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Will The Stock Market Crash In 2017?

One question top of mind of many readers is whether the stock market will crash in 2017, after a gigantic 7 year bull market.

Though the “7 bear bull market” argument is definitely a valid one to take into account, it is not per se a condition. A long bull market can also get longer, and we do not know at this point whether we will see a “mania phase” first.

Another argument was posted on Forbes Will There Be A Financial Crisis in 2017 in which the author argues that there has been a financial crisis in the seventh year in three of the last four decades: 1987, 1997, 2007. There again, we do not consider this a convincing argument.

We remained convinced that a stock market crash in 2017 would have brought warning signs in 2016. We do not see that. Our recommendation is to remain focused on what prices are doing. Price analysis lead us to the following conclusion which we explained in detail in our July analysis S&P 500 Suggests Much Higher Prices Coming In 2016 And 2017:

The fact of the matter is that U.S. stock markets are trending higher, and will trade much higher in 2016 and 2017. We could find this counterintuitive, but that’s not important. It is an opinion which falls in the category “noise”. The charts are fact based, and that is the only thing that matters.

Our chart does not suggest a stock market crash in 2017

We stay focused on ongoing price action in the stock market’s chart. We do NOT see signs of a stock market collapse in 2017. If anything, the retracement in September tested the 2016 breakout level, which we consider an incredibly bullish sign.

In other words, the stock market collapse story could work well as a “story” to sell page views, but it is not a serious thesis when looking at a chart.

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  • RB

    Um, no distressing signs in 2016? Hogwash! Look at consumer debt and consumption driven by credit (is credit really consumption before it is paid? ) and consumer products are sold at a loss.
    Cars sold at prices 20 years old, TVs sold at a massive loss, cars sold at a massive loss, ALL wearable consumer products sold at a loss, and clothing sold at a loss. Let me see…manufacturing down, yet , prices falling off a cliff…O-yeah, “earning” What are “earnings”? Earnings are manipulated income numbers based on manipulated sales and switching assets VS liabilities. I want to see profit/loss only. Deep recession is coming and all markets are gonna crash hard

  • Jim

    I agree. Will we ever learn from our mistakes? Or is it really a mistake because what goes up must and shall come down. It’s only a matter of time.

  • Gary

    I hope that stock market does collapse and this nation will learn a lesson because I think that this country is very greedy for money and wealth that is do not buy happiness it buy sorrow instead.

  • We’ve setup a market crash poll: http://www.marketlongrun.com/sp-500-poll/
    Cast your vote!

  • Douglas Odom

    So, Even though market is over 25% overvalued by huge majority of economy related review of the entire worlds rating, they think we go to 50% overvalued? I am sidelined waiting for value. Are you giving someone $300000 for their $200000 house. Same thing. Door is very small for millions of exiting investors. Smart money is on sidelines with cash!

  • Douglas Odom

    I am not a gold bug but do think will go to $1400- $1500 an ounce in 2017 because flight of capital is coming from Europe, Japan, and even China. Overbought securities will put a large percent in metals. Way too much money for market to handle as 200% over value is the supercrash predicted, and think these investors are smarter than that.

  • Douglas Odom

    I have sold all of my stocks and now only hold options in gold and silver mining, EUO short, and DUG short with highest pct. with July option call. Long term retail bull harvest soon, as stocks will absolutely plunge at least 20% to our gain if we bet on the right side, DOWN. The main indicator is tax collection is way down so economy is way less than predicted.And continuing downtrend. No more left to borrow and Washington gridlock on reform. Retiree’s and boomers with 65% of the wealth will not spend, instead hoard. No money velocity.Dead. Less to spend with more obligation extracting more from economy.

    • Pico

      Thx dale Davidson, v. original

      • Douglas Odom

        Yes, Davidson has influence with me as do many others brilliant economist do, such as as Rickards and Edelson with similar, but different outcomes.i.e. Edelson thinks gold is going to $750. I would rather digest their Cliff notes than try to learn what they have. And I have decided gold will go to over $2000 before plunge because money will seek safe refuge as dominoes fall. Believe what you like. I do not run on 1 naked opinion, and do not have knowledge to make any conclusions on my own. If you have original, vent it.

      • Douglas Odom

        And I throw in David Stockman also. I always appreciate brilliant minds and form my opinions on the logical from many sources. And then hope I am correct, without waffling with my investment decisions.

  • Douglas Odom

    Buy and brag about your 7% gain in a few days right before everything crashes and your sell order will not be executed except below stop it happens so fast. Been there. The value of your holding decreases so fast that your stop loss is passed before execution. Listen to this advice NOT. CASH and buy at bottom after decline will multiply your money many times. Buy and hold has not worked unless you want to maybe have more worth less dollars after years. The absolute best mistake is to be all cash and buy at discount. Or worst, be all in for last little and lose huge.

  • “…a stock market crash in 2017 would have brought warning signs in 2016”

    There were plenty of signs, if one knew where to look. Look at the gigantic bubble in the housing market for example. Many areas of the economy are in an inflated, unsustainable bubble.

    It is beyond time for a crash. The market needs to re-correct itself.

  • Yeaaahhhh

    I sold all my mutual funds and stocks and put them in a money market today. I will wait it out. I just feel something bad will happen

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