Tom welcomes back Michael Oliver from Momentum Structural Analysis. Michael discusses how they use long-term monthly charts, and they plot it against a mean. These charts show momentum, and they provide a warning when the markets are about to change. Usually, the momentum tends to deviate near tops and bottoms and warns you that the big picture is about to change. They currently monitor shorter-term trends for the equity markets because the Nasdaq, Dow, and S&P are all near all-time highs.
To subscribe to our newsletter and get notified of new shows, please visit http://palisadesradio.ca
They believe the markets are topping and points out that the large leading stocks are waning in these indexes. This could be a sign of trouble and evidence of a gradual decline into a bear market. He discusses how bonds are usually inverse to equities, and they are watching for a counter-trend rally. If significant funds get nervous, they will move to treasury bonds and gold.