Indicators Predicting Stock Market Crash in 2012
The stock market has had a tremendous run from the October 2011 lows, but two indicators are predicting a market correction is due.
First, the level of insider selling is alarming — the last time insider selling peaked was back in May of 2011 (Sell in May and Go Away), which was just prior to the summer stock market correction.
Second, is the divergence between the Dow Jones Transportation Index and the S&P 500. The recent market correction in transports is hinting that there might be more weakness than the S&P 500 is showing us.
Various market sentiment indicators for the S&P 500 don’t always predict a market correction, but taken together with other indicators — this can raise a big warning flag for investors.