Our InvesTech Canary (in the coal mine) Index recently plunged below initial support and proceeded to close below its critical support level for the first time yesterday. We introduced this tool earlier this year as a way to track when and whether speculative psychology is reversing. The Canary Index’s breakdown reveals that euphoria in the stock market is clearly fading.
However, the critical question is whether the Canary Index will regain support in the weeks ahead or continue its freefall – which would confirm that that the peak in speculation is in place. We explore how the Canary Index’s breakdown compares to an important market top of the past, in addition to what it might mean for today, in this week’s issue of InvesTech Research.