S&P 500 to Break Down, According to Leading Financial Newsletter Profit Confidential

George Leong, contributor to Profit Confidential, sees danger on the S&P 500 chart. The moving average convergence divergence (MACD) indicator, an indicator Leong likes to look at, also appears set to be flashing a sell signal.

In the article “S&P 500 Threatening to Break Lower,” Leong advises investors to be careful at this time.

“Since June, the S&P 500 showed three successive higher peaks at 1,363, 1,374, and 1,380,” reports Leong.

Yet he argues that if support around the 50- and 200-day moving averages is not seen, the index may falter with a break at 1,300, possibly even at 1,200 by September’s end.

Unless there is fresh data to support additional gains, Leong thinks stocks could trade sideways or break lower.

Leong’s stock analysis is also partly based on the light trading volume during the upward streak, as he notes that a failure to see high volume indicates a lack of mass market participation.

Leong thinks the market will need leadership to have any chance of advancing higher.

“The banking sector is looking more positive and could drive some buying,” says Leong.

“Success in stock picking is trading in the right direction,” states Leong. “Don’t look to the eurozone, China, or earnings for help.”

Instead, the Profit Confidential contributor says investors should make sure they have a defensive strategy should the trade turn against them and suggests they use puts as a hedge.

“The threat of global and domestic slowing could impede the upward move,” argues Leong. “The S&P 500 could fall to 1,180 by the year-end.”

Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market…before it plunged.

Profit Confidentialwas among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.

To see the full article and to learn more about Profit Confidential, visit www.profitconfidential.com.

Profit Confidentialis Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit www.profitconfidential.com.

Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.