The S&P 500 is still trading in dangerous territory.
Past News ReleasesRSS
New York, NY (PRWEB) November 16, 2012
In a recent Profit Confidential article, lead contributor and financial expert Michael Lombardi reports that on November 7, the S&P 500 fell below 1,400, its major support. Lombardi also reports that the Chicago Board Options Exchange Volatility Index, a measure of the volatility of the S&P 500, is showing extremely bearish sentiment toward the S&P 500, recently breaking to the upside after trading in a downtrend. According to Lombardi, all of this suggests that risk in the S&P 500 is piling up quickly, signaling an end to the current stock market rally in the near future.
“The S&P 500 is still trading in dangerous territory,” states Lombardi. “Looking at it from a technical analysis point of view…there is a lot of bullish sentiment on the chart.”
Lombardi notes that since this past June, the S&P 500 traded higher and higher, continuing to buck the trend to the upside. He adds that recently, the S&P 500 broke its uptrend, moved below its 50-day moving average (MA), and made lower highs.
The Profit Confidential expert states there is more downside now since the S&P 500 fell below its major support.
In the article “Why I Believe the S&P 500 Rally Since March of 2009 Has Been a Fake,” Lombardi notes that looking beyond technical analysis, so far, 350 companies of the S&P 500 index have reported their third-quarter earnings.
“Only 40% of the companies reported sales above the estimates,” reports Lombardi. “At the end of earnings season, if the ratio of S&P 500 companies reporting sales above the estimates stays the same, it will mark the worst quarter for revenue growth for the S&P 500 companies since the first quarter of 2009.” (Source: FactSet, November 2, 2012.)
Lombardi also reports that, so far, 56 companies have provided negative guidance compared to only 18 with positive guidance.
The Profit Confidential expert concludes that the current stock market rally since March of 2009 has been built on the Federal Reserve increasing the money supply, the government borrowing like mad, and interest rates being set at record lows.
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.