Month: March 2022

By Graham Summers, MBA

Thus far this week, we’ve been noting an extremely odd development. And it’s left strategic investors feeling uneasy to say the least.

Stocks, the asset class most investors pay attention to, have erupted higher. Indeed, if you only look at stocks by themselves… everything looks great right now.

The S&P 500 has gone straight up, rising well above both its 50-day moving average (DMA) and its 200-DMA. And who would have thought we’ve be within 4% of new all time highs!

Meanwhile, beneath the surface, the bond market is flashing major warning signs.

“So what?” thinks the stock investor, “bonds are boring. They only rally 2% on a big day. Stocks are up 10% and some stocks as much as 50% in a week!”

Bonds are the bedrock of our current financial system. Their yields represent the “risk free rate” of return against which every asset class, including stocks, are valued. So if bonds are signaling trouble, the entire financial system is in trouble.

The yield curve, which is a means of measuring risk in the bond market, is now inverted. This is a MAJOR recession signal that has predicted every recession since the mid-1970s. This includes the brief, but horrific C.O.V.I.D.-19 recession of 2020. And yes, bonds somehow “knew” about that in advance.

Again, this trigger has hit before every recession going back 50 years. And it just hit again.

What are the odds it’s different this time?

Look, I get it, stocks are up… a lot. Some stocks like Tesla (TSLA) or AMC Entertainment Holdings (AMC) are up 50% or more in just a week! So who cares about boring old bonds?

Everyone should… especially after bonds predicted the 2020 recession and crash… something fewer than 1% of investors got right. And the fact so few investors are payng attention to bonds today is enough to make you wonder if another, equally ugly situation is about to unfold.

Bonds terrified, but stocks in la la land? This is the kind of environment in which crashes happen.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

By Graham Summers, MBA

Do you feel that?

I’m sure on some level you do…

Something isn’t right about this rally in stocks. Something doesn’t add up. In fact, something very bad is brewing in the financial system.

Stocks have erupted higher over the last week, rising 9%.

However, beneath the surface, something truly incredible is happening. In fact, it’s horrifying.

I’m talking about the bond market.

The media likes to focus on the stock market because stocks are “sexy” and grab the public’s attention. However, the reality is that the stock market is one of the smallest asset classes out there. Globally the stock market is about $89 trillion.

By way of comparison, globally the debt markets are over $281 trillion. When you include derivatives that trade based on bond yields (debt interest payments) the amount balloons up over $750 trillion.

Which is why, the complete carnage occurring in bonds should terrify everyone. Across the board, bond prices are collapsing while bond yields skyrocket.

The yield on the 5- Year U.S., Treasury is up 100 basis points this month. 100 basis points. It rose over 20 basis points last week alone.

The yield on the all-important 10-Year U.S. Treasury (the most important bond in the world) is also exploding higher. It’s up almost 75 basis points this month, roaring higher by 13 basis points last week alone.

I realize most of you likely don’t follow the bond market…  but you have to remember that  our current financial system is debt-based.

The $USD is not backed by anything finite, and U.S. Treasuries are the senior most asset class owned by the large financial institutions. They are literally the bedrock of our current financial system.

And the bedrock is cracking in a big way.

Imagine the impact it would have on a skyscraper if the bedrock, which supports its foundation began to crack… that’s where we are with the financial system today.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

By Graham Summers, MBA

The bottom is in.

As everyone knows… the Fed has saved the day again!

On Tuesday, Fed Chair Jerome Powell announced that the Fed is NOT going to raise rates anymore. It’s not going to shrink their balance sheet either. And best of all… inflation which entered the financial system for the first time in 40 years… is actually disappearing and will soon be gone!

That’s what stocks think, isn’t it? After all, they’ve rallied over 8% in a single week.

Heck, Tesla (TSLA) is up over 35% in one week’s time!

Oh wait… the Fed didn’t say any of that. 

In fact, Jerome Powell said the following on Tuesday:

1) Inflation is MUCH too high.

