RED ALERT — Get ready for a 'severe fall' in the stock market, HSBC says

[Sanguine]

HSBC's technical-analysis team has thrown up the ultimate warning signal.

In a note to clients released Wednesday, Murray Gunn, the head of technical analysis for HSBC, said he had become on "RED ALERT" for an imminent sell-off in stocks given the price action over the past few weeks.

Gunn uses a type of technical analysis called the Elliott Wave Principle, which tracks alternating patterns in the stock market to discern investors' behavior and possible next moves.

In late September, Gunn said the stock market's moves looked eerily similar to those just before the 1987 stock market crash. Citi's Tom Fitzpatrick also highlighted  the market's similarities to the 1987 crash just a few days ago. On September 30, Gunn said stocks were under an "orange alert," as they looked to him as if they had topped out.

And now, given the  200-point decline for the Dow on Tuesday, Gunn thinks the drop is here.

For more:  http://www.businessinsider.com/hsbc-red-alert-get-ready-for-a-severe-fall-in-the-stock-market-2016-10

[mirraflake]

I have seen numerous of these doom and gloom stock market forecast. None never materialized.. 

Some things are different from the past especially with 2008..banks overall  have very strong balance sheets, corporations are awash with cash.
We are due for a good healthy 1000 pt correction but it always comes back better than before.

[Sanguine]

I have seen numerous of these doom and gloom stock market forecast. None never materialized.. 

Some things are different from the past especially with 2008..banks overall  have very strong balance sheets, corporations are awash with cash.
We are due for a good healthy 1000 pt correction but it always comes back better than before.

Perhaps.  What historical precedent would you draw from to explain what to expect in the near future?

@mirraflake

[JustPassinThru]

The market right now is highly manipulated, the plaything of a few institutional players.  The mega-banks.

With Glass-Steagall gone, and with ZIRP at the Fed Discount window, the banksters are pouring OPM into the stock markets...paying themselves commissions and buying without discretion.

At some point, since they are a small number and represent the bulk of the low-levels of trading going on...at some point, by some signal they'll understand, they will sell, more-or-less in unison.  Could happen in a "Flash Crash" as we've seen; or it could happen in a more orderly way...over the course of a day or a week.  But it will happen; and the Muppet investors will be left out to dry.

The fundamentals don't reflect the stock prices in most cases.  Earnings are down, in some cases there's heavy losses.  JCPenney and Sears have shown multiyear losses; but each time they rearrange the players, with a new Fix-It CEO or new Five-Year Plan...their stock prices go UP.

So for HSBC to say the market will tank, is not a prediction.  It's a statement of their intentions.