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This 4-pack looks at the DJ Home Construction, Banks, Junk Bonds and the S&P 500, highlighting that bearish divergences took place in 1999 and 2007 at each (1). These assets were sending bearish topping messages “BEFORE” the tops in 2000 & 2007.
Looking at this year, each asset has been creating bearish divergence since early 2018 at each (2).
Are each of these assets sending an important Risk/Reward message again or will it be different this time?
Just the Facts Ma’am– The majority of stock indices remain above respective February lows at this time, as they remain inside of horizontal trading ranges!!! If these trading ranges would happen to break to the downside, odds increase these divergences have been sending important messages to stocks for months!