New York, NY, June 14, 2016 – Profit Confidential (www.ProfitConfidential.com) an e-letter of Lombardi Publishing Corporation, a 30-year-old consumer publisher that has served over one million customers in 141 countries, is announcing that three key technical indicators point to the Dow Jones Industrial Average (DJIA) dropping more than 50%.
“The Dow Jones Industrial Average is soaring after a rough start to the year. Is it time for investors on the sidelines to step back in? Don’t be too quick to judge, because risks of a major stock market crash in 2016 still remain,” says financial analyst, Moe Zulfiqar. “There are three indicators that every investor should follow very closely, as they suggest a stock market crash could be ahead and it could happen much sooner than many anticipate.”
Zulfiqar explains that the first stock market indicator investors should pay attention to is the amount of money being bet against the key stock indices, as illustrated by the Total Assets Rydex Bear Index Funds. Between 2012 and late 2014, as the key stock indices were moving higher, bets against the stock market were declining; then, at the start of 2015, bets against the stock market started to increase. However, since then, the DJIA has been flat. This means buyers are not able to take stocks higher and impatient buyers will turn into sellers. When this happens, the DJIA could crash.
The second indicator that has a history of predicting stock market crashes is the Money Flow Index (MFI). At the very core, this indicator looks at volume, prices, and relative strength on the stock market. In the later part of 2007 the MFI started to drop, which happened at the same time the DJIA developed a top. Shortly thereafter, the stock market plunged and the DJIA shed more than 50% in value. Today, the DJIA is following a similar trajectory and struggling to cross above 18,000, which suggests another top is forming.
“Lastly, it’s important to pay attention to investor sentiment, as illustrated through the Chicago Board Options Exchange (CBOE) Volatility Index (VIX), often referred to as the “Fear Index.” The Fear Index says investors are outright complacent, with said complacency being near the same level as it was back in 2007, just before the markets crashed,” Zulfiqar concludes. “Stock markets have made a solid run to the upside since 2009, but these three indicators suggest the outlook for the rest of 2016 and the next few years is bleak.”
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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.