Just because the markets eked out another gain today, don’t get caught believing there is no limit to this rally. Many pundits have been claiming things are overbought for a while. So how do you tell when it is about to turn? Keith Harwood gave us a great clue not too long ago and the signal he warned us about just flashed red.

In the article he shared (you can read it here) he pointed out that the bond market can often be an early warning sign of things to come in the broader market. He even pointed out that a super simple way to keep an eye on bonds is to watch the TLT etf. This tracks the 20yr bonds and makes it easy to keep an eye on this canary in the coal mine. And, as he warned, TLT just dropped below its 100 day moving average.

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You can see that even after a recent attempt to get back above the 100 day moving average (in blue) the support just wasn’t there. This is something to keep a close eye on and if TLT pushes past recent lows it will be a big heads up to get ready for some heavy selling.

Keith has been great at helping us catch some of the things the big media miss that can set us up nicely for success. If you haven’t checkout his “cheat sheet” of tips he picked up as a market maker, it is definitely a must read. Be sure to check it out here.

Keep learning and trade wisely.

John Boyer


Market Wealth Daily