New York, NY (PRWEB) September 05, 2012
In the Profit Confidential article, “Is the Volatility Index Warning Us About the Stock Market?,” Sasha Cekerevac points out a possible warning from the Volatility Index (VIX). He reports that, with the S&P 500 strengthening over the past few months, the VIX, a gauge of how much volatility there is in the market, is at an extremely low level, even though there are considerable risks in the market. Cekerevac argues that the VIX is warning of a possible stock market pullback.
“…periods of low volatility have been quickly met with violent moves down in the market,” says Cekerevac. “…when the market is at its most quiet, that’s when investors should be alert to the possibility of a pullback.”
According to the Profit Confidential contributor, many investors are pointing to world central bank activity.
“With more people believing…that central bankers will be adding monetary stimulus before the end of the year, they feel ‘safer’ investing in stocks…” says Cekerevac.
However, according to the Profit Confidential contributor, the real concern is what happens when the additional monetary stimulus is added.
“Having gone through so many rounds of monetary stimulus already, and with so little effect, the market might be worried that there won’t be any positive reaction,” notes Cekerevac.
With this in mind, Cekerevac warns of a possible “buy on the rumor, sell on the fact” reaction.
If this next round of monetary stimulus fails to kick-start the world economy, Cekerevac believes the market might see a very big selloff.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market... before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.