The Stock Market Crash of 2011

First, read this blog post: The Stock Market Crash of 2011.

The author is predicting that, based on S&P 500 charts, the market will within the next week briefly drop below the lows of mid-March, then bounce back up about 3%, and then about July 5 the market will crash 20% through about August 15, at which point the Fed will panic and initiate QE3. I don't quite understand it, but it makes sense.

I prefer to look at the Dow Jones numbers as I find them easier to follow. Right now the Dow is at 12,000. The March low was just above 11,600 on March 16, actually 11,613. So if the Dow drops below 11,600 in the next 2 weeks, even briefly, then that is a signal that the crash is coming even if it doesn't start right away.

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On a related note, I find it interesting that at the same time that the Treasury doesn't need money, because of the debt ceiling, that the Fed has quit buying. The Treasury will need massive buying beginning August 1, when the debt ceiling will be raised. So QE3 will have to begin about mid-August to provide the funds, and some of this money will go back into the stock market.

So bottom line, sell all your stocks by the end of June before the crash begins.