This Signal Just Turned Red

Do you HATE paying hundreds of dollars a month for cable TV? You're not alone. The MOST HATED industries in the world are cable companies. But here's the good news: In the months ahead, we're going to see just one company "kill the industry as we know it." Click here to see how it's going to happen. Tuesday, August 5, 2014 | Issue #2347 Technical Tuesday: This Signal Just Turned Red Christopher Rowe, Director of Investor Education, The Oxford Club Last week's power punch to the stock market shocked some bullish investors. And as usual, many are starting to ask whether they just witnessed this year's market top. Trying to time the stock market can be a futile exercise, but understanding the risk dynamics is paramount. And the granddaddy of all stock market risk barometers has just sent an important signal. The New York Stock Exchange Bullish Percent Index (NYSE BPI) is an intermediate-term risk barometer that tells us whether supply or demand is in control of the stock market. How does it do this? By telling us what percentage of stocks on the NYSE are on "point and figure" buy signals versus sell signals. What you need to know Financial expert Marc Lichtenfeld believes $93 trillion could suddenly rush out of certain investments - and into others. Ironically, the ongoing bull market in stocks will hasten this event's arrival. Some investors will get very rich, while others will get crushed - especially when it comes to their "safe" holdings. But you don't have to be one of them - not this time. He's created this presentation to ensure that you come out on the winning side. View it here. Important Moves Only The power of this indicator lies in the fact that it focuses only on significant movements in stock prices. You see, for a stock to move from a point-and-figure sell signal to a point-and-figure buy signal (or vice versa) there must be a breakout above a resistance level (or below a support level) as well as a significant change in a stock's price. The NYSE BPI is a powerful indicator because it changes direction only when the point-and-figure buy or sell signals occurred in more than 6% of all stocks on the NYSE. The NYSE BPI changed direction on Friday, after a week of strong selling. Because the indicator had a decline of more than 6% from the high it set in early July, a down column - indicated by a new "O column" on the far right - has been created. This O column currently fills three boxes with an "8" in the lowest box, signifying the change occurred in August. View larger image This is an indication of elevated risk to bulls, as supply has taken control of the intermediate term. The change occurred because a large number of stocks moved below key support levels, which takes a serious commitment of institutional investment capital. And when institutions make such an important decision, it's vital to know what's happening. This doesn't mean it's time to bail out. It just means we must be more selective about our positions and take a closer look at which ones haven't been working during market rallies. The NYSE BPI typically changes columns a few times per year. It flipped to O's in February when risk was elevated and back to X's in the beginning of March when the skies cleared. So, as you can see, while risk was elevated at that time, the stock market charged higher again. Will we look in the rearview mirror and realize that we have seen the 2014 stock market high? No one knows. But when the market offers us a signal, it pays to take notice. Good investing, Chris Click here to post a comment on InvestmentU.com THIS COULD BRING $1.71 A GALLON GAS TO THE U.S. This catalyst converts one of the Earth's most abundant energy sources into gasoline. It's not petroleum, solar, hydro, wind, corn, algae or anything else you are probably thinking. And soon it will fuel 10 million U.S. vehicles... For as little as $1.71 a gallon! Reader Favorites From Investment U Investment U Plus by Bob Keaveney Tuesday, August 5, 2014 What's the clearest buy signal of all? Subscribers find out in today's edition of Investment U Plus - and they learn which company is showing that signal right now. Click here to find out how you can join them. Why Investors Have Never Had It Better by Alexander Green Monday, August 4, 2014 Few investors seem to realize just how positive the investment landscape looks today. But more than that, investors themselves have never had it so good. Read On... Gasoline Without Oil? The fracking revolution has created countless new American millionaires. And we may be on the cusp of yet another energy renaissance. Our Sean Brodrick recently discovered a company that's doing what should be impossible: Creating gasoline... without oil. The implications for this company, and its lucky investors, are staggering. To learn more, click here. You are receiving this email because you subscribed to Investment U. 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