2 Historically Flawless Metrics Suggest the Stock Market Can Plunge: Here Are 3 Stocks I've Sold Ahead of What May Be a Big Move for Wall Street

Market Overview - The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have gained 23%, 44%, and 71% respectively since the beginning of 2023, reaching all-time highs [1] - Historical patterns indicate that stock market corrections are a natural part of the investing cycle, with two predictive metrics suggesting a potential downturn for major indexes [1] Economic Indicators - The U.S. M2 money supply has declined by 3.49% since its peak in April 2022, marking the first significant drop since the Great Depression [4] - Previous instances of M2 declining by at least 2% on a year-over-year basis have coincided with economic depressions and high unemployment rates [4] - A rebound in M2 has been observed, but the current decline suggests potential pressure on discretionary spending [4] Valuation Metrics - The S&P 500's Shiller P/E ratio is currently at 35.76, significantly above the historical average of 17.14, indicating overvaluation [6][7] - Historical data shows that when the Shiller P/E has surpassed 30, the S&P 500 and Dow Jones have experienced losses ranging from 20% to 89% [6][7] Company-Specific Actions - Intuitive Surgical has been sold due to its high valuation, trading at approximately 60 times forward-year earnings despite solid operational performance [9][10] - Vertex Pharmaceuticals was also sold, as it is trading at a valuation of 12 times current-year sales and 27 times forward-year earnings, which fully values its growth prospects [11][12] - ExxonMobil was divested due to concerns over cyclical demand weakness and its high price-to-book value of 2.6, which is at a decade-high [13][14]