Profit Confidential Warns Three 'Panic Indicators' Point to a Bigger Sell-Off

Profit Confidential explains that while stocks have rallied after Black Monday, three stock market indicators warn of a bigger market sell-off.

Profit Confidential ( an e-letter of Lombardi Publishing Corporation, a 29-year-old consumer publisher that has served over one million customers in 141 countries, weighs in on the stock market and explains that three stock market indicators point to a bigger sell-off.

“While the Dow Jones Industrial Average and the S&P 500 have both rallied since Black Monday and the broad based mini-crash in late August, the market is still down 10% from its 2015 high,” says economist and lead contributor Michael Lombardi. “And three stock market indicators I follow are warning of an even a bigger market sell-off ahead.”

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), often referred to as the fear index, stands at the highest level since 2011. In mid-August, before Black Monday, when key stock indices were experiencing wild swings, the fear index jumped to the highest level since 2009.

“The VIX is saying investors are no longer complacent about the stock market; they have become fearful again. This is important because when investors are bullish, they see market pullbacks as an opportunity to buy,” Lombardi adds. “When investors are fearful, as the VIX now shows, they tend to sell on market weakness, pushing stock prices down further.”

The Short-Term Trading Arms Index is saying there is a crisis ahead. Also referred to as the “TRIM,” the index is a reflection of the number of public companies that have their stock prices declining and rising in value as it relates to their trading volumes. The index is calculated daily. A value above one on the TRIN is considered to be bearish and a value below one is considered bullish. Currently at 4.97, the TRIN is at its highest level since the end of 2011. Whenever the TRIN reached the level it currently stands at, we saw significant fluctuations in the S&P 500.

Lombardi explains that it is also critical to look at what the so-called “smart” money is doing. Institutional and large-ticket investors have substantially greater buying power than an average investor. When big investors are selling stock, their actions can impact the market if there are not enough buyers on the other side of the market. The National Association of Active Investment (NAAIM) Exposure Index plots the percentage of U.S. stocks in which active money managers hold positions.

“Currently, money managers hold just 28% of their portfolio in stocks. This is the lowest amount since early 2012 and late 2011. What is also interesting to note here is that their portfolio consisted of almost 100% stock in February of this year. In a matter of six months—February to August—their stock holdings have plummeted roughly 70%,” Lombardi concludes. “Why have institutional and big investors gotten so far out of the market? What are they concerned about that small investors don’t see? It’s something to think about.”

Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation, visit

Contact Info:
Name: Wendy Potter
Email: Send Email
Organization: Lombardi Publishing Corporation
Address: 350 5th Avenue, 59th Floor, New York, NY 10118
Phone: 905 856 2022

Release ID: 91261