Are Stocks About to Plunge? A Recession Indicator That's Never Been Wrong Weighs In.
When examined with a wide lens, the stock market represents a pathway to long-term wealth creation. But when that lens is narrowed, the predictability of directional moves in the iconic Dow Jones Industrial Average (DJINDICES: ^DJI), benchmark S 500 (SNPINDEX: ^GSPC), and growth-powered Nasdaq Composite (NASDAQINDEX: ^IXIC) gets tossed out the window.
Although investors are reveling in the new bull market, the Dow Jones, S 500, and Nasdaq Composite have traded off bear and bull markets in successive years since 2020. There's a real possibility this pattern persists in 2024, with stocks plunging, once again.
While there's no such thing as a predictive indicator or economic data point that can, with 100% accuracy, forecast directional short-term moves in the Dow, S 500, and Nasdaq Composite, there are a few indicators and metrics that have strongly correlated with moves in the stock market throughout history. One such indicator, which has never been wrong, given a select set of circumstances, offers an ominous warning for investors in 2024.
Source Fool.com
