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September
04
2021

The Four Horseman of the Coming Crash, Pt 3
Graham Summers

Over the last two days, I’ve outlined THE single most important development you need to see, in order for the market to crash.

Think of them as BIG warnings, or the FOUR Horsemen that precede a stock market apocalypse.

What are they?

When most heavily weighted companies began to break down badly.

Technically, the S&P 500 is made up of 500 companies. However, each of those 500 stocks don’t receive the same weight from the index. Rather, certain stocks receive a disproportionate weighting giving them a much larger impact on the market’s price action.

Because of this, in order to get a crash, you need the heaviest weighted stocks to break down badly. Put another way, even if most of the 500 companies in the overall market are in a downtrend, if the heaviest weighted stocks DON’T break down, it’s pretty much impossible for the overall market to crash.

Yesterday we reviewed the 1987 crash, noting that the vast majority of the 10 most heavily weighted stocks had broken down in clear warnings that the market was in serious trouble.

Let’s apply this same methodology to today’s market. Today, the top 10 most heavily weighted stocks in the S&P 500 are:

Note that out of an index of 500 companies, these 10 alone account for nearly 30% of the market’s weight. So, in order for the market to crash, we need to see them breakdown badly.

So, let’s take a look at the top five today (September 2021).

Apple (AAPL): this stock is clearly in an uptrend.

Microsoft (MSFT): STRONG uptrend.

Amazon (AMZN): this is a weak chart. AMZN has been chopping back and forth for a year now. It’s not as bad as if the company had entered a definite downtrend, but it’s still pretty bad.

Facebook (FB): strong uptrend.

Alphabet (GOOGL): incredible uptrend.

Put simply, out of the top FIVE companies in the S&P 500, which account for nearly a quarter of the market’s weight (22.8% to be exact), FOUR of them are in strong uptrends.

While the market is definitely in a bubble, until these companies break down, the odds of a crash remain small. So, for now, it’s best to let this bubble run. Just keep an eye on these companies. Once they start to break down, you’ll know it’s time to start getting defensive.

In the meantime, if you’re looking for a guide on how to means to accurately predict crashes, what investments perform best during them, and how to take out “portfolio insurance” on your portfolio, we offer an Exclusive Investment Report, The Stock Market Crash Survival Guide outlining all those items and more.

To pick up a FREE copy, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,

 

Graham Summers, MBA is Chief Market Strategist for Phoenix Capital Research, an investment research firm based in the Washington DC-metro area.

Graham’s sterling track record and history of major predictions has made him one of the most sought after investment analysts in the world. He is one of only 20 experts in the world who are on record as predicting the 2008 Crash. Since then he has accurately predicted the EU Meltdown of 2011-2012 (locking in 73 consecutive winners during this period), Gold’s rise to $2,000 per ounce (and subsequent collapse), China’s market crash and more.

His views on business and investing has been featured in RollingStone magazine, The New York Post, CNN Money, Crain’s New York Business, the National Review, Thomson Reuters, the Fox Business, and more. His commentary is regularly featured on ZeroHedge and other online investment outlets.

 

 

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