Equities Will Be Vulnerable As The Number of Warning Shots Pile Up

Equities will be vulnerable to a major sell-off as the number of warning shots across their bow pile up in the months/years ahead.  The last junk spread sell signal was generated in 2007.10 (chart); we should see another by 2016.

Chart: Large Cap Stocks Total Return Index (LCSTRI) and Moodys Junk Spread (BAA less AAA rated Yields) Cycle Z Scores (BAA-AAAC1& BAA-AAAC2)


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