On the heels of some wild trading in global markets, Tom McClellan just issued this major warning to investors.
CAUTION: Market Movements Have Reached Extremes
August 8 (King World News) – Tom McClellan: “The stock and T-Bond prices often move in opposite directions, and in August 2019 that movement has reached a pretty extreme degree. The basis for that statement comes from the indicator in this week’s chart, which comes about through some fairly simple math.
I calculate a 10 trading day rate-of-change (ROC) for both the SP500 Index and for near-month T-Bond futures prices. Then I find the difference between those two, expressed in percentage points. It is a very short lookback period, not intended to represent “investment” returns, but rather to capture extreme movements which may have interpretational insights about the two markets.
The current deeply negative reading is officially low, and in small company in terms of past extreme readings. All of the similarly extreme negative readings have been associated with important lows for the stock market. (See below).
WARNING: Financial Markets Reaching Extremes
Interestingly, the very high readings do not have the same meaning. Seeing a reading up around 8 percentage points or higher for this spread indicator typically marks the initiation point of a strong new uptrend, as opposed to an overbought top. This has been one of the most important points I have learned as a stock market analyst: Up and Down do not behave the same in the stock market. They may in other markets, but for stocks the highest upward momentum is typically seen at the start of an advance, while the highest downward momentum typically marks the bottoms for stock prices.
One additional point worth noting: The day with the biggest negative reading for this spread indicator is not necessarily the final bottom day for stock prices. The prior extreme low reading came on Dec. 18, 2018, which was 4 trading days ahead of the lowest closing low for the SP500 on Dec. 24, 2018. So while we are getting a message that an important price low is forming now, it does not have to be here yet.”
KWN will be releasing many articles today…For now
Beware Of Crazy Financial Markets
READ THIS NEXT! CAUTION: This Is How Crazy Financial Markets Have Become CLICK HERE TO READ
More articles to follow…
In the meantime, other important releases…
UNBELIEVABLE: Reckless Central Bankers Pushing The World Toward Gold, A Silver Lining, Plus One Heck Of A Collapse CLICK HERE TO READ
GOLD BREAKS $1,500: Albert Edwards Just Warned What The Next Phase Of The Global “Ice Age” Will Look Like CLICK HERE TO READ
Gold Surges $30 And Silver Is Soaring More Than 4% But Look At What Is Getting Scary CLICK HERE TO READ
Kyle Bass – It’s A MASSIVE “Can’t Pay,” Plus Expect This To Propel Gold Even Higher And One Of The Reasons Gold Is At 6 Year Highs CLICK HERE TO READ
The KWN audio interview with Egon von Greyerz has been released and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
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