In a recent update I gave six signs of an impending crash. Just today we have a number of those signs starting to hit.
Despite a $486 billion fund to prop up the Chinese market, China's stocks sunk another 8.5% on Monday — the biggest one-day drop since 2007.
This is following a 35% crash into early July. Now, after bouncing back up to 4,200, the Shanghai Composite is down to 3,750. If it falls another 10% to below its recent low of 3,374, that will be the decisive blow — for us and them.
I say this because China is my No. 1 indicator for a global market crash.
If — not, when! — its stock bubble continues to burst, real estate will be on its heels. Because China owns so damn much real estate, falling real-estate prices will be the single biggest trigger for the global markets.
Europe is in bad shape too.
The DAX in Germany just started to crash again down 2.56% to below 11,100 on Tuesday — down over 10% from the top! It is showing little sign of reaching a new high.
Overall the broader European markets are nowhere near their 2007 highs. Measured by the Stoxx 50 (FEZ ETF), they are down 41% — even with the recent bounce!
As for US stocks, they seem to be imploding from within!
Even though the Nasdaq hit new highs recently, the advance/decline line didn't. That means more stocks went down than up, even though the most aggressive market hit a high!
That is an extreme bearish sign showing that investors have gotten very selective in the final stages of this bull market.
Another important divergence in US markets is that the Dow did not make new highs — most notably, Dow transport stocks.
Then there is biotech, the leading sector of the bubbling tech stocks, which is also taking a near 2% hit on Tuesday.
With the way stocks are selling off, I expect we will see a bounce in the coming weeks. I even think we could see China's Shanghai index bounce to between 4,300 and 4,500.
But I do not expect that bounce will reach new highs. When they fail to achieve that, it will signal the final top.
Finally, the greatest near-term threat that will wreak havoc on American soil will be the death of the fracking industry.
Just last week, oil broke below $50. On Tuesday it fell to a four-month low of $47.39.
That means last year's $42 low is most likely on its way, and $32 after that.
Most experts keep saying oil will be back to $70 to $80 by the end of the year.
Not us!
Oil will keep falling. It will force the frackers out of business. And when they default on the $600 billion in junk bonds and leveraged loans they have used to fund their drilling, it will be like the next subprime crisis in the US!
Oil is down. Stocks are down. Gold too.
It's all coming to pass!
Now more than ever, it is critical that you equip yourself with the necessary strategies to survive the onslaught ahead. It is coming, probably fast.
Don't let your emotions get the best of you as the markets continue to topple.
Find a strategy that suits you, stick to it, and breathe.
We will keep you updated …
But the great crash ahead looks more and more imminent.