I've never been very interested in stocks and shares, concentrating more on property and credit. However there must come a time when the money is needed elsewhere, and I'm guessing that it would not need a particually big drop to send a lot of fairly jumpy investors running for the exits. I'm also guessing there is less money available than in the past available for buying up bargains. Coupled with emerging stories about High Street stores folding and private equity having to dip into its own pockets, and based on nothing other than a feeling in my bones, I predict a crash before this year is out.

Would others with more knowledge care to comment?

Actually, I predict the opposite - a rally in the run up to Christmas and then during the Jan sales.

I suspect we will begin to see lots of buoyed up sales reports in the coming 10 days with recently reduced IRs being cited as the cause - "UK shoppers are returning to the High Street as a result of recent interest rate cuts!" blah, blah, blah!

I think you'll find the convention here is to name a weekday preceded by the word "Black".

Could well be.

However over the last few years, the trend has been for depressed shopping until about a week before Christmas, when everyone rushes to the shops, this data only coming out after the festive season. Certainly from the amout of "three days only" 25% and 30% discount posters I see, this is the pattern that retailers are expecting.

Like I say, it's just a guess.



I know. But most of those posts have at least a tenuous reason for calling it. I'm just playing with cosmic ordering.

I think what you will see is greater volatility, and a major disconnect forming in the stock markets. If you were to look at the financials and the homebuilders, then the crash would have already begun in earnest. If you were, however to look at the energy stocks, mining, shipping or commodity stocks, you'd be wondering what crash everyone was talking about. That's not to say the good will not be dragged down somewhat with the bad. Even gold gets dragged down in a broad selloff, as loss covering means anything good gets sold to pay the margin calls on the bad etc. Hence the volatility, which i think will get ever more extreme, as wave after wave of financial shocks rock the system, followed by bargain hunters jumping in on the good oversold stocks - But overall, the major indexes will perform rather badly, as overall liquidation pressures bear down on the market..

for a stock market to crash and not just correct I believe you would need headier valuations than we have.particulalrl;y in the 100,big oil and big pharma is nowhere near trouble.Banks are,as you would expect are on single digits but it's not a bubble.as we enter a deflationary period,there is a good chance that some of the investment money flowing our of property will hit stocks.Big crashes were preceeded by a specualtive bubble,and while private equity has pumped up the 350,the big boys haven't moved in ten years really.

there appears to eb no sign of a big spike in bond yields and thus i would not anticipate to a big crash.it's all relative I suppose,what you call a correction but 20% wouldn't have me kakking my pants.However i would sell on rallies and hoard some cash and wait till the tree gets shaken again

Btw, with the little knowledge I have available on the subject it is difficult for me to state whether I do indeed have more knowledge than you. How much do you have? A handful? A bucketful? Can you measure it please?

Since the IRs have come down I have been amazed how blinkered, and even angry, many on here have been and have become adamant that the house of cards is collapsing. Many seem to forget that much of the Public only now think in terms of lower IRs = Good and hence seem to be in denial about lower IRs causing a bounce in spending.

In the last housing downturn the FTSE actually soared.

In the UK at least, with IRs cut last week helping out builders, banks indicating a technical rally, oil and gas rising and so on it is difficult to see what would trigger a large sell in the next 2 weeks. We're getting close to re-testing the highs, so that resistance may trigger a sell-off. Wait and see what happens with the FED tomorrow evening.

What, like "Black Christmas" or something?

I have the same gut feeling.

I have a strong feeling you are correct, but when? some time soon I think. Could even be before xmas.

With ref to MFI:

Black Ash (effect) Saturday




sorry

The FTSE 250 peak close was on 23 May 2007 at 12220.17 and closed at 10632.92 last Friday 13% below that peak.

The FTSE 100 peak close was on 15 June 2007 at 6732.39 and closed at 6554.93 last Friday 2.6% below that peak.

The market is up a little today but a 10% correction in the FTSE 250 constitutes the beginning of a bear market - the FTSE 100 is not currently down as much because of the strength of mining stocks that make up a significant fraction of the FTSE capital;isation. If you took those away the FTSE 100 would be more or less down as much as the FTSE 250. The bear market has begun - its just the headlines have not yet caught up because the FTSE 100 index has not yet fallen very much.

