While a handful of technology giants continue to lead the broad stock market indices higher, a closer inspection of the averages reveals an alarming deterioration in the performance of a growing number of household names. The shares of Proctor and Gamble for example have plunged -22% since their 2017 highs. AT&T shares have dropped -22% in less than a year, while Coke has fallen -13%, IBM -18%, Johnson & Johnson -16%, Walmart -24% and General Electric a whopping -55%. If the economy was in such great shape, these bellwether stocks would not be struggling so badly.
The FAANG stocks are concealing a broader deterioration in the market and my indicators suggest that the smart money is heading for the hills. If the FAANG's break lower in the months ahead, we will see a sharp acceleration lower as everyone rushes for the exits. I lowered the equity allocation in my Active Asset Allocator strategy from 20% to 0% on 2nd March 2018 and am patiently waiting before I make my next move. Meanwhile, after a few months rest, Gold Trader is firing up again. Get in touch to find out how you can make low-risk, tax-free profits and only pay fees if you make money.
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