Saturday, June 13, 2015

Get Ready to Profit From the Short Side

It looks like the stock market is entering a correction phase...
 
With the breakdown in the high-yield bond market, the sharp recent increase in the 10-year Treasury yield, and the record high level of New York Stock Exchange (NYSE) margin debt, the stage is set for a significant correction.
 
We haven't seen a 10%-or-greater pullback in the broad stock market since November 2011. So we're certainly overdue for one now. And I think the action we're seeing this week is the beginning of that sort of move...
 
Take a look at this updated chart of the S&P 500...
 
 
As of Tuesday's close, the S&P 500 was trading only about 2.4% below the all-time high it made last month. So many folks might argue that it's premature to talk about the market entering a correction phase.  (more)
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