2) If the Fed finds that raising rates by 0.25% is not enough, it will begin raising by 0.5% at every Fed meeting.

3) If the Fed finds that it is not curbing inflation adequately, it is willing to overshoot to the upside with rate hikes.

So, the Fed is going to be a LOT MORE aggressive than people think. If anything, it’s warning the markets that it’s going to have to raise rates a LOT and quite QUICKLY.

Here’s what happened the last two times the Fed did this. I’m sure the third time’s the charm!

If you believe the Fed will somehow be able to stop inflation without blowing up the markets, please stop reading now.

However, if you’re a clear-thinking investor, someone who doesn’t fall for hype and nonsense… someone who is serious about using the markets to produce extraordinary gains… you should download our Stock Market Crash Survival Guide now.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

The stock market is clinging to the ledge of a cliff.

The weekly chart of the NASDAQ is truly. Tech stocks have been trading in a wide range since stocks peaked in November 2021. And they are just BARELY clinging to the lower line of this range on a weekly basis.

Why is this a big deal? Because if the NASDAQ closes below the lower line of this range on a weekly basis, it opens the door to an unwind of most if not ALL of the COVID-19 bull market. This would mean a 40%-50% collapse from current levels.

And all of this is happening right as the Fed ends QE and starts raising rates. Meanwhile, the economy is rolling over and the tech-heavy market is barely able to rally.

Sounds like the recipe for a crash to me!

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

By now, you’re no doubt getting pretty worried about the markets.

After all, why wouldn’t you?

Russia has invaded Ukraine which has massive implications for natural resources. Oil is over $120 a barrel. The stock market is already down over 10% from its recent highs.

It’s enough to stress anyone out!

Well, unfortunately we now need to add the following: the U.S. will likely enter a recession late this year or early in the next.

According to the Fed’s research, the most accurate predictor of a recession is the 10-year/ 3 month U.S Treasury yield curve, or the difference between the yield on the 10-Year U.S. Treasury and the yield on the 3-month U.S. Treasury.

Whenever this yield curve breaks below 0%, the U.S. has entered a recession. I’ve identified this level on the chart below.

The bad news today is that this yield curve is currently rolling over in a big way.

As I write this, it’s about to take out its upward trendline (red line in the chart below). This would mean that the yield curve is no longer trending in a positive manner but is heading downwards to the dreaded ZERO that predicts a recession.

Put another way, a break of this level would almost assuredly trigger a yield curve inversion… which would mean a recession is just around the corner.

Please note, the last two recessions triggered stock market crashes. The yield curve inverted a mere six to nine months before the crash hit. This means we can expect a full blown crash some time later this year or early in the next

You’ve been warned.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Three weeks ago, I told our clients that I believed the stock market would act in such a way as to induce the greatest amount of suffering to the greatest number of investors.

This meant the market trading in a “chopping” fashion, moving in a large range designed to hurt bulls and bears alike.

In simple terms, when stocks get to the top of the range, the bulls will get excited only to see stocks roll over and drop back down. And similarly, when stocks get to the bottom of the range, the bears will get excited, only to then see stocks rally hard.

Indeed, this whole pattern since the start of the year has been reminiscent of the late-2018 market collapse. That represents the last time the Fed attempted to normalize policy, only to backtrack once something “broke.”

That pattern was:

1. An initial leg down
2. Several weeks of chop
3. A final puke to new lows.

In chart form, it looked like this:

In terms of today’s market, the first leg down occurred in late January. We are now 3-4 weeks into the “chop” which means the final puke to new lows is just around the corner.

High yield credit is warning us about this in a big way.

So is breadth.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Russia’s invasion of Ukraine has laid bare all the misguided, naïve policies our “leaders” have foisted upon us in the last 18 months.

Among the more foolish policies enacted by U.S. policymakers is the idea that the U.S. should NOT be energy independent but should rely on outside sources for oil.

Within days of taking office, President Biden ended the development of the Keystone XL Pipeline while putting an indefinite pause on new oil and natural gas leases on public lands.

Months later he was asking OPEC to increase production of oil because oil and gