Loading ...Summary:
- Dual Head-and-Shoulders patterns warn of a potentially big downside move and new highs may be a trap for bulls
- Valuation levels suggest the broader US stock market is lagging
- Precious metals continue to warn of risks
- The market “melt-up” may be nearing an end
My research team is issuing a Special Alert Warning after the NASDAQ and SPY reached new all-time highs. Our research team identified a massive Head-and-Shoulders pattern (highlighted in BLUE) that originated in 2014, set up a “head” in 2018, and is now forming a “right shoulder” spanning 2019 and 2020. Additionally, a minor Head-and-Shoulders pattern is setting up on the right side of the chart below (highlighted in MAGENTA) that peaks in early February 2020 – just before the COVID-19 price collapse. Will this dual Head-and-Shoulders pattern prompt a massive downside price move over the next few weeks and months, or will the US stock market continue to rally higher – breaking the resistance level the shorter-term “head” (near $174) and keep going?
Even though the NASDAQ and the SPY reached new all-time highs today, we’ve been warning that the US stock market is currently riding a wave of speculation and rising multiples that does not support the organic growth models our researchers use to track price activity and trends. Our Custom Smart Cash Index highlighted a peak in the US and global markets that took place in February 2018. This peak price level represents a true organic growth peak for the global stock market. After that peak, price levels on our Custom Smart Cash Index began to decline even though the global central banks and US Fed started printing capital to support trade issues, failing global economies, and the COVID-19 virus event. My researchers believe the true peak in organic global economic opportunity and growth peaked in February 2018 and the current peak price levels are driven by “pure speculation”. cc