NIRP Crash Indicator Reliability Confirmed during April 2016
By Michael Markowski, Director of Research, May 1, 2016
The NIRP Crash Indicator confirmed its reliability during April 2016, the first month in which the signal fluctuated since being developed in February 2016. Throughout March the signal remained a cautionary Yellow and the S&P 500 experienced little volatility as compared to the extremely volatile first two months of 2016. The index closed March up 4% compared to February 2016’s close. The indicator’s reading went from the cautionary Yellow to the Pre-Crash Orange and crash imminent level after the market’s close of Friday April 1, 2016. For the next week ended April 8, 2016, the S&P 500 experienced its most volatility since February of 2016 and closed down 1.5% for the week. After the reading went back to the cautionary Yellow on Friday April 22, it went to pre-crash Orange a second time in April before the market’s Thursday April 28, 2016 open. From the Thursday April 28 open to the Friday April 29 close the S&P 500 declined by 1.2%.
The NIRP crash signals are published and freely available each day at www.dynastywealth.com:
- Red — full crash
- Orange — pre-crash
- Yellow — caution
- Green — clear
For the NIPR Crash indicator to decrease from the crash imminent Orange or a crash Red reading to Yellow requires that the exchange rate between the yen and dollar be stable for an extended period of time or that the dollar advance significantly versus the yen. An increase in the indicator’s reading from Yellow to Orange requires a steady advance or a significant one day advance for the yen versus the dollar.
To have a better understanding of why the exchange rate volatility between the yen and the dollar is the primary metric powering the NIRP Crash Indicator the video entitled “Yen Volatility Causes Market Crashes” is highly recommended.
The following reports and articles covering the NRIP Crash Indicator are also recommended:
Dynasty Wealth, February 26, 2016, Acclaimed Analyst Produces “NIRP Crash Indicator”
Equities.com, April 1, 2016, No April Fool’s Joke: NIRP Crash Indicator Elevated to Pre-Crash Warning
Equities.com, April 9, 2016, Yen Volatility Puts Market on Precipice of Crash
Equities.com, April 29, 2016, NIRP Crash Indicator Back to Pre-Crash Level