Since the beginning of April, the S&P 500 has been setting higher highs and higher lows. In fact, it just broke out above a key resistance level it set back in March.
But the question traders and investors should be asking themselves is could this be a false up-side breakout or will new highs be reached?
Remember, just a few months ago in February, the markets had a severe and sudden plunge. Investors and money managers were too surprised to take any action.
They just sat there looking at their screens in amazement while the indices made severe intraday moves, up and down, as investors tried to determine what was causing the volatility.
On February 2, the computers of the algo-trading firms had taken over, causing moves that made no real sense. The following Monday, February 5, the DJI plunged from a loss of 900 points to a loss of 1600 points in virtually minutes, closing
Once again this week the markets plunged on a Friday, this time seeing the Dow plummet 767 points intraday.
Amid all the geopolitical risk and tariff threats, the investment markets are experiencing volatility many experienced and seasoned investors have never seen.
When analyzing the price/volume trends, we see incredibly important signals in our technicals that suggest perhaps the bull market could be running out of steam and we may have already seen the highs of the year.
The markets are now experiencing volatility that we haven’t seen in quite some time. Just last week the Dow lost over 1400 points! Then, this past Monday, it soared 669 points, the third biggest point gain on the Dow ever and its biggest point gain since 2008.
However, on Tuesday, the markets sold off once again as the Dow plummeted triple digits for the third time in four days.
The world’s financial markets are getting very challenging. Currently, there is a big debate whether the markets are destined for a 1929 type of crash or if the bull market will continue for several more years.
My firm and I have a very specific opinion, something no analyst in the media has mentioned. You see, I started my firm in January 1977. In 1978 I made the forecast that seemed ‘outlandish’ to Wall Street analysts. But they came true over the next 1-2 years.
February saw a severe and sudden market plunge. Investors and money managers were too surprised to take any action. They just sat there looking at their screens in amazement while the indices made severe intraday moves, up and down, as investors tried to determine what was causing the volatility.
Read this message carefully. It may help you identify the next big turn in the markets.
As our dedicated readers know well, we predicted major global stock market declines since early 2015. Our analysis showed the big selling being done by Wall Street, even while their analysts told investors that all was great.
As it turned out, there was no big “year-end rally” last December. In fact, we entered 2016 the same way we ended 2015: severe plunges in the major indices.
The Junk Bond Bubble Bursts…
This is Just the Beginning!
The ever important Junk Bond market is giving us key signals right now! Could this be the next crisis to take over the markets? Check out at the chart below.
Currently, 15.7% of all junk bonds are classified as “distressed.” That the highest since 2012. We predict that soon it will be the highest since the global crisis of 2008-2009.
Junk bonds have plunged since 2013, while the S&P continued to make new highs.
The start of the year has been one of the worst ever for the stock market. The bulls have been shaken, but they haven’t given up pounding the tables with their bullish message. We haven’t even seen concern break out, much less bearishness. Such lack of concern and fear in an environment of great excesses is always a flashing yellow light for me.
I look at the technical aspects of the markets, which include ‘sentiment’ and measures of money flow and exposure. Here are 15 warning signals I see for investors in 2015:
