The winning streak for stocks broke yesterday, with stocks posting a small drop (just 0.3%). We had forecast a summer rally a few weeks back and sure enough stocks have put in a 10-day winning streak.
The important line to watch is lined out below. Bernanke’s verbal intervention managed to kick off a rally when he spoke after the market was closed on Wednesday. But if we drop back below this line again, there’s not a whole lot he can do, after all, he’s promised to maintain QE… which he already had in place.
The single biggest problem occurring today is that the economy is receding sharply while stocks continue to rally hard. The consumer is the economy in the US. And real average hourly wages adjusted for inflation today are still below June 2009 levels.
So, we have a jobless recovery (the unemployment ratio hasn’t budged) an income-less recovery (real hourly wages remain below June 2009 levels), and the yet somehow we have a “recovery” that will result in GDP taking off any day now?
Sounds a bit like 2007-2008 doesn’t it?
Stocks may hit new highs, but this rally has all the hallmarks of a blow off top, coming at the final stage of a bubble. Indeed, stocks have not been this overextended in over 20 years… that includes the 2007 peak. Soon after we reached that point… we then plunged into one of the worst market Crashes of all time.
By today’s metrics, this would mean the S&P 500 falling to 1,300 then eventually plummeting to new lows.
This is not doom and gloom. This is a fact. The Fed has created an even bigger bubble than the 2007 one.
The time to prepare for this is not once the collapse begins, but NOW, while stocks are still rallying. Stocks take their time moving up, but when they crash it happens VERY quickly.
With that in mind, I’ve already urged my Private Wealth Advisory clients to start prepping. We’ve opened six targeted trades to profit from the stock bubble bursting.
We’ve also taken care to prepare our finances and our loved ones for what’s coming, by following simple easy to follow steps concerning our savings, portfolios, and personal security via my Protect Your Family, Protect Your Savings & Protect Your Portfolio reports.
I’ve helped thousands of investors manage their risk and profit from market collapses. During the EU Crisis we locked in 72 straight winning trades and not one loser, including gains of 18%, 28% and more.
In fact, we’re currently on another winning streak having locked in nine winning trades in the last two months, including gains of 21% and 25%.
All for the small price of $299: the annual cost of a Private Wealth Advisory subscription.
To take action to prepare for what’s coming… and start taking steps to insure that when this bubble bursts you don’t lose your shirt.
Yours in Profits,