The Market is Sending Numerous Red Flags for Stocks

Stocks are on the edge of a cliff.

As you can see, the S&P 500 has failed to breakout to the upside and is now sitting on support. If we take out 1650 we could easily to for 1600 in short order. And if we do indeed break down through the rising wedge pattern (indicating that the move to the record highs was a false breakout) we could see a drop down to the mid 1400s.

Other asset classes are already predicting this. Check out the divergence between high yield bonds and the S&P 500:

The same is true of emerging markets which have lead stocks in the post-2009 period.

Investors take note, the market has numeous red flags for stocks. If you're not prepared for a correction, now is the time to do so. 

For insights on how to prepage for when stocks drop, visit us at:

http://gainspainscapital.com/protect-your-portfolio/

Best Regards,

Graham Summers

Comments

[MeelionDollerBogus]

Like WTC 1,2,7 this set of S&P, Dow and NASDAQ will come down on time as planned and not a minute sooner - http://flic.kr/p/enJ7Cs

[Tenshin Headache]

You can't look at just price like that and draw any conclusions, not with the rampant expansion of the Fed balance sheet that we are experiencing. But if you do ... so far i see higher highs and higher lows.

[max2205]

I will onlh short the market when Graham goes bullish....oh wait....

[El Hosel]

"The Market" yeah! Those are the same red flags that showed up at SPY 900 and QE2.

[diogeneslaertius]

rice, buckshot, and silver

i am always well prepaged