{"id":20512,"date":"2023-01-23T07:30:24","date_gmt":"2023-01-23T12:30:24","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=20512"},"modified":"2023-01-23T07:30:24","modified_gmt":"2023-01-23T12:30:24","slug":"another-sign-of-trouble-for-this-market","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/another-sign-of-trouble-for-this-market\/","title":{"rendered":"Another Sign of Trouble for This Market"},"content":{"rendered":"

Jeff’s Note:<\/strong> On Wednesday, a 44-day crash is going to hit the markets. Last January, when this strange market anomaly hit… 1,662 stocks dropped 39%, 47% and even 58% in a single day.<\/p>\n

Now, it’s about to happen again on January 25. But throughout my career I’ve used these crashes to make money, while others panic.<\/p>\n

You see, I’ve profited by using the most reliable strategy of my career<\/a>… where I can know ahead of time which stocks are pre-determined to see big moves. I’ve even built a proprietary calendar that tells you which stocks to target.<\/p>\n

So, join me on Wednesday, January 25 at 8 p.m. ET, where I’ll prepare you for this 44-day market anomaly and even give away the name of three tickers I’m targeting. Just click right here to sign up and join me<\/a>.<\/p>\n

And read on to see what Imre Gams says are the two most important markets to watch right now…<\/p>\n

\n

The new year started off great for stock market investors.<\/p>\n

No “Santa Claus” rally to end the year? No problem.<\/p>\n

The S&P 500 rallied as much as 5.83% between the start of the year and January 17.<\/p>\n

But on January 18, the market dropped over 1.5%, leaving investors wondering if there’s more pain to come.<\/p>\n

Unfortunately, I believe the answer is “yes.”<\/p>\n

And there’s one important price chart that’ll help explain why there’s more pain to come…<\/p>\n

The Importance of Bond Yields<\/h2>\n

I’m talking about the 30-year government bonds yield. It’s the annual interest rate that the U.S. government will pay out on its 30-year bonds.<\/p>\n

But the significance of it is much more than just the payout on bonds.<\/p>\n

You see, this market also signals what investors think of the broader economy… as well as influencing the interest rates that are paid on loans.<\/p>\n

Another important point about bond yields is that the yield of a bond (how much the bond will pay out) moves opposite to the price of the bond.<\/p>\n

In our current economic environment, the market has been selling bonds when it thinks that inflation is headed higher, and the Fed will raise interest rates.<\/p>\n

On the other hand, the market has been buying bonds when it thinks that inflation is stabilizing, and the Fed will slow down or even halt their rate hikes.<\/p>\n

With that in mind, let’s look at a price chart of the 30-year government bonds yield. This yield is considered by many investors as the bellwether U.S. bond…<\/p>\n

\"Chart\"<\/div>\n

There are two key features to this chart, which might both serve as important support levels for the 30-year yield:<\/p>\n

    \n
  1. \n

    We have technical support coming in around 3.44%.<\/p>\n

    This proved to be a major level of resistance back in November 2018 and then again in June 2022. The market was able to finally break through this level in September.<\/p>\n

    Old resistance behaving as new support is a classic concept of technical analysis. That’s why it’s important to keep an eye on that 3.44% level as the market trades back to it.<\/p>\n<\/li>\n

  2. \n

    We also have one of my favorite trend-identifying indicators, the 200-period moving average (MA – green line).<\/p>\n

    The 200-MA is great at pointing out the direction of longer-term trends. In broad strokes, if the market can trade above the 200-MA, then the trend is bullish. And if the market trades below the 200-MA, then the trend is bearish.<\/p>\n

    As you can see, the market traded above the 200-MA for all of 2022. But on October 24, the 30-year yields put in a top at 4.22%. Since then, investors’ expectations of the Fed have shifted.<\/p>\n

    The market believes that interest rates will eventually start to come down. Since putting in a top on October 24, the 30-year yield has declined by as much as 22.97%.<\/p>\n

    And because yields move opposite to the price of bonds, that means that bonds have enjoyed a nice rally.<\/p>\n

    But now, prices are approaching the 200-MA. If this moving average holds as support, then we’ll see bond prices fall… which means the yield will go up again.<\/p>\n<\/li>\n<\/ol>\n\n\n\n
    \n

    Free Trading Resources<\/strong><\/p>\n

    Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    Two Important Markets to Watch<\/h2>\n

    Here’s what this all means for the stock market.<\/p>\n

    Right now, investors are obsessed with inflation and whether the Fed believes they have inflation under control.<\/p>\n

    A rising yield is the market’s way of telling the Fed that they think interest rates are going higher.<\/p>\n

    On the other hand, if the yield continues to fall, then investors believe the Fed will pivot sooner than later.<\/p>\n

    If the 30-year yield does find support and starts to trade higher again, then it’s highly likely that this would be further bad news for stocks.<\/p>\n

    It seems that investors have pinned their hopes for a stock market recovery on signals that inflation is easing.<\/p>\n

    If that’s not the case, then investors will dump bonds once more… right along with stocks.<\/p>\n

    I think the 30-year yield (and its sister the 10-year yield) are two of the most important markets to keep an eye on right now.<\/p>\n

    So, keep an eye on them. If those markets find support and start to rally again, then stocks are likely to be in big trouble.<\/p>\n

    Happy trading,<\/p>\n

    Imre Gams
    Analyst, Market Minute<\/em><\/p>\n

    <\/p>\n

    Reader Mailbag<\/strong><\/h2>\n

    In today’s mailbag, Currency Trader<\/em> members share their positive experiences with Imre’s forex recommendations and education. To learn more about his service, click right here<\/a>.<\/p>\n

    \n

    I’m new to your system. This is my second trade since I joined.<\/p>\n

    I made $69… roughly 28% of my risked fund on this trade. It happened that I got the alert late and was already in the deep by the time I wanted to raise the stop loss.<\/p>\n

    So, I decided to take the risk up to what I set up already during the opening of the position. And today I had the opportunity to sell higher than our entry price. I think I was a bit lucky.<\/p>\n

    Thank you for all your concise guidance every time there’s an action to take. I really like the tempo of the trades. This is trading but not too active to become a hassle. Please keep it up simply as it is.<\/p>\n

    – Komlan A.<\/strong><\/p>\n<\/blockquote>\n

    \n

    Good afternoon. Just to give a little feedback, I’ve made positive money on both trades so far. About 3% on the EUR\/USD trade. I’m looking forward to learning more.<\/p>\n

    – Richard H.<\/strong><\/p>\n<\/blockquote>\n

    Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at feedback@jeffclarktrader.com<\/a>.<\/p>\n

    <\/p>\n","protected":false},"excerpt":{"rendered":"

    There\u2019s one important price chart that\u2019ll help explain why there\u2019s more pain to come\u2026<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[76],"newsletter-type":[],"ticker":[],"class_list":["post-20512","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-imre-gams"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/20512","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/49"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=20512"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/20512\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=20512"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=20512"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=20512"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=20512"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=20512"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=20512"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=20512"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}