The Reason Behind the Next Global Stock Market Crash

A global stock market crash could be coming soon… and no one’s talking about it.

So, let’s discuss.

This has been a week full of huge alarm bells sounding off in different parts of the market, and it’s got me concerned. Specifically, everything I’m seeing and hearing coming out of China has me on edge.

I’ve been watching China and its communist party for a while and have been paying attention to them ratcheting up their rhetoric against the West.

However, something changed for the country this year…

China made a huge pivot — which is incredibly interesting and something every self-respecting trader should pay attention to — and began cracking down on its own companies

Guys, this is something that could unravel worldwide assets… and a tale-tell sign that a global stock market crash is coming soon.

A Global Stock Market Crash Is Coming: Here’s Why

Taking a look at the five-year chart for iShares China Large-Cap ETF (NYSEArca: FXI), you’ll see that every time China sold off, the S&P 500 would follow.

You can really see this pattern emerge when Chinese stocks sold off during the beginning of COVID-19. At that moment, the S&P 500 was hitting historic all-time highs, but all that changed as multiple years of gains were wiped from the index.

When we look at what’s been going on in the stock market recently, things just aren’t adding up.

FXI has come off considerably from its $55 high — falling 20% since the beginning of 2021. Yet, the S&P 500 isn’t following suit like it has in the past. Instead, it’s making new highs.

And that’s concerning. 

The problem with this is that today’s movement is very similar to the movement we saw when the stock market crashed in 2008. You just have to look back 13 years on FXI’s chart.

Back then, the Chinese market crashed way before the S&P 500 even figured out something was wrong on Wall Street.

You see, since the early 2000s, China’s stock market has represented such a huge growth component of the world economy that it’s now a leading indicator of the U.S. markets’ health.

And things aren’t looking too good at the moment.

After diving deeper into this issue, I discovered something that could unravel every stock on the market

Check out my short video below to learn more about the possibility of a global stock market crash coming and what it means for your investments.

Also be sure to share your thoughts in the comments section below. 

And as always, send any trading questions to jeff@joyofthetrade.com and stay ahead of the markets, especially these choppy ones, by subscribing to our YouTube channel.

 stock market crash coming

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