Interestingly, the FTSE 100 has not yet breached the peak close level it reached on 30 December 1999 of 6930.20.

I am hoping that we manage to make it to the middle of next year before the really serious bear market begins.

Ha! I thought that was funny...

Horse, what do you mean you're playing with cosmic ordering - do you mean you're ordering a crash? Such types of orders are null and void, apparently. Shedloads of cash on the other hand, through cosmic ordering and a bit of effort all yours...

(I just checked my lotto numbers from Sat, looks like I ain't getting my order so easily either. )

Doesn't really work like that, there is a disconnect between equities and other asset classes - this is readily illustrated in property whereby commercial property shares are down 30%+ this year, reflecting investors expectation of property value declines even though they have not been seen yet (talking to some, it seems transactions have slowed sharply, so no one has any real confidence in value).

Bear in mind the marginal investor in equities is not usually the retail investor (well, it is in Asia, and can be in the UK, but not at the moment) and it would seem that most institutional investors hold strong cash balances already. The current negative newsflow is not a new story to the average institutional equity investor, with housebuilders, banks etc also down strongly this year, by the time the bad profits arrive in an industry, the stock market has seen a good measure of it coming, it's mostly fairly obvious. The overall performance of the equity market is buoyed up by strong commodity prices, (oil etc!), with the FTSE 100 up nearly 10% despite the myriad of declines mentioned.

In fact, your case might be argued the other way. Bad news will continue, but with inflationary fears, bonds will be poor (rising yields means lower capital values), property likewise, commodities have already risen strongly so equities might prove a good hedge against inflation, perhaps, its a long story.

You might even see retail investment flows as sheeple give up believing their house will be their pension, stop spending/"investing" and start saving, with increased flows into their dramatically underfunded pension pots. A Govt keen (well, not keen, but seemingly prepared to forego inflation and spending control in return for trying to keep the ship afloat) to undermine the currency is not a great advert for foreign investment into the UK, but a good part of the value in the UK equity market is overseas investment so you get the depreciation in the currency as an appreciation in your sterling equity investment. (think of it this way - a UK co owns an Asian business - as the £ falls, so the value of the Asian business in the UK share price rises)

Bear in mind, house prices starting falling in 1989, but the market crash was 1987, and money switched from property into equities when the news was so bad in the real world would have been good for you.

No, not seriously.

Maybe I should change the title to Black Christmas to underline the lack of seriousness in the original post.

However, dispatches is on tonight. That apparently has a pretty doomy xmas message.
http://www.channel4.com/news/articles/disp...+crisis/1149347

The best time for a stock market crash would be Easter... it just feels right... It has the same "Church colour" too.

Anyone thinking there could be a drop next week?

Nothing in particular, just the build up of lots of bad signals added to people rethinking their positions
before the christmas break?

After Christmas, there will be a dramatic crash. It will start in the US and pull down markets worldwide by 20%+. This before Easter.

By the end of 2008 Shanghai will be down 60%. The FTSE will finish 2008 at ~4,500, the DOW at ~10,000

Good post and summed up what was going on at the time especially the reference to mining stocks, to take todays figures.

The FTSE 100 is now at 6202 - 7.9% off the peak
The FTSE 250 is now at 9829.8 - 19.5% off the peak

I'm surprised how this seems to be slipping people by, as 19.5% surely thats not far off a crash.

I wouldn't be surprised. Word on the street is February for the big dip. Don't ask me why, you know what these 'words' are like - straws in the wind etc. Maybe there are some crucial numbers out that month that are being homed in on. But February keeps cropping up, so that's my guess.

I think your hunch (and mine) could well become a reality.
I note a fall of over 5% today which has been preceeded by a few smaller falls. A large single day fall over the next month or so can not be ruled out although I suspect a slide to unknown depths over the next 6 months.

Correction seem not over yet.... many finanical markets index are already down 10% to 20% and alot of company already do share buyback and takeover bid still on the table recently (Microsoft & Yahoo story)...