This indicator spells trouble for stocks

The blue line is the graph of the stock market. The red line is a proprietary financial risk indicator (FR). It is one of the several gauges we follow in The Peter Dag Portfolio to asses financial risk. Click on the chart to enlarge it.

FR was stable until the end of 2014 and the mode of the market was bullish.

FR started rising in 2015 and the market eventually crashed in August of that year.

FR stabilized and the equity market established a base and then rallied until November 2015.

FR resumed its rise toward the end of 2015 and stock crashed again in January 2016.

FR stabilized in mid January and the market soared again. It is still very strong thanks to the ECB aggressive easing.

The problem is FR has been rising since February 10. Will history repeat itself?

Stay updated with the next issues of The Peter Dag Portfolio.

You will encourage my timely update of this blog on the economy and financial markets by entering a subscription to The Peter Dag Portfolio.

Thank you for visiting this site.

George Dagnino, PhD
The Peter Dag Portfolio
Since 1977 
Author, Profiting in Bull and Bear Markets

Disclaimer. The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Subscribe now and learn "EASY WAYS TO BEAT THE MARKET WITH ETFs". Several portfolios back-tested from 2000 are shown in the subscribers' area on our website (www.peterdag.com) when you subscribe. Total returns, annualized returns, maximum losses during the period, and number of transactions are shown for each portfolio. The rules are easy to follow and you will find them in the appendix of each issue of The Peter Dag Portfolio. These portfolios are provided as a service to our subscribers.

No comments: