “broke the Bank of England.” The legendary shorting made Soros’s Quantum fund US$1.0 billion.
Moreover, Druckenmiller has a tremendous track record when it comes to investing. His own hedge fund, Duquesne Capital Management, averaged an annual return of 30% from 1986 to 2010.
USA-EUROPE-CHINA Markets:
The USA media in echo are blaming Europa and China, for the crash of the USA markets, how ever below 1-year charts of the USA-DOW versus the German-DAX-30 and USA-DOW versus the Chinese-CSI-300, shows the complete opposite.
1-year Chart of USA_DOW Jones versus German_DAX
1-year chart of USA_DOW Jones versus China’s_CSI-300
Or like Peter Schiff said in its latest video blog said:
“U. S. Stock Market Correction are Not Made In China”
Most of readers will be asking themselves after reading this article, what will be next for the US-Markets;
- Is the current correction in the US-Markets almost over, or will the US-Markets continue to thank and enter a bear market soon?
Our reply on this is simple, keep an eye on the holdings of legendary investors like George Soros and Stanley Druckenmiller, if they are shoring USA stocks and buying Gold, you know what direction these Gurus believe the USA-Market will go in the short and mid term.
Until next week.
Yours sincerely,
Eric Panneflek