Stagflation and slow consumer spending are making market ready for October crash again - Dow Ends Down 36, Nasdaq Closes Down 16
Sam Adelton
Aug. 21, 2006

The bull market is showing signs of tiredness.The possibility fo the October melt down just like 1987 is real again.

Stagflation and slow consumer spending is making market ready for October crash again - Dow Ends Down 36, Nasdaq Closes Down 16.

The differnce between October 1987 and October 2006 is as follows. The 1987 crash and 2006 possible crash have slightly different fundamentals.

In 1987, the Fed raised interest rates without any control only to make the market crash and lower the rates back. Smart investors bought S&P 100 puts and then used the huge profit from market crash to buy T-Bond futures call options. It was not uncommon to make 1000% within three weeks.

This time Fed has done the same mistake. The economy is loaded with consumer and Government debts and air has the smell of stagflation. The economy is weak. At the same time inflation is knocking at the door with Gold and oil prices showing their teeth.

What can happen in 2006?

The market will either crash or after a steep fall continue to go down for a long time.

The worldwide markets are matured bulls and tired as hell. The failure at World Trade Oragnization also poses problems. The biggest problem is the debt burden and slowing real estate market though.

Stagflation and slow consumer spending are making market ready for October crash again - Dow Ends Down 36, Nasdaq Closes Down 16
Sam Adelton
The bull market is showing signs of tiredness.The possibility fo the October melt down just like 1987 is real again.
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