How to Know If the Market Is Ready to Crash

A look at the market’s internals will show you… July 09, 2021 UNSUBSCRIBE | ARCHIVES How to Know If the Market Is Ready to Crash External Advertisement The Best Crypto Trading Strategy on Earth Most investors can’t capture 32 wins in a row in the stock market. Ian Dyer did in the first five months of beta testing in the crypto market, the most volatile new asset class on earth. Once you understand the full story, you’ll see why there’s still plenty of opportunities left. We’ve barely scratched the surface.  Click here for details. Dear Money & Crisis Reader, With the markets breaking down yesterday, many investors are asking, “are we due for greater losses.” For certain, stocks are extremely overstretched from historical norms. One of the most common ones is the 50-month moving average (MMA). As I noted last week, the market is trading nearly 40% above that MMA. And while stocks have traded at or near these levels several times before, they’ve only been significantly stretched above this level two times in the last 40 years. However, the fact stocks are extremely overextended by historical norms doesn’t mean they have to collapse anytime soon. In ALL the instances in which stocks were more extended than they are today, ensuing corrections took months to manifest. This time around will likely prove no different. Why? Nothing Can Save You From What’s Coming on July 14th... It looks like they got away with it… Biden and the mainstream media joined forces to “rig” the 2020 election against Trump... Now the greatest country on earth is being led by a cabal of corrupt leftists… And it couldn’t happen at a worse time… Because the renowned analyst and bestselling author who accurately predicted the subprime mortgage meltdown… the financial crisis of 2008… the Greek sovereign debt crisis… and Brexit… Just issued his latest prophecy… Those who haven’t prepared their loved ones for what he says is coming… will never forgive themselves. Click here for the details. Because the market’s internals are not committed to a collapse. A Look Under the Market’s Hood On a sector-by-sector basis, only half of the market’s weighting is in a downtrend. Because of this, we’re not likely to get a large collapse… but we’re also not likely to get a roaring rally either. Until this changes and the market becomes more lopsided in terms of uptrends or downtrends on a sector by sector basis, we’ll likely see a choppy consolidation period, or at best, a slow grind higher. This is particularly true when you consider what the tech sector is doing. If you revisit the table above, you’ll note that the S&P 500 is heavily skewed towards technology stocks. It is the largest sector in the index (27%). In fact, it is larger than the second and third largest sectors (healthcare and consumer discretionary) combined. With this in mind, as long as tech remains in an uptrend, it will be VERY difficult for the market to collapse. Here’s the chart of the sector from today. Until we see XLK drop below support at 144, or its 50-DMA at 140, it will be VERY difficult for the overall market to collapse in any significant way. Best Regards, Graham Summers Editor, Money & Crisis Amazon’s Richest CEO Snubs Congress After stepping down as CEO of Amazon, the world’s richest man refused to testify at a senate hearing on wealth inequality. It could be because his latest project has the potential to make him  — and thousands of American’s — even more wealthy. 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