​S&P to New All-time Highs Before NIRP Signal Reverts Back to Orange

Michael Markowski  |

The NIRP Crash Indicator’s signal has been downgraded from the Pre-Crash Orange to the cautionary Yellow "crash less imminent" reading. The signal had been at Orange since June 1, 2016. The primary cause of the signal going to Yellow is because of the US dollar stabilizing versus the yen for an extended period. Additionally, both the dollar and the euro spiked up versus by 1.32% and 2.22% respectively overnight.

The stabilization of the dollar versus the yen for an extended period followed by a spike up is a very bullish short term indicator. This happening with the outcome of the Brexit being uncertain is especially significant. The powerful moves by the euro and dollar versus the yen indicate that a Brexit has been fully discounted.

Based on this developing situation, I predict that the S&P 500 will eclipse its all-time highs before the NIRP Crash Indicator’s signal reverts back to Orange Pre-crash reading. The S&P 500 advanced by 4% while the signal was at Yellow during the entire month of March. After the NIRIP Crash Indicator went from Orange to Yellow on Monday May 9, 2016, the S&P experienced it single biggest one day advance since March 1, 2016 on Tuesday May 10th.

The chart below depicts that during the period that signal was in effect the dollar fell from 110.71 yen to a new 19 month low of 104.25 yen on June 16, 2016, a peak to trough decline of 6%. For the seven day period ending June 23, 2016, the dollar’s trading range narrowed to between 104 and 105 yen. After the week of consolidation, the dollar spiked to 105.95 before the opening of the US markets on Thursday June 23, 2016.

While the Orange signal was in effect the S&P 500 closed at 2099 on June 1, 2016 and opened at 2092 on June 23, 2016. Based on the beginning and ending points in which the Orange signal for the NIRP Crash indicator was in effect the S&P 500 was unchanged. However, during the 22 days which the signal was in effect the S&P 500 ranged from 2071 to 2119.

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 is best utilized by an investor to protect a portfolio while it is in effect. See May 11, 2016 report “NIRP Crash Indicator Ideal for Futures Hedging and Trading”. Since it was developed in early 2016 and launched on March 1, 2016 the NIRP Crash Indicator has fluctuated between the Yellow and Orange Readings.

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 change or be downgraded 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 or spike up 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. The relationship between the yen and the euro is a secondary indicator.

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, entitled “Yen Volatility Causes Market Crashes” is highly recommended:

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 11, 2016 article entitled, "Negative Rates Could Send S&P 500 to 925 If Not Eliminated” provides the rationale as to why the S&P 500 could potentially decline by more than 50% from its May 2015 high. I highly recommend viewing my 9 minute 34 second video interview by SCN’s Jane King entitled "Why Negative Rates could send the S&P 500 to 925" below:

The impetus for my 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 Probability of Global Market Crash”, March 4, 2016. Additional reports that I have produced on negative rates are available at www.dynastywealth.com.

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.

Based on my recent research on the micro-cap markets that I conducted in May 2016, I concluded that the Dodd Frank Act which the SEC began to implement in 2012 has driven the share prices of micro-cap and low priced share companies to their lowest relative valuations that I have seen since entering the capital markets 40 years ago. Because of this phenomenon, I am now on a quest to find and recommend 100 of the world’s best micro-cap stocks as soon as possible. The 4 minute video below entitled “Trophy Investing’s Search for the Best 100 Penny Stocks” provides details about the valuations for micro-caps being ridiculous and why investors should be aggressively accumulating microcap shares NOW.

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.


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