​April 2016’s Signals Confirm Reliability of NIRP Crash Indicator

Michael Markowski  |

The NIRP Crash Indicator confirmed its reliability during April 2016. April was the first month in which the signal fluctuated since being developed in February 2016. Within days after both of April’s dates in which the reading was elevated to the pre-crash Orange the volatility of the markets increased significantly resulting in immediate declines of greater than 1.2% for the S&P 500.

Throughout the entire month of March the signal for the NIRP Crash Indicator remained the cautionary Yellow and the S&P 500 experienced little volatility as compared to the extremely volatile first two months of 2016. The index closed March up 4% compared to February 2016’s close. The indicator’s reading went from the cautionary Yellow to the pre-crash Orange and crash imminent level after the market’s close of Friday April 1, 2016. For the next week ended April 8, 2016, the S&P 500 experienced its most volatility since February of 2016 and closed down 1.5% for the week. After the reading went back to the cautionary Yellow on Friday April 22, it went to pre-crash Orange a second time in April before the market’s Thursday April 28, 2016 open. From the Thursday April 28 open to the Friday April 29 close the S&P 500 declined by 1.2%.

The NIRP crash signals are published and freely available each day at www.dynastywealth.com:

  • Red — full crash
  • Orange — pre-crash
  • Yellow — caution
  • Green — clear

For the NIPR Crash indicator to decrease from the crash imminent Orange or a crash Red reading to Yellow requires that the exchange rate between the yen and dollar be stable for an extended period of time or that the dollar advance significantly versus the yen. An increase in the indicator’s reading from Yellow to Orange requires a steady advance or a significant one day advance for the yen versus the dollar.

To have a better understanding of why the exchange rate volatility between the yen and the dollar is the primary metric powering the NIRP Crash Indicator the video entitled “Yen Volatility Causes Market Crashes” is highly recommended.

The following reports and articles covering the NRIP Crash Indicator and the yen are also recommended:

Dynasty Wealth, February 26, 2016, Acclaimed Analyst Produces “NIRP Crash Indicator”

Equities.com, April 1, 2016, No April Fool’s Joke: NIRP Crash Indicator Elevated to Pre-Crash Warning

Equities.com, April 9, 2016, Yen Volatility Puts Market on Precipice of Crash

Equities.com, April 29, 2016, NIRP Crash Indicator Back to Pre-Crash Level

The impetus for the development of the NIRP Crash Indicator was from the research conducted on negative rates and the extreme volatility that they are causing for the capital markets. See Japan’s NIRP Increases Global Market-Crash Probability”, February26, 2016 report.

Based on my continuing research coverage of the spreading negative rates and the devastating effect that they can have on the global banking system the probability is high that the major global stock indices including the S&P 500 will begin a significant decline by 2018 at the latest. My April 15, 2016 article entitled, "Ridding World of Negative Rates May Require Meltdown of Income-Producing Assets, provides details about the potential mark down of the S&P 500 could likely be in stages. I highly recommend my 9 minute 34 second vided interview by SCN’s Jane King entitled "Why Negative Rates could send the S&P 500 to 925" be viewed. In the video I explain the math behind why the S&P 500’s declining to below 1000 may be the only remedy to eliminate the negative rates.

Dynasty Wealth LLC, the “boutique” research firm that I founded evolved from research that I had conducted on the ongoing transformation from the industrial economy to the digital economy. My findings enabled me to conclude that the period from 2015 through 2020 would be the best ever for investors to generate dynasty wealth returns of 10- to 100-times from utilizing a truly diversified portfolio. The video entitled, “Digital disruptor companies have the potential to get $10 billion valuations quickly,” below provides details about how investing into a portfolio of digital disruptors enable investors to create dynasty wealth. It discusses digital disruptor UBER. A $10,000 investment into UBER in 2010 was valued for $105 million in 2015.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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