Bad Breadth Portends Stock Market Correction



Comments (5)

  1. Johnahan Turrietta says:

    So is Alan telling us to get out of the market and lay low in cash for a while or buy short term put options?

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    rosario Reply:

    This is another reason to be invested in well established high yielding companies that pay while I wait!!

    [Reply]

    Alan Gula

    Alan Gula Reply:

    Hi Johnahan,

    I’m not telling you to do anything. I’m simply alerting you about a potential risk. Everyone has a different goal, time horizon, and risk tolerance. Your plan of action (if any) will depend on your personal situation.

    Timing the market is very difficult, so most investors should simply assess the risks of their positions and make adjustments to vulnerable securities. I recently talked about a preferred stock ETF that should provide a relative degree of safety, yet still has a decent yield: http://www.wallstreetdaily.com/2015/05/21/preferred-stock-yield/

    As always, maintaining a diversified portfolio of global stocks and bonds is the best strategy to weather any storm.

    Regards,

    Alan

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  2. Steven Jon Kaplan says:

    This is a carefully researched and well-written article. Thank you!

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  3. Mark Braswell says:

    This is the first I am reading about breadth. But, I was doing some research on market corrections and found this piece which is great. I have been keeping track of the upcoming correction with a neat tool I found a few weeks ago (http://www.marketdip.com/). Are you aware of other data that aligns breadth being a key indicator of historical corrections?

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