Next stock market crash: 7 hedges as warning signal hits 70-year high

Reuters/Brendan
McDermid

• The Leuthold Group has developed a five-part
  methodology for assessing how much upside the stock market has
  at any given time.
• The firm’s latest findings show that this measure is at
  its most extended level in more than 70 years.
• Leuthold offers seven recommendations for what
  investors can do to get ahead of any subsequent market
  meltdown.

It takes more than one big development to crush a bull market.

But what happens when five areas become problematic?
Well, that’s when things start to get dicey.

Recent analysis from The Leuthold Group suggests we’ve
already reached this point and are staring down a potential
meltdown.

The firm has formulated a new, stock-market-specific twist on a
concept called capacity utilization, which it uses to assess the
age of an expansion. The logic behind it is simple: The fuller
capacity is, the less upside in something.

Leuthold’s stock-specific assessment uses five components. And
once they’re all weighed, the firm finds that utilization is at a
more than 70-year high. That’s dangerously extended
territory, no matter how you look at it. …

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