A Deep Stock Market Correction Looms If This Indicator Keeps Falling Apart

It’s time to rain on the parade of the market bulls.

With President Trump ratcheting up trade war rhetoric, emerging markets stocks tanking, tech stocks selling off and many investors questioning valuations after the surprise August rally, the market is starting to look a bit toppy. The daily global advance-decline line of 73 country indices is at risk to break down from a 2018 top, points out Bank of America Merrill Lynch.

The problem with that: every time it has happened in the past the market have entered a nasty correction.

“Prior tops for global breadth in 2015 and 2011 saw deep corrections for global and US equities, but the US equity market (S&P 500) beat the rest of the world (MSCI ACWI ex US) when global breadth was weak,” cautions BofA’s technical analyst Stephen Suttmeier.

Hardly reassuring. 

Respect the patterns.
Respect the patterns.

To be a profitable investor and build long-term wealth, you need the right information and techniques. Join TheStreet Oct. 13, 2018 for a special investing event for sophisticated and active traders. Register for “Invest Like the Pros: Jim Cramer’s Boot Camp for Investors” here.


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

*