Note: This document is too lengthy so it is split into two parts as of 9/23/11. To review how the August crash was forecasted this year by Keystone on a technical basis as well as the chronology and timeline for the key market events up thru September, simply type “2011 crash 9-23-11” into the search box and it will come right up. This document now continues forward from 9/23/11.
Stock Market Crash 2011 Timeline and Chronology:
Keystone chronicles the broad markets topping and rolling over during 2011, leading into the July-August-September-October 2011 crash. The charts and technical’s accurately forecasted the move all year long.
Keystone’s proprietary algorithm, Keybot the Quant, that trades the indexes long-short, using the SPX as a benchmark index, went short on 7/11/11 at SPX 1324 and covered on 8/23/11 at SPX 1146, a 178 handle gain in six weeks time, or 13.4%. The actual trade in SDS gained 25.6%. On 8/23/11, Keybot flips to the long side simultaneously at SPX 1146.
On 9/1/11, Keybot exits the long position at SPX 1207, a 61 handle gain in 8 trading days, or 5.3%. The actual trade in SSO gained 12.1%. On 9/1/11, Keybot flips to the short side simultaneously at SPX 1207.
On 9/8/11, as the indexes compress into a tighter band, Keybot flips to the long side at SPX 1200, a 7 handle gain, but a whipsaw occurs during the session as Chairman Bernanke tanks the markets and Keybot flips back to the short side at SPX 1186 taking a 14 handle loss.
On 9/14/11, on the happy Sarkozy-Merkel-Papandreou conference call euphoria, Keybot exits the short side at SPX 1180 for a 6 handle gain. Keybot flips to the long side simultaneously at SPX 1180.
On 9/22/11, at the open, Keybot exits the long side at SPX 1150 for a 30 handle loss, or 2.5%. Keybot flips to the short side simultaneously at SPX 1150.
On 9/26/11, Keybot closes the short side at SPX 1148 and flips to the long side.
On 9/29/11, Keybot closes the long side at SPX 1146 and flips to the short side.
On 10/6/11, Keybot closes the short side at SPX 1146 and flips to the long side.
Timeline and Chronology of Market Events Leading to the July August September October 2011 Stock Market Crash:
August 2010 thru September 2011 is described in the “2011 crash 9-23-11” document.
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On 9/25/11, Sunday, G-20 leaders promise action on the European problem before the 11/3/11 meeting in Cannes. The futures are up significantly.
On 9/26/11, Monday, Asia sells off strongly overnight and the futures tumble lower. By the open, however, the markets are moving upwards. Lots of mixed messages coming out of Europe, first the ECB is contemplating rate cuts at the next meeting but then another official dispels that statement. A CNBC news correspondent reports that the EFSF facility will be expanded and well-funded and a solution to the Euro problems is close at hand. The markets shoot upwards like a rocket. The SPX finishes up 27 points, or 2.3%. The Dow Industrials finish up 272 points, or 2.5%.
On 9/26/11, Keybot the Quant algorithm flips to the long side at 11:41 AM EST at SPX 1148. The trade from 9/22/11 is flat. Markets remain highly volatile.
On 9/27/11, Tuesday, Asia markets moves higher on the positive Euro news. Germany’s Merkel takes a more conciliatory stance with Greece stating that they will offer all aid possible. The futures as well as gold and silver are up large on the happy Euro talk as well as EOQ3 window dressing. The Dow Industrials moved up and over 300 points at midday. Major indexes were up huge between 2% and 3%. In the afternoon, the Eurozone members said they want to restructure the Greece bailout terms. Markets immediately started selling off the final hour of trading. The major indexes salvaged about a 1% up day. Gold recovered 4% today.
On 9/28/11, Wednesday, optimism on a Euro solution is fading ahead of the German vote overnight tonight that decides on the funding the EFSF and holds the balance of the markets in its hands. The major indexes finished about 2% lower across the board with the early week euphoria fading away.
On 9/29/11, Thursday, Germany votes in support of the EFSF so the futures move up. The markets start the day up large on better-than-expected GDP and Claims data. Copper, however, continues to collapse, now printing 3.25, a 13-month low. Markets sell off as the day proceeds but then take a large spike upwards in the final minutes. The Dow Industrials cover over a 6% range today, up big, down big, then up big, due to the high volatility (VIX).
On 9/29/11, Keybot the Quant algorithm flips back to the short side at 2:10 PM at SPX 1146. The trade from 9/26/11 is flat. Markets remain highly volatile.
