The 75% Chance Stocks Could Fall

Mastery favorite International Business Machines (IBM) latest conference call was a major downer.  Worse yet when you look at the numbers the S&P 500 could be in for a pullback. 

IBM is worth paying attention to, they just missed big.  Here's the take away via WSJ.com:

But IBM is key the stock to watch for its impact not only on the Dow, but also on the S&P 500.

Analysts at Bespoke Investment Group point out IBM’s results have a fairly accurate track record of predicting the S&P 500’s future short-term move.

Dating back to 2001, IBM’s one-day stock move in reaction to earnings has been directly correlated to the S&P 500’s move over the ensuing five weeks about 75% of the time, including the last four quarters, according to Bespoke.

Assuming IBM’s declines hold, “it’s not looking good for the overall market in the next five weeks,” says Paul Hickey, co-founder at Bespoke.

We have all been warned. IBM closed down 5% today just a little over $200 a share.

IBM Charts