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Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye U.S. Macro analyst Christian Drake. Click here to learn more. 

"... In the Chart of the Day below we show corporate profit growth vs forward year returns in the S&P500. 

 

The takeaway is straightforward:  While 2+ consecutive quarters of declining corporate profits haven’t always signaled recession, such occurrences have always signaled stock market crashes in the subsequent year."

CHART OF THE DAY: This Indicator (Always) Signals 20%+ Stock Market Crash - EL profits