Pervasive Death Crosses Are U.S. Stock Market Sell Signals (+2K Views)

…Those who are ignorant of financial history are doomed again to suffer its dreadful and costly consequences…and today’s death crosses…[as seen] in 7 major U.S. stock market indices…are stock market sell signals. Words: 303

An article by I.M. Vronsky (Gold-Eagle.com) presented here in a slightly edited & abridged format to provide a faster and easier read.

The following charts of the 7 major stock market indices show the 2008 and current death crosses as noted by the yellow arrows . The former heralded the protracted bear market of 2007-8 when the bubble burst and stocks crashed -50%.

1. S&P500 Index

http://tinyurl.com/hvu7qlv

2. Dow Jones Index

http://tinyurl.com/jg7h4y3

3. Russell 2000 Index

http://tinyurl.com/jlhub9o

4. Wilshire 5000 Index

http://tinyurl.com/h3xhght

5. Transportation Index

http://tinyurl.com/je6e7hm

6. NYSE Index

http://tinyurl.com/zh3zstz

7. NASDAQ Composite Index (As of 05/20/16 Death Cross still not consummated but soon will be.)

http://tinyurl.com/hyubuoz

Stock Market Forecast For Currently Developing Bear Market

We make the assumption that US stocks will be hammered down an average of the two previous bear markets (2000-2001 and 2007-2008) subsequent to their death cross sell signals. During those periods, the S&P500 fell about –44% in the first bear market & approximately –54% in the second. Therefore, subsequent to the most recent death cross, one might see the S&P500 Index decline to about 1200 by early 2017 which would be a Fibonacci 0.61.8% retracement.

BUT THERE’S MORE…

During the stock market bear markets of 2000-2002 and 2007-2008, the US dollar steadily rose in value vis-à-vis most other major currencies. Consequently, the price of gold slowing slipped lower.  During the two aforementioned bear stock markets, the US$ rose an average of about +18%. Consequently, applying this increase to current conditions projects the US$ Index rising to about 120 in the next several months & perhaps even higher going forward.

http://tinyurl.com/jo5czp6

To be sure, if history is testament, gold…could (temporarily) move lower reflecting a stronger greenback but, indubitably, this will be the last opportunity for investors to take positions in the shiny yellow at reasonable prices.