On March 29th the Power of the Pattern shared that an indicator was suggesting the S&P 500 would fall at least 7% in value (see post here) This indicator is the Australian Dollar/U.S. Dollar ratio….when it breaks support, the 500 index often follows. The last three times this index broke support the 500 index fell 8% twice and 15% once. See the above for past S&P 500 declines.
Some call it the Magazine cover indicator….more often than not, when a major news magazine makes a bold prediction about the stock market, it heads in the opposite direction. Look what “Newsweek” published in the past week.
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Newsweek magazine published a bullish cover about the U.S. economy as the 500 index was breaking support and the AUD$/US$ ratio is breaking a new support line, at the same time. Is this a “Double Kiss of Death” for the 500 index? Stay tuned!!!
