The weirdest market signal you'll see all year

Most research desks stare at earnings models. We watch scrap yards.

Sounds insane. It works.

Here’s the deal. One of our stranger indicators tracks the price of scrap steel — the stuff piled up in junkyards — plus a few boots-on-the-ground checks. When mills get busy and scrap gets pricey, the whole industrial economy is heating up. When it cools, trouble is coming.

Last December, that signal lit up green.

The steel names it flagged — think Nucor (NUE) and Steel Dynamics (STLD) — went on to run more than 40% in six months.

They peaked on June 12.

This morning, the same signal did something it hasn’t done all year.

It turned red.

Scrap prices are set to drop. Mills are idling furnaces. And the last time our read moved this sharply, the stocks it flagged moved a lot right after.

We’re not going to spill the whole thing here — the full breakdown, the names on our radar, and exactly what we’re doing about it is in the insight.

Read the full insight — The Scrap Yard Signal Just Turned Red

— The LikeFolio Team

P.S. The scrap signal has a track record. The last flip was worth watching. This one just happened.