| By Jeff Clark, Editor, Jeff Clark’s Market Minute “It’s all hype…” “It’s clickbait…” “It’s fearmongering…” That’s just some of what folks said about my prediction last year that the stock market would crash. I can’t blame them for being skeptical. After all, the financial industry is full of folks who make scary predictions just to capture headlines and get their “15 minutes of fame.” But, what if I’m not one of those people? What if I’m just a guy who has been following the financial markets for nearly four decades? What if I’ve made plenty of bold calls – many of which have been dead-on accurate? And what if, when I made that call, I noticed that many conditions in the stock market were eerily similar to conditions that preceded bear markets before? Folks… that’s not fearmongering. That’s just suggesting, as the storm clouds build in the distance, that you might want to carry an umbrella. And I hope you listened. Because the market, of course, did crash. And it was even uglier than I anticipated… | Recommended Link | You could lose everything this year… in the worst market crash since March 16 Stocks could fall by 50% in a matter of weeks, with no warning. No announcement from the Fed, your brokerage firm, or anyone else. It'll be devastating for most investors. But if you can see the crash coming early enough and know what to do – you could make $1,000s, over and over again, as it all transpires. | | | - | Let me show you the main thing that tipped me off back then. Take a look at this monthly chart of the S&P 500 plotted along with its 20-month exponential moving average (EMA)… 
My longtime readers know I use this chart to define bull and bear markets. If the S&P 500 is trading above its 20-month EMA, stocks are in a bull market. If the index is trading below the line, the bear is in charge. Some examples of when that line was breached to the downside, and foretold a bear market, are marked by red arrows above. Stunning Fact About the Top 2 Stocks During COVID-19 Crisis… As we can see, that 20-month EMA line was broken at the beginning of March. So, the bear market is on. But we had several clues to suggest this would happen, well in advance. The Moving Average Convergence Divergence (MACD) indicator at the bottom of the chart provided one of the early warning signs of a bear market. Without getting too complicated, if the black MACD line is trading above the red line, stocks are in a bull market. When the black line crosses below the red line, traders need to be on the lookout for the bear. Notice how in 2000 and 2007, the MACD indicator gave us that “bearish cross” from extremely overbought conditions (the red circles on the above chart). In both cases, the S&P 500 dropped into a bear market a few months later. It’s these two indicators, working together, that paint the clearest picture of an imminent bear market. | Recommended Link | | Why VCs are Rich and You’re NOT! While Wall Street was busy lying to you last year… Pumping up their “hot” IPOs like Uber and Lyft (down almost 75%!) … Tech legend Jeff Brown was playing a different game… Focusing on tiny “Penny IPOs” 100 to 300 times cheaper… And boy did it pay off! Jeff recommended a little-known Penny IPO that quickly shot up 432% in 6 weeks… And, now, he’s spotted 3 more. But you need to act quick. Because you can buy shares in ALL 3 of these tiny Penny IPOs right now for under $50… TOTAL! | | | -- | That’s why the market didn’t crash when the S&P 500 dropped below its 20-month EMA in 2010 and 2011 (the green arrows on the chart). In both of those situations, the MACD was more neutral than overbought. There wasn’t a bearish cross in 2010. And in 2011, the bearish cross reversed before the end of the year. So, we didn’t have the conditions necessary for a bear market back then. But in October 2019, the storm clouds looked a little more ominous. The MACD indicator had already completed a bearish cross in November 2018. And, it never made a strong reversal as it did in 2011. Instead, the black and red lines stuck together. The bullish momentum never returned. And that was another significant warning sign. A Sneak Peek Inside Apple's 5G iPhone? Of course, the stock market did recover from the December 2018 breakdown. And, the S&P 500 did manage to make a new all-time high in July. But, that action created negative divergence on both the MACD and Relative Strength Index (RSI) indicators – marked by the blue lines on the chart. Negative divergence – when a chart makes a higher high, but an indicator makes a lower high (shown by the blue lines above) – tells us that the momentum behind the rally is waning. | Recommended Link | | 100 Billion 5G iPhones Need This Apple is expected to release its long-awaited 5G iPhone on or around Sept. 22. But it’s not Apple’s stock I think will soar the highest. Instead, one company makes a tiny piece critical to 5G phones. And its shares could soar. This video gives you a sneak preview of this brand-new device. And why it could be the No. 1 tech stock of 2020. | | | -- | It’s a sign of a potential change in trend from a bull market to a bear market. So, we had multiple “bearish crosses” on the MACD… and negative divergence on the MACD and RSI… and we had a breach of the 20-month EMA. If you’re looking for clear proof that we’ve entered a bear market, you could do a lot worse. If you’re looking for more proof, though, I share a few other reasons in a special presentation I recorded recently (click here to watch it). Best regards and good trading, Jeff Clark
Editor, Jeff Clark’s Market Minute P.S. The bear market is here. There’s no denying it. It’ll be a scary time for most everyday folks who own stocks. Long-term investors who aren’t prepared (and that’s most of them) could soon lose a lot of money… But not traders. Traders don’t fear market crashes. In fact, we get excited about them. As scary as they seem, they can be a goldmine for trading profits… I urge you to take a look at what I have to say about this crash. It could mean the difference between losing everything you’ve built up, or actually making massive profits, as the bear market transpires. Just click here to get the full story.
Like what you’re reading? Send your thoughts to feedback@rogueeconomics.com. | Note From the Publisher You’ll notice a kind of “cosmetic” change in your Diary subscription. Don’t worry. You’ll still get absolutely everything you get right now. But going forward, Bonner & Partners will be called “Rogue Economics.” Longtime readers will recognize the idea of rogue economics… Bill launched the Diary of a Rogue Economist in 2013, to just a few thousand subscribers, when he formed his own boutique publishing business. Over the last seven years, his daily diaries (which became Bill Bonner’s Diary in 2015) have reached millions of readers. And his small, niche business has grown into one of the largest and most successful publishers in the industry. As part of that growth, we’ve introduced new voices… Diary readers regularly hear from tech expert Jeff Brown, world-traveler Tom Dyson, famed speculator and “anarcho-capitalist” Doug Casey, crypto guru Teeka Tiwari, longtime trader Jeff Clark, commodity analyst Dave Forest, and many others… In other words, we’ve been sharing more than just Bill’s ideas. And it’s time for our name to reflect that. Otherwise, nothing will change. You’ll still find Bill – his stories, insights, and wisdom – where you always have. It’ll just have a slightly different look. And you can expect more unique ideas from other big thinkers in our pages. Best regards, Amber Lee Mason
Publisher P.S. As always, let us know what you think – good or bad. You can now write us at: feedback@rogueeconomics.com. | | - |
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