- Posted January 31, 2014 by
Why the Stock Market May Crash as Forecast with Innovative Physics
A crash is a monumental decline that occurs over a short period of time, that is not expected. As you look at the chart above you can see that the market is very close to the area marked as DANGER. If the market goes down to that area then the probability of a significant quick decline to the lower noted area or beyond, that is quick and unexpected by many is high. Recently the Innovative Physics market indicator had extremely bearish long term signals.
These are all technical reasons. Most are asking what are the fundamental reasons behind it ? During the market run up there was massive buying back of company stock by many large companies. VP's of Finance know that if they can do things that bring in income they can justify large pay increases and bonuses. What they did was have the company borrow money in order to buy company stock. The stock value went up a lot for most companies and 2013 was a banner year. These VP's of finance know that as the fed tapers the market will not continue the strong up move.
As a result they have stopped buying and started to sell the company stock in order to insure a profit for the firm.
Typically in a stock market rally, the last group to get in is the average joe. These are the individuals that have been jumping into the market in 2013. So the question is who is left? Fresh buyers are needed.