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Strategist: Watch Out For These 3 'Clear-Cut' Bearish Signs In The Market

Strategist: Watch Out For These 3 'Clear-Cut' Bearish Signs In The Market

The Dow Jones Industrial Average soared above the 21,000 mark on Tuesday, a clear indication that the "Trump rally" is back on, right?

Not so fast, at least according to Tom Lee, a strategist and founder of Fundstrat Global Advisors. Speaking as a guest on CNBC's "Trading Nation" segment, Lee said there are three separate "clear-cut" signs that the market is expected to move lower than higher in the near term.

Trio Of Bearish Signals

First, Lee cited the narrowing of the long-term yield curve as a flattening curve is typically viewed as being a sign of slowing economic growth. From a historical perspective, bonds have been "much better at ferreting out problems and smelling slowdowns," and this is what the market is screaming today with yield curve.

"So I think the bond market is really taking the position that growth is going to disappoint, and the gap between the hard data and the soft data is still pretty big," he emphasized.

Second, Lee observed an "abrupt reversal" in the market where notable leaders following the U.S. election year including financials and energy are now taking a back seat and are negative in 2017.

Finally, many companies are likely to take a step back and re-examine their game-plan and get a better understanding of what tax reform from the White House might look like. While this in of itself isn't a problem, the fact is investors have been betting on 2017 to be a year of growth.

Related Links:

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