Next Year Stocks Could Tank (or Sooner)

The 500 pound gorillas in the room are the impending U.S. 'Fiscal Cliff' and the creditors waiting to downgrade the United States.  These gorillas are more powerful than Cornelius, Dr. Zaius and company.  Remember what happened last year when the S&P downgraded the U.S.?  The market fell off a cliff and crushed our equities and 401(k)'s.  Bullshit.

Recall when we had our worst day of in August of 2011 since the fall of Lehman Brothers during the 2008 financial crisis.  The S&P downgraded the U.S., we lost our coveted AAA credit rating.  It was the first for our country.  All three major U.S. stock indexes sank between 5% and 7%, pushing the Dow below 11,000.   Stocks tanked around 15% in the two weeks leading up to the downgrade as fear was in the trading air.  The threat alone of an impending downgrade wiped out billions from our portfolios.

Fellow Masters if Moody's or S&P throws the U.S. under the bus with a downgrade expect the worse.  We really hate reading shit like this and we hope the 2012 election gives the market some reassurance we won't fall of the 'Fiscal Cliff'.  Godspeed to us all.  If anything, its a moment to pause and look your portfolio and think about adding some stop losses and hedges.  Review Gold and Silver are the Perfect Hedge for some trading ideas.

The Epic Chart from Aug 8th 2011: