Will the Fed Buy the Whole Stock Market?

There are two reasons why I ask that question. First, as you will see from the comments below, Dr. Robert McHugh posed that question over the past couple of days because he suggests that if the S&P 500 rises above 2020, “we are about to one of the greatest stock market crashes in the history of the stock market. It means wave (3) down is next and that would be at least 400 points in the S&P 500, possibly 600 points, and more than 3,500 points in the Dow Industrials.

Secondly, while the U.S. has the reputation of being a free market capitalist country, a reading of the exceptionally well-documented book, The Gods of Money, by F. William Engdahl reveals that from the very start of the American Republic, an evil group of banking elites starting with the powerful Rothschild City of London Banking family have succeeded, by 2015, at all but destroying our country. From the very start, this group of powerful elite have established and with fits and starts have now not only succeeded in owning our central bank, but also basically owning all of the institutions of control in our society. Certainly, the bailouts of 2008-09 are the bitter fruits of the constant history of this elite battling for control of our monetary system. They now not only own our banking system, but also our government and virtually all of the institutions of education, media, and even what is left of our religious institutions. The Godless Hitler did it with violence. The ruling elite who own our banking establishment have done it, posed as the wolf dressed in sheep’s clothing.

And so Dr. McHugh postulates about the massive decline that lies ahead, and he stated this past week that the Fed may end up buying the entire stock market. He said that in the context of his post-closing-market remarks on Thursday, October 9.

SP500“In terms of the Elliott Wave analysis, what the above is saying is that if this rise from August 24th is (2) up of {i} down, as we believe, then it is one large [a]-up, [b]-down, [c]-up 3-3-5 Flat pattern from August 24th, and means stocks are very close to finishing wave [c]-up. The S&P 500 could rise another 15 points or so Friday October 9th, or Monday October 12th, but should then top. Then kaboom! Perhaps wave (3) down starts out slow, it will have five subwaves, so will be stairstep with corrective rallies, however at some point there most likely would be a crash. In other words, the entire decline for (3) down will not be orderly. Part of it might be. However, panic selling will show up somewhere along its journey south. Again, if this analysis is correct.

“If this is the case, then it means we are about to see a massive stock market decline. If wave (3) down of {i} down is next, that could be a 400 point decline in the S&P 500, possibly 600 points, and possibly 3,500 points in the Industrials, possibly 4,500 points. Given the speed the mini-crash portion of wave (1) down had, which was very fast, I would expect that this coming wave (3) down plunge could also have a dramatic crash phase in it that is rapid. In other words, a large chunk of this decline could occur in a few weeks, although the entire wave (3) move could take several weeks as some portions of it could be more orderly. It would impl y something terrifying is about to happen to trigger the worst part of (3) down, perhaps sometime over the next six weeks. See charts on page 22(shown above) for this scenario. No guarantees, but I do not see any other high probability scenarios at this point with a more benign outcome. Perhaps some milder scenario could surface as time passes, but I don’t see it tonight.

“Caution: I would not bet the farm on a Crash. Crashes are rare and maybe the pattern will morph into something we presently do not see that is less ominous. Risk must be managed. Maybe the Fed buys the entire stock market, who knows, given their track record.

“As for timing, we have a Bradley model turn date scheduled for tomorrow Friday October 9th +/- a few days, so that is looking like a top. There is a phi mate and Bradley model turn date in mid-November so that could be a bottom for either {i} down or (3) down of {i} down.”

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.