Profit Confidential Warns: Two Indicators Suggest Stock Market Headed Towards a Continued Sell-Off

Profit Confidential explains that two tested indicators point to ongoing stock market volatility.

Profit Confidential Warns: Two Indicators Suggest Stock Market Headed Towards a Continued Sell-Off

New York, NY, United States - September 4, 2015 /MarketersMedia/

Profit Confidential (www.ProfitConfidential.com), an e-letter published by Lombardi Publishing Corporation, a 29-year-old consumer publisher that has served over one million customers in 141 countries, is weighing in on two major indicators that suggest the stock market will continue to experience significant volatility.

For years, the correlation between copper prices and the stock market has been a reliable, leading indicator of where stocks prices are headed. Copper is currently trading near $2.25 per pound and has been in decline since early 2011. Over the same period, the S&P 500 has been bullish.

“Whenever the correlation between copper prices and the stock market becomes negative, stocks subsequently sell off. This happened back in 2006 and 2007. This is when the top formed on the key stock indices. Subsequently, in 2008 and 2009, the stock market experienced a massive sell-off,” says economist and lead contributor Michael Lombardi. “From 2013 to 2015, the correlation has been negative. If history is any indicator, this spells big trouble for the stock market.”

According to Lombardi, another leading indicator that suggests the stock market is headed towards a continued sell-off is the number of companies trading around their respective 200-day moving average. When the stock price of a company trades above its 200-day moving average, it is considered to be in a long-term up-trend. If the stock price falls below this average, technical analysts consider it to be a bearish indicator.

“Since May of this year, the number of S&P 500 companies trading above their 200-day moving stock price average has plummeted. More than half of the companies on the S&P 500 are trading below their 200-day moving average,” Lombardi adds. “Remember the old investing adage ‘the trend is your friend until it’s broken?’ Well, it’s been broken.”

“The markets are poised for a broad market sell-off. Since 2009, investing in the stock market has been relatively easy. Investors didn’t do much besides ‘buy on the dips.’ And it worked. But it doesn’t anymore,” Lombardi concludes. “Today, far too many investors and stock market analysts remain bullish despite the quasi stock market crash we had last week. This type of complacency does not usually end well.”

Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation, visit www.lombardipublishing.com.

For more information about us, please visit http://www.profitconfidential.com/

Contact Info:
Name: Wendy Potter
Organization: Lombardi Publishing Corporation
Address: 350 5th Avenue, 59th Floor, New York, NY 10118
Phone: 905 856 2022

Source: http://marketersmedia.com/profit-confidential-warns-two-indicators-suggest-stock-market-headed-towards-a-continued-sell-off/90611

Release ID: 90611

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