Massive Stock Market Crash Imminent According to BAM Model

Well, it looks like we’re at the moment of truth with respect to the BAM Model’s prediction of an imminent stock market crash.  Clients should be well prepared, having been provided ample warning and we’ve also done our best to warn individual investors who have been following us via our blog, website or Twitter campaign.

Imminent CrashThis has certainly been an interesting period for our business launch (to individual investors) and we hope we can assist a few in protecting their hard-earned money.

The catalyst for the expected crash–assuming we get this right–could come from anywhere or nowhere at all, but our best guess is that we’ll see USD strength set off a global short-covering stampede in the dollar index.

Assuming that occurs, it would likely spark a vicious cycle whereby mechanical selling–and buying in markets where Carry Trade money has found a home on the short side–literally unwinds this undiversified single-bet that the masses seem to be clinging on to.

Subscribers will remember that this is the same dynamic the model identified during 2007-2008 vis-a-vis the YEN–and we all know how that ended.  I vividly recall clients telling me the model’s very bullish YEN call made no sense at all and that Japan was still many years away from any recovery that could provide the proper fundamental backdrop for strength in their currency.

Don’t forget that whatever happens during October, this is only the start of the next leg down according to the model.  We’re facing what appears to be a brutal five months ahead of us and our target remains down at SPX 529.

As I said to clients yesterday…the rest is up to Mr. Market.

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  1. 1

    http://www.zerohedge.com/sites/default/files/images/NAAIM%20survey.jpg

    That chart speaks volumes on the current sentiment and sets up nicely with your BAM model.

    remind folks not to invest too big of a % of their investable funds at a time. This stuff is tricky and some of the smartest don’t even bother trying to make such predictions.

  2. 2

    Evidently Mr. Market intends to remain irrational much longer than most of us making contra bets can remain solvent. Your forecast has a little catching up to do it seems after today.

    1. 2.1

      We’re involved in many positions at the same time–not just stocks–and, luck for us, our bullish wheat, USDSEK, and Bond positions have more than made up for any drag coming from being negative on the stock averages.

  3. 3

    How can your model account for the fact that the government is effectively managing the markets and every tiny set back in markets results in a POMO injection? While I am bearish and believe the markets are overpriced in the short run, I cannot fathom all the Fed support being withdrawn suddenly. The administration simply wouldn’t allow it.

    1. 3.1

      Our model is based 100% on the emotional inputs we track and those inputs capture a raw display of market participants fear and greed. We don’t have a method for measuring the effects of government intervention but, based on history, we think gov intervention usually creates more problems than it solves.

  4. 4

    If this chart in Oil Plays out,,we will Crash to March Lows.IMO

    http://www.screencast.com/users/chartwiz/folders/Jing/media/8f9bdb46-e578-431f-b6e0-193ae986eaa7

    http://www.screencast.com/users/chartwiz/folders/Jing/media/27fa8454-b6e2-4e5c-81a9-91abcfbc4dc4

    The importance of the next few days,,,,

    2002 Low was on …….October-10-02

    2007 High was on …….October-11-07

    October 11th is 90 degrees from july Pivot..
    October 9th is 270 degrees from Jan 6th High
    October 12th is 120 degrees from June High

    Yes and anniversary of 1998 low, and 1987 pivot high before crash which was one of the largest spikes every at that point, and the anniversary of 1979 peak 360 months ago..

    Lots of vibrations here

    And Columbus Found Discovers America on October 12th 1492

    It’s NOT! A coincidence,,,,,,,,Lots of Vibrations around these Dates…Something Gotta Give.

  5. 5

    [...] This post was mentioned on Twitter by BAM Investor and James Regier. James Regier said: Massive Stock Market Crash Imminent According to BAM Model http://bit.ly/kUbf2 via @AddToAny [...]

  6. 6

    Congradulations on being specific – very rare today. Wish you the best and wonder if your desire to be so public could prove to be a detriment down the road. As you educate more people, the Big Boys will nor like losing their misinformed Sheep.
    Thanks for your insights, best of everything.
    Doug

  7. 7

    The technical data doesn’t support that a crash is coming this week.
    If we move higher from here and the crash (or decline, the market doesn’t crash all the time) comes in December this year, would you still claim to have made the right call?
    We all know that we return to an intermediate term down trend in the future. The only question is when. The “when” is quite important if someone wants to time his “put” trades.
    I’m in December puts right now at a rather low strike, so I could use a crash rather sooner than later.

  8. 8

    Markets running nicely at 4X all time high P/E’s based upon 0% interest rate free printed cash nitromethane fuel which the world is revolting mightily against. Unka Ben knows he cant raise interest rates or stop the POMO fuel injection, so anyone long here or in the insane case of NEW longs at this point better be very careful. The smallest unseen event will cause this biggest fraud in history to collapse overnite. What we’ll see is not a sell off, but a replay of the instant fall of the Soviet Union where 1 morning we woke up and saw on TV tanks rolling thru the Kremlin campus.

  9. 9

    Another new high. Trend is STILL strong up. This crash talk
    sounds a lot like the xtrends blog. It’s just guessing as long as the trend is UP.
    Why not wait till the trend has changed before calling for a crash?

  10. 10

    Have the “emotional inputs” to your model ever been known to change causing you reverse your call? The Fed is trying hard to entice buyers into market, i.e. zero percent interest rates, huge excess reserves at banks, media frenzy over new highs, etc.

  11. 11

    dow will cross 11k by oct end. i bet 1000usd

  12. 12

    Well, I am a believer in the prognosis that this will crash and crash hard. No enough impetus in the economy to continue, and the markets reflect this. Consider a recent double top, Head and shoulders for the US S&P and the right shoulder is forming now. Drop possibly imminent? Consumers have been left behind in this government socialistic takeover of the big businesses in the US. Only a matter of time before the Fed changes their policy on interest rates and the guys with all the government backing, the big banks, will scream down. Dollar rallies and the US stock market drops like a big rock. Not sure how far but a significant amount for sure.

    Too many rah rahs on the networks plugging the optimistic outlook, they will get squashed and Cramer will be on the talk shows again beggin’ for a job.

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