The markets are sinking this Friday as I pen this Weekend Roundup, hitting fresh 12-week lows as the Trump administration ramps up the trade war – this time with Mexico – rattling financial markets, sending U.S. Treasuries up even further, and revealing their desperate fantasy.

As we head into next week, multiple topping patterns are in play across the U.S. equity markets.

The chart below plots the S&P 500 and the New York FANG+ Index side-by-side, and both look like they’re headed to the I.C.U.

Note how the FANGs are in charge here – comprising 20% of the market capitalization of the S&P 500.

What’s the Fang Index?

The NYSE FANG+ Index is an equal-dollar weighted index that tracks technology and consumer discretionary sectors, namely highly-traded growth stocks of companies like Facebook, Apple, Amazon, Netflix, and Alphabet’s Google.

Keep an eye on the FANGs as a leading indicator, as we do here at the Critical Signals Report.

It leads the S&P 500, up and down.

That’s why we track it here.

We’re Not Alone When It Comes to Topping Patterns

European stocks are slumping too.

Actually, Europe is ahead of the U.S. when it comes to bad news.

Economic growth over there is tumbling faster than this side of the pond, with Italy and Germany in or close to recession and with a European Central Bank (ECB) pretty much out of bullets with interest rates so low.

Low interest rate problems sound familiar, right?

Well, US Federal Reserve rates are low too, noted below in our resounding chart on interest rate plateaus, which occur perilously close the start of full-fledged recessions. Too low to be able to reduce enough for any meaningful recovery when the next recession strikes.

What’s Coming Up Next Week at CSR?

That’s an easy one … Storm Tracker.

Storm Tracker is key to your following our Critical Signals Report and to our follow-on recommendations for portfolio construction.

Here’s our recently published Storm Tracker, suggesting a strengthening storm ahead, so we’re not too taken aback by these topping markets.

We’ve already provisioned for this coming storm in the Critical Signals Report All-Weather Portfolio.

Storm Tracker is SO important as an indicator of what lies ahead.

That’s why we’re launching a 5-Part Series on Storm Tracker this coming Monday, that takes you inside the Critical Signals Report, part-by-part, by discussing and displaying Trend Patterns (Part 1), Leading Indicators (Part 2), Yield Curves (Part 3), GDP (Gross Domestic Product, Part 4), and finally a “Surprise Indicator” (Part 5 – hint … it has something to do with reliable timing).

Sum up this 5-Part Series, et voila – you’ll understand Storm Tracker.

And when you understand it, you’ll trust it. That’s my goal … to gain your trust.

You’ll trust me on Storm Tracker when you finish the 5-Part Series. Storm Tracker sets the stage for much that follows here at Critical Signals Report, especially portfolio allocating, but we’ll be getting into the All-Weather Portfolio in weeks ahead.

There’s much to look forward to …

But for now, mind the topping patterns, absorb the risks, and above all, stay safe out there.

Matt Piepenburg


3 responses to “Time to Slice and Dice the 12-Week Lows with Exclusive Storm Tracker”

  1. I have never seen such an end to end analysis of the relationship between Federal Reserve funding interest rates and the Stock Market. I had long heard about inverted yield curves, and their predictive value for recessions, but never this detailed analysis of interest rates.
    Very well done and developed!!!!

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