By Graham Summers, MBA
Yesterday, bonds experienced a slight rebound, but it was not a strong enough signal to indicate that the situation has completely stabilized. While things have settled down, there hasn't been much improvement, and leading indicators suggest that this correction is not yet over.
Historically, high yield credit has been a reliable indicator for both upward and downward movements in the stock market. In October 2022, it reached its lowest point before stocks did, and currently, it is indicating that the S&P 500 could potentially drop to 4,100.
Another leading indicator I monitor is market breadth, which also suggests that stocks have not finished falling. Therefore, I remain skeptical of the recent bounce in stock prices.
Furthermore, the long-end of the Treasury market has experienced a significant collapse, resulting in substantial losses for banks and financial institutions. I have been warning about the impending Great Debt Crisis, which is rapidly approaching. It is crucial to prepare for this crisis now, before it hits.
In light of this, I have identified a series of market events that typically occur before every crash. I discuss these events and their implications for the current market in a Special Investment Report titled "How to Predict a Crash." Normally, this report would be sold for $249, but we are offering it for free to anyone who joins our Daily Market Commentary, Gains Pains & Capital.
Graham Summers, MBA
Chief Market Strategist
Phoenix Capital Research