Buckle Up, It’s About to Get UGLY
As I keep emphasizing, the stock market is on VERY thin ice. This is no longer a garden variety stock market correction: the door has been opened to something MUC H worse.
First and foremost, the Russell 2000 is more closely aligned to the broader economy than the S&P 500 which is heavily weighted towards big tech. The Russell 200 has sliced through its bull market trendline and is back at 2022-2023 bear market levels.
You get a similar picture when you remove the influence of Big Tech from the S&P 500 with an equal weighted S&P 500 index. Here again, the bull market trendline is GONE and stocks hanging on to the ledge for dear life.
Again, this is a BROAD collapse, not a collapse limited to one particular sector. Overall breadth for the broadest market of all, the New York Stock Exchange, is right on the verge of its bull market trendline… and this is after going NOWHERE for the better part of six months. Once this line goes, look out below.
Finally, and worst of all is High Yield Credit. Thes bonds are extremely sensitive to macro changes. Stocks are more volatile and can whip saw this way and that depending on headlines, but when High Yield Credit makes a major move, you KNOW something BIG id brewing.
The High Yield Credit ETF has just taken out its bull market trendline. This is the canary in the coalmine for a credit crisis. And it’s starting to get sick.
Indeed, our proprietary Crash Trigger is now on red alert. This trigger went off before the 1987 Crash, the Tech Crash, and the 2008 Great Financial Crisis.
We detail this trigger, how it works, and what it’s saying about the market today in a Special Investment Report titled How to Predict a Crash.
Normally this report is only available to our paying clients, but in light of what’s happening in the markets today, we are making just 99 copies available to the general public.
To pick up one of the remaining copies…
Graham Summers, MBA
Chief Market Strategist
Phoenix Capital Research