Graham Summers’ Weekly Market Forecast (Flashback Thanksgiving 2009? Edition)

Stocks broke down in a big way last week as the situation in Europe has become truly dire. I’ll be addressing that situation in greater detail tomorrow, but for now, you should know that there are truly only two possible outcomes for the Euro:

1)   The ECB prints money and Germany leaves the EU

2)   Germany remains in the EU but moves to kick other countries out as the defaults start coming fast

The market has already proven that the EFSF won’t save the Euro. And Italy, the third largest bond market in the world, is creeping towards a default by the minute. So the above outcomes are the only realistic options that are left. And both of them will send the Euro, and stocks, lower in a big way.

On that note, the S&P 500 broke down last week as the descending trendline (black line) from the July top proved to be too much for this latest rally to overcome. We’ve now taken out the lower trendline (green line) that supported stocks since October as well as critical support (red line) formed by the trading range that dominated the market’s action from August through October.

Once we get a definitive move below the red line in the chart above, then the door is open for us to test support at 1,175 and possibly even 1,125 in short order.

This is a holiday week so trading volume will be light. However, recall that it was during Thanksgiving 2009 that the sovereign defaults first started when Dubai asked for an extension on $60 billion in debt it owed. Will we get a European version of the Thanksgiving day collapse this time around with Italy? It’s definitely possible as the ECB is now intervening on a daily basis to slow down the bond implosion over there.

On that note, both Gold and Silver are looking deflationary… or at least undergoing liquidations.


Remember, defaults are deflationary in nature, and given that Europe is literally on the brink of systemic failure, Gold and Silver’s recent action may be hinting that we’re about to see another round of defaults/ deflation in the markets.

After all, when you combine the situation in Europe, along with the ongoing Depression in the US, MF Global’s bankruptcy, and the fact that most institutional investors remain heavily invested to the long-side (opening the door to intense selling pressure as everyone has gone “all in”), you’ve got a recipe for a REAL collapse.

So, just be aware that if things get messy, the markets could get downright UGLY fast. Leverage levels today exceed those of the Tech bubble. And we’ve already had one player taken out by bad bets (MF Global).

If you’re an individual investor (not a day trader) looking for the means of profiting from all of this, then you NEED to check out my Private Wealth Advisory newsletter.

Private Wealth Advisory is a bi-weekly investment advisory that uses stocks and ETFs to profit from the dominant market trends.

Every two weeks I outline what’s REALLY going on behind the scenes in the markets, as well as which investments will profit best from these developments.

Case in point, Private Wealth Advisory subscribers caught the initial market Collapse in August. They’ve also profited beautifully from the ongoing turmoil in Europe as well as the volatility in the US Dollar.

In fact, we just closed out our 20th and 21st straight winners last week. And we haven’t closed a single loser since the END OF JULY.

But don’t worry that all the profits have already been made. We currently have several trades open that are primed to explode higher in the coming weeks. By subscribing today, you’ll immediately be given access to them.

You’ll also gain immediate access to my Protect Your Family, Protect Your Savings, and Protect Your Portfolio Special Reports outlining how to prepare these areas of your life for the coming Great Crisis.

These reports outline:


1) how to prepare for bank holidays

2) which banks to avoid

3) how much bullion to own

4) how much cash is needed to get through systemic crises

5) how much food to stockpile, what kind to get, and where to get it

And more…

To take out an annual subscription to Private Wealth Advisory now… start profiting from the market’s gyrations (again we haven’t closed a losing trade since JULY)… and gain access to all my Special Reports…

Click Here Now!!!

Best Regards,

Graham Summers

Posted by Phoenix Capital Research