This Early Warning Sign Is Flashing

[Trading With Larry Benedict]( Managing Editor’s Note: If you’re following Larry’s paid research, you know he’s predicted this year will be treacherous. As he put it in his [prediction essay]( at the start of this year, “Investors [are piling] into stocks. And you don’t want to bet blindly against that momentum. But with stocks trading at excessive valuations and overbought, there’s a lot of room to the downside.” Larry’s not alone in looking askance at the recent market action either… That’s why, today, we’d like to share another special guest essay from fellow editor and longtime trader Jeff Clark. Like Larry, Jeff thinks the market is looking risky… This Early Warning Sign Is Flashing By Jeff Clark, Editor, Market Minute We’re only five weeks into 2024, and the S&P 500 is already up 4%. The index traded as high as 4,975 on Friday – which is within spitting distance of the 5,000 price target many analysts pegged for the end of the year. At this point, it’s hard (mathematically) to argue for even more upside from here. And technically, it’s starting to feel a little like early 2022. Back then, after the S&P 500 popped 7% higher in just four trading days, [I argued]( folks might be well-advised to cash out and take the rest of the year off. A 7% gain is about the historical average annual return for the stock market. And by February 3, 2022, traders had already achieved that return. So, why not lock in the gain and take a well-deserved 11-month vacation from the stock market? I can make the same argument today. Recommended Link [Another market crash is NOT coming]( [image]( Market Wizard Larry Benedict accurately predicted the 2020 and 2022 crashes. Now he’s coming forward with a new prediction… Only this time, he’s not predicting a crash. He’s forecasting something that could be even more painful – and last even longer – than a crash. [Click here for all the details – including his unique solution.]( -- Lock in Some Gains With the S&P 500 already up 4% for the new year, the index is trading 22 times its 2024 earnings estimates. That’s at the high end of its historical valuation range. And that puts the earnings yield (earnings divided by price) at 4.94%. By comparison, a three-month Treasury bill yields 5.25%. Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Investors who caught the rally over the past five weeks can sell and lock in a 4% gain. Then, they can stick the money in a money market fund for the next 11 months and collect another 4% or so. That’ll give them an 8% return for 2024 – which is on par with the historical average of the stock market, without any risk of a market decline. And that risk looks substantial right now. Here’s an updated look at the chart of the S&P 500… As the S&P 500 has been making new highs over the past month, all of the momentum indicators at the bottom of the chart (MACD, RSI, and CCI) are making lower highs. This sort of “negative divergence” tells us the momentum behind the rally is waning. It is an early warning sign of a reversal. So, with the fundamental valuation stretched to the high of its historic range and the technical condition looking poised to make a turn, investors might follow the same advice I offered in early 2022… Consider taking the rest of the year off. Best regards & good trading, [Signature] Jeff Clark Editor, Market Minute IN CASE YOU MISSED IT… [Private Invite: The World’s Most Predictable Trading Breakthrough: “Pulse”]( For the last 41 years I’ve kept a BIG secret… A one-of-a-kind system for predicting the movement of a stock BEFORE it actually happens… [Allowing anyone to double their money (on average) every single month of the year – for the last two years!]( It’s all thanks to what I believe to be the world’s most predictable trading system – “Pulse”. - Allowing you to capture returns of 106%... 267%... and 475% in ANY market condition… - [Spot hot new market trends before anyone else (like the rise of Artificial Intelligence stocks or crypto)]( - You can even IGNORE 99% of stocks… instead, just focus on stocks that are set to make BIG moves… within just days… [CLICK HERE for Details.]( [image]( [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. 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