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With the Dow reaching above the 10,000 mark yesterday, there is a lot of stock market optimism going on. However, in July Enzio von Pfeil, the chief executive at EconomicClock.com said that there would be a crash this month in the stock market. He reiterated that yesterday saying that the crash doesn’t have to be a huge one that shakes the foundations of the financial system, but it will still happen.

He told CNBC, “There is going to be quite a bit of strong downward earnings revisions going forward, especially the outlook for 2010. And that is simply because the economic clock, of which we tell the economic time, suggests that the excess supply of goods is here to stay and you can’t keep on making profits if unemployment keeps rising.”

He said that the worst earnings would come from industries that are labor intense and others that are driven by consumer spending.

It always seems like everything that goes up has to go down, but there is no indication of how high that the market has to climb before it finds its top and it has to fall again. Most of the worst crashes that have happened usually happen around this time of the year. I don’t think that we’ll see a huge drop in the market like we did in the beginning part of this year, but I do think that the market won’t stay above 10,000 for long, but it will increase to this point again after the holidays.

No one wants to see a recession continue. No one wants to see people unemployed. These labor intensive jobs are so tight for money right now, that they have fired all the people that they can manage to get away with and still have a functioning factory.

Consumers still aren’t spending money like they did a couple of years ago.

These earnings reports will come out, but will they really be enough to send the market into another downward spiral?

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Jeremy

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