​NIRP Crash Indicator's Signal Warns a Crash is More Likely

Michael Markowski  |

The NIRP Crash Indicator’s signal is now at its Orange pre-crash, or crash imminent reading, as compared to its Yellow cautionary or crash less imminent reading. The signal had been at Yellow since the US stock market’s close on Monday May 9, 2016.

The primary cause of the signal going to Orange is yen volatility. The Japanese yen appreciated significantly versus the US dollar, euro and other currencies over the last 24 hours. What has caused the yen to become more volatile? It's Japan announcing last night that it would postpone its proposed sales tax hike until 2019 due to continuing weakness in its economy.

Based on the signal going to Orange from Yellow, the probability is high that the S&P 500 will decline by at least an immediate 1.2%. On the two previous occasions during April of 2016, in which the signal want Orange from Yellow, the S&P 500 declined by at least 1.2% within days. See Equities.com's May 1, 2016 article April 2016’s Signals Confirm Reliability of NIRP Crash Indicator.

Since the Orange signal can quickly change to a Red crash-underway reading with a potential market crash of 5% or more, the NIRP Crash Indicator can be used by an investor to protect a portfolio. See the May 11, 2016 report “NIRP Crash Indicator Ideal for Futures Hedging and Trading”.

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 below 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

Equities.com, May 1, 2016, April 2016’s Signals Confirm Reliability of NIRP Crash Indicator

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”, February 26, 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 nine minute, 34 second video 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.

The following are my other reports that I have produced on the rapidly spreading negative interest rates:

April 25, 2016 Bank of Japan (BOJ) Pounding Nails in Bull Market’s Coffin

April 23, 2016 Why Market Could Spike to All-Time Highs Before it Crashes

April 15, 2016 Ridding World of Negative Rates May Require Meltdown of Income-Producing Assets

April 11, 2016 Yen Volatility Increases Probability of a Crash Happening Sooner

April 11, 2016 Negative Rates Pose Grave Risks to Banks (originally published Mar 12, 2016)

Mar 05, 2016 Cash Hoarding has Thrust Negative Rates into Lead Role for Next Crash

Mar 02, 2016 Dynasty Wealth Founder discusses NIRPs in Interview by SCN's Jane King

Feb 26, 2016 Black Swan Pre-Cash Investing Strategy Recommended (excerpt from 02/26/16 report

Feb 26, 2016 Japan's NIRP Increases Global Market-Crash Probability

My May 16, 2016, “Digital Transformation Create Industrial Graveyard” report covers the additional risk that is being caused by digital disruptors including Amazon and UBER to world’s largest industrial industries and companies.

For an overview and access to links to the subjects that I cover, including the digital economy, negative rates, perfect shorts, and micro-cap stocks please go to www.michaelmarkowski.net. Free access to the NIRP Crash Indicator is available at www.dynastywealth.com.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily 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.


Symbol Last Price Change % Change