Stock Market Crash 2015: The Dow Has Already Plummeted 2200 Points From The Peak

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Michael Snyder

(RINF) – Those that watched their stocks steadily increase in value for years are now seeing all of that “wealth” disappear at a staggering pace. The only way you actually make money in the stock market is if you get out in time, and many Americans are discovering that all or most of their gains have already been wiped out. At this point, the Dow Jones Industrial Average has dipped below where it was at the end of the 2013 calendar year. That means that nearly two years of gains have already been obliterated. On Friday, the Dow was down another 272 points, and it is now down more than 2200 points from the peak of the market back in May. For months, I have been detailing how things were setting up for this kind of financial crash in textbook fashion, and now events are playing out just as I warned. But this is just the beginning — what is coming next is going to shock the world.

We have already seen the 8th largest and 10th largest single day stock market crashes in all of U.S. history happen within the past few weeks. In fact, it was actually the very first time that we have ever seen the Dow fall by more than 500 points on consecutive trading days.

On August 25th, I warned that there would be some huge rebound days where we would see lots of “panic buying”, and on August 26th we witnessed the 3rd largest single day stock market increase in all of U.S. history.

Headlines all over America trumpeted the “fact” that the stock market had “recovered”, but the mainstream media failed to mention that the only two better days for the stock market were right in the middle of the stock market crash of 2008.

In this article, I explained that this is exactly the type of market behavior that we expect to see during a full-blown market meltdown. There are going to be even more violent swings in the market in the weeks ahead, but the general direction will be down.

Friday was definitely another down day. The following is how Zero Hedge summarized the carnage…

  • Dow Industrials lowest weekly close since April 2014
  • Dow Transports lowest weekly close since May 2014
  • S&P 500 lowest weekly close since Oct 2014’s Bullard lows
  • Nikkei dumped over 7% this week — worst week since April 2014
  • Utilities collapsed 5.1% this week — worst week since March 2009
  • Financials lowest weekly close since Oct 2014’s Bullard lows
  • Biotechs lowest weekly close since Feb 2015
  • Investment Grade Corporate Bond Spreads worst since June 2013
  • Treasury Curve (2s30s) flattened 6bps today — biggest drop in 2 weeks.
  • JPY strengthened 2.4% on week against the USD — strongest week since August 2013 (up 4.5% in 3 weeks) — major carry unwind!

I wish I could tell you that things are going to get better, but I can’t do that. There are some giant financial bubbles that are starting to unwind, and this process is going to take time to fully unfold.

And this is truly a global phenomenon. Chinese stocks have been crashing horribly, Japanese stocks just had their worst week in over a year, Canada and much of South America are plunging into recession, and Europe is probably in worse shape than everyone else if you look at the fundamentals.

Even though U.S. stocks have already fallen substantially, the truth is that they easily have much farther to fall. Yale economics professor Robert Shiller believes that we could actually soon see the Dow plunge all the way to 11,000

In what amounts to an ominous message for Wall Street, Robert Shiller, a Yale economics professor and author of Irrational Exuberance, doled out some serious bear talk this morning.

Shiller told CNBC Thursday morning that “this is a dangerous time” for the stock market.

Shiller, who has a reputation for calling market tops, warned that the Dow Jones industrial average, which closed Wednesday at 16,351, could fall as low as 11,000, a potential drop of more than 30% from current levels.

At the moment, the Dow is sitting just above 16,000, which is an exceedingly important psychological level.

If the Dow breaks below 16,000 and stays there for a few days, it is quite likely that full-blown panic will set in.

And once we see the Dow dip below 15,000, people will be going insane.

Another key indicator to watch is the VIX (the CBOE Volatility Index). If you are not familiar with the VIX, here is a pretty good definition from Investopedia

The ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market’s expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward looking and is calculated from both calls and puts. The VIX is a widely used measure of market risk and is often referred to as the “investor fear gauge.”

Right now it is sitting at 27.80. If the VIX rises above 40 and stays there, that will be a major red flag.

We have entered “the danger zone“, and events are going to start moving very rapidly now. If you have been listening to the warnings, you are going to understand why things are happening and you are going to know what to do.

Unfortunately, most people are going to have that “deer in the headlights” look because they will not understand what is happening and they will be frozen by fear.

Stay tuned to this website and to End Of The American Dream because things are about to get very weird and I will do my best to explain them as the coming weeks and months play out.

So what do you think the rest of September will bring?

Please feel free to join the discussion by posting a comment below…

  • Mick McNulty

    Inflated stock prices is where some of the inflation from printing money shows up. It shows up in the crazy price of gold, increased property prices, higher executive pay packages and bonuses and the price of executive toys like yachts and helicopters. Soon these things will not be able to absorb the inflation and it will pass into Main Street and onto prices which affect us all, like food and energy and purchase taxes.

    Those who said things are well because the stock market was rising just don’t get it.

  • DarkStarAz

    Price to earning ratio is at 16.9 and the historical average is 16.5 so were not that over the top. But yeah there will some profit taking and a pullback.

  • come-and-take-it

    The stock market is not an indicator of the health of the US economy. Corporations are global, my community is not. The vacant houses, storefronts and factories are the real indicator of economic health. When the corporation stock prices fall in America they will just vaporize the savings of investors too stupid to never have been there in the first place. The pension fund managers are all paid off now, the CEOs have their bonuses and golden parachutes, the bolt-holes are lined with silver. The out-sourcing is almost done, both of the jobs and corporate cronies. The facade of the American dream and the foundation on which it was built are no longer needed. For the many who remain when the lifeboats are gone the water will be very cold. No worries though. The corporations will be back when Americans will line up for jobs paying $6/day and a lunch (the current going wage in many out-sourced Mexican factories). Welcome to “Why didn’t I buy real stuff instead of paper in any form?”

  • hon788

    YEA LETS blame the Mexicans..
    leave them alone ya turd.

  • Robin

    Oh please the Stock Market itself has no real bearing on the actual economy anymore and has become nothing but an avenue for high class elitist gamblers who think betting on the ponies, playing the slots or the sports book is beneath them which is why I call Wall Street “Las Vegas on the Hudson”.

  • batsond

    According to 2012 World Bank data, the market value of all US publicly traded companies is about 18 Trillion (18,668,333,210,000).

    Imaging if the financial oligarchs can get all taxpayers out of stocks and into cash, the “harvest” will begin. That is, the transfer of 18 Trillion in stocks into the hands of the financial oligarchs, followed by the wiping out of 18 Trillion in debt money using a tried and true method called Hyperinflation.

  • Mick McNulty

    2200 points sloughed off a bubble isn’t much anyway. When it loses three times that perhaps it will begin to affect real underlying values. Like some rogue trying to sell an old car for twenty two hundred dollars, once you get him down to sixteen hundred you’re now closer to its real value.