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Visual Proof That Markets Are at a Tipping Point

8 | By Shah Gilani

I’m not an alarmist.

The sky isn’t falling. But the same may not be true for stocks.

And I am concerned. To see what I’m talking about, just take a look at the charts below the break. Take a good look at each one.

See if you see anything in them. See if you can see what I see.

Then I’ll tell you what I see and what I’m afraid of…

Do You See What I See?


They’re all different market indexes. They all look the same. Don’t they?

And they’re not the only indexes that look this way – check out the Dow Jones Transportation Average and the PHLX Semiconductor Index as well.

Not only do they look the same, but they’re all pointing to the same place – a danger zone.

On every graph, on the right-hand side, after the big drop in October, you can draw a pretty straight line under the dips on the right from the middle of December to now.

What is that line? That’s “support.” Every one of those charts and most individual stock charts look like these indexes. They all have the same support line.

What’s the problem?

If they break that support line – if just enough of them break their support lines – they’re all going down.

The correlation is frightening.

That’s what I’m worried about.

A major market sell-off can happen. We’re at that point – we’re hanging on to support.

Then again, support can be support. And we could bounce higher and make new highs.

As I write this, as we head into the close today, after being down triple digits this morning, we’re now up triple digits.

So far, so good. Support levels are holding.

However, I’m more concerned about preserving my capital than risking it at this juncture.

Right about now would be a good time to check your stocks, to put down some stop-loss orders, if you don’t have them down already.

Now is the time where I like to put on trades that will make money if the markets fall.

We’re down with our stops in my trading services – Short-Side Fortunes and Capital Wave Forecast – and we’ve got on some neat positions that will make a ton if the markets do fall out of bed.

And if they bounce off support and head higher, we’ll get out of our downside plays, take off some of our hedges, and let our portfolios bask in the sunshine of a rising market.

But, like I said up top, the truth is that I am concerned.

That’s all. I told you I’d let you know if I became uneasy with how the market is acting.

I’m saying it now.

Editor’s Note: But it’s not all bad news – if you know how to play markets like this. Shah has put together a presentation that shows you how to extract exponential gains – time and time again – from some of the biggest, most secure companies on the planet. Look for it soon.

8 Responses to Visual Proof That Markets Are at a Tipping Point

  1. Robert in Vancouver says:

    If the market goes down I will be buying with both hands. I only buy stocks or ETF’s paying sustainable dividends that are high enough to cover inflation, tax, plus 3% for me.

    Very few such stocks in US stock markets, but lots of them in Canadian stock markets. And some of those earn all their profit outside of Canada, so there’s no exposure to the Canadian economy.

    So let the panic selling begin!

  2. BORRIES TERFLOTH says:

    I HAVE SEEN YOYRS AT LEAST 7 TIMES IN DIRECT VIEWIN IT PACTALLIY 49 TIME 7 X 7

    NOW I AM STARTINF TO FEAR THAT IS TOO OFTEN ESPECIALLY THAT SOME SHOWS ARE ON THE SAY DOWNTION OF YOR RECORDS WOULD BE SUPPORTIVE—— CONFIMIATION OF HOW MUCH DOWNDRAFT IS ACCEPTABLE BEFOR WE GET I A TIPPING IF ANY WOUD HELP POINT
    IN OUR ASSESSMENT
    THANKS FOR REMINDING US BHT

  3. jeff K. says:

    think you are right on! I am down at least 10% on all my majors, baba,msft,aapl,in fact the only one up is brk/b.How about I put stops at
    52 wk. lows on all which will translate into perhaps 25% losses, but I
    have never placed any options at any time??

  4. thida says:

    My country have many debt. Khmer people go to find a job at a broad. Other foreigner come work and live with freedom

  5. Lee Larson says:

    I foresee an increased deterioration of the average American’s standard of living. The resulting political and social unrest—-fueled by foreigners here and Americans intruding in other lands—-will no doubt have a disruptive effect on the market. The market itself typically runs on emotion rather than logic, and we may be facing turbulence over which no one will have any control until a ‘correction’ balances things out. It would be a mistake to assume out of hand that such a correction is just around the corner. We are now in a phase in which the strong will survive and the weak will die on the trail.

  6. Steve says:

    No I don’t see it. What I see with the S&P500 and NASDAQ Indices are volatile markets gradually forming higher lows and lower highs. Admittedly the highs are trending down at a greater rate that the lows are trending up.

    The volatility is good for traders but not necessarily for some others who like to sleep at night.

    Notwithstanding I see a volatile market looking to stabilise before going higher for most of 2015.

  7. Frank says:

    You might as well copy and paste one index on top of the other. They move together. This is nothing new.

    The U.S. stock market is topped out. The reward is gone and nothing but risk remains. If you want to play the game of speculation, have fun churning for pennies, but get ready to lose your shirt.

    Sell everything and short into the next B.S. rally, it will be the last for awhile.

    Dollar cash is king.

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