Our InvesTech Canary (in the coal mine) Index has been testing its critical support level for the last few weeks. On Wednesday, the Index -7% loss definitively broke support. Because the Canary Index tracks approximately 20 of the most notable overvalued and overhyped stocks in the market, it is a useful tool for tracking when and whether speculative psychology is reversing. With this major break in the Canary Index, it is likely that the peak in speculation is in place, which could make the blue-chip averages more vulnerable to a pullback in the months ahead.
