The Dow had been up as much as 300 points prior to the vote for the $700 billion bailout package. Once the bailout was approved, however, severe selling ensued as it apparently dawned upon investors that the government's newest rescue effort is way too little way too late. The hard truth of the matter is that the only way to have prevented the current financial meltdown is to never have let the credit bubble get so insanely out-of-hand in the first place. But, alas, man's greed almost knew no bounds!
The stock market's action last week was technically disasterous. The S&P was down 7.5 per cent, the Nasdaq fell 9.3 per cent and the Dow Jones dropped 5.5 per cent....the worst weekly sell-off in six years.
Importantly, the lower channel of the stock market's decline since the Grand Supercycle top last October was violated on the downside:
This is akin to the bottom following out of the market....a point that might become abundantly clear with a decisive break below the psychologically critical 10,000 mark in the DJIA.
Notably, the Dow Transports seem to be leading the way lower and plunged more than 8% Thursday. The index is poised to drop below the January low at 4000 and put the proverbial final nail in the coffin for the stock market in terms of Dow Theory:
All indications are that we are in wave-3 of wave-(3), i.e., the initial crash wave, of the Grand Supercycle bear market. Even though the stock market is currently very oversold and contrarian indicators such as the VIX and put-to-call ratio suggest a significant low is near, the scale and power of this crash wave are so great that the global panic might still only be in an early stage. Accordingly, a full-scale '29/'87-style stock market crash could unfold as early as this week with 'black' panic days on Wall Street where equity prices fall 10%+ in a single trading session.
As I've been warning about since last spring, the Grand Supercycle crash is proving to be an autumnal event consistent with the historical pattern of man's seasonal mood swings. Thus far our species' collective emotional breakdown is constrained to financial and economic affairs, but, if my Global Bipolar Hypothesis is accurate, the world could soon find itself embroiled in a severe military confrontation between East and West that could end in global thermonuclear war. Let's pray earnestly that this anticipated, horrific phase of the Grand Supercycle crash, which I've supernaturally foreseen, remains a long time off, but I'm still deeply concerned about the immediate future on this score.
What's important for everyone to realize is that history is unfolding in this catastrophic way because of man's failure to heed God's wisdom and warnings. Our species simply has not learned from its repeated mistake. Whether it be Judaism, Christianity, Islam, or almost any other of the great religions, man has been repeatedly told throughout history that God created us to do His will to love one another and seek peace and harmony. Rather than heed God's message, however, man has opted to go his own way, deny our Creator and be selfish beyond all reason. The inevitable consequence of this foolishness is the crash of human civilization thus fulfilling apocalyptic prophecies meant to dissuade us from our current collective insanity in the first place!
So how can this world be saved?
Might I suggest that everyone truly begin to abide by the American motto, In God We Trust (which erroneously appears on money!). Rather than denying God and living for ourselves....rather than struggling over possession of the world's limited resources and having blind faith in mammon and some imaginal 'Invisible Hand' to manage the world's affairs....let's place our trust in God and share His wealth. All mankind needs to accept that there truly is a God in heaven who created each and everyone of us, who loves us without bounds, and who requires that we obey the Golden Rule to love one another so that we don't end up completely destroying ourselves and the world we inhabit. Let there no longer be haves and have-nots, lest the Lord take everything away.
In order to facilitate our redemption, God has returned me to this ill-fated world to once again try and show humanity the way to His Kingdom. This is not a role I personally want, nor is this a task I feel I could ever make happen. But, given the potentially world-ending crisis we are in, I guess each one of us needs to radically step out of our comfort zones and try to do the right thing for God's sake as well as our own.
So be it...
Our Father, who art in heaven,
Hallowed be thy Name.
Thy kingdom come.
Thy will be done,
On earth as it is in heaven.
Ashes and diamonds,
foe and friend.
We were all equal,
in the End.