On 9/30/11, Friday, IR cuts sales and profit forecasts. IR is a global bellwether stock, with 40% of its business overseas, a very good proxy for the status of the global economy, and the news is not pretty. The CRB Commodities Index dropped under 300, the first time since November 2010, forecasting the coming deflation. The dollar continues to strengthen. The Eurozone leaders continue to discuss ways, such as using leverage, to increase the EFSF’s available funds to deal with Italy and Spain. Germany’s Finance Minister Schaeuble says using leverage to increase the EFSF is out of the question since that will destroy Germany’s AAA credit rating. Today is the last session in September, the EOM (end of the month) and EOQ3 (end of the third quarter for 2011; Jul-Aug-Sept). The SPX benchmark index fell 14.3% in Q3, the worst quarterly performance since 2008. NYSE announced the circuit breaker levels for the Dow Industrials for Q4 with a first stage halt occurring at a drop of 1100 points, second halt level at a drop of 2250 points and third halt level at a drop of 3350 points, where the exchange would close for the remainder of the day. After the bell, ACI lowers its coal business estimates which will affect the rails as well.
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On 10/2/11, Sunday, the “Occupy Wall Street” protest is now in its 16th day with over 700 people arrested thus far. The group is protesting the growing split between the rich and the poor, the haves and the have-nots, especially in light of the financials and banks causing the housing mess creating three years of suffering thus far. BAC announces a $5 surcharge fee on depositors.
On 10/3/11, Monday, the anecdotal data out of China becomes more worrisome, Chinese factories are going bankrupt. BAC web site slows then shuts down at the noon hour as unhappy depositor’s voice their dislike over the new fees. MS credit default swaps indicate a 35% chance of failure due to their European exposure and the stock sells off 8%. The financials are leading the broad markets lower. The 10-year to 30-year spread drops under 100 basis points, just like summer 2010. WTIC Oil is under $80 and Brent is testing $100. GS drops under 90 just before the close. Gold gains about 40 on the Euro woes. Stocks tumble into the close with the SPX ending down 32 points, or 2.9%. The S&P is now down 19.4% on the verge of confirming a bear market which is generally accepted at a 20% loss. Dow Industrials fall 258 points, or 2.4%.
On 10/4/11, Tuesday, Kospi (Korea) Index tumbles about 8% overnight. Moody warns Dexia, a Franco-Belgium bank stock, of a coming downgrade, prompting France and Belgium to step in stating they will support the bank; shares tumble 25%. Deutshe Bank drops 7% stating it will not meet its profit goals. Moody’s downgrades State Bank of India. The financials around the world are selling off. Greece can now survive until November, not mid-October as originally thought, providing Troika more time to find solutions. GS lowers copper and oil estimates for 2012. GS cuts China’s growth forecasts for 2012. S&P cuts Europe’s growth forecasts for 2012 and indicates a double-dip recession is likely. Copper loses the 3.00 level. Chairman Bernanke gives his testimony and states that the recovery will be weak. The markets sell off at the open. The SPX falls under the 1090 level indicating over a 20% drop from the April top which triggers the technical level of an official bear market.
On 10/4/11, Euro Finance Ministers say they will recapitalize the banks with a coordinated effort. The markets jump on the news and run upwards into the close. The SPX ends the day up recovering from down 20 points, pulling back from the negative 20% bear market level.
On 10/4/11, after the close, Moody’s announces a downgrade of Italy’s debt. Europe announces the formation of a bad bank for Dexia.
On 10/5/11, Wednesday, markets continue along with a recovery rally on optimism that the Eurozone can get its act together.
On 10/5/11, in the evening, Moody’s downgrades the Italian banks. Apple’s Steve Jobs, 56, loses his long battle with cancer. Strikes and protests in Greece ramp up again. The Wall Street protests also grow in size and other protests pop up in major U.S. cities.
On 10/6/11, Thursday, the ECB leaves rates unchanged, no surprise considering it is Trichet’s last meeting. Markets continue a three day short-covering rally.
On 10/6/11, Keybot the Quant algorithm flips back to the long side at 10:21 AM at SPX 1146. The trade from 9/29/11 is flat. Markets remain highly volatile.
On 10/7/11, Friday, Moody’s downgrades 12 U.K. banks. The CRB moves above 300 and the 10-year yield moves over 2% lessening the current deflation risk only slightly. The monthly Jobs Report is better than expected and the market’s rally. Fitch downgrades Italy and Spain debt so the markets sell off on the news.
On 10/7/11, after the close, Moody’s places Belgium’s debt on review for potential downgrade.
………………………the saga continues…………..
On 10/9/11, on the weekend, a Greece default and plan should be released one of these weekends. The Dexia situation requires further resolution. Eurozone problems continue. Global recovery is stalling. China bubble popping. Copper and commodities dropping indicating oncoming deflation.
On 10/10/11, Sarkozy and Merkel meet but schedules are in constant flux.
On 10/11/11, AA kicks off Q3 earnings season and will miss earnings.
On 11/2/11, FOMC meeting.
On 11/23/11, the Deficit Commission deadline looms.
On 12/13/11, FOMC meeting.
On 12/23/11, Congress will conduct the debt vote. Merry Christmas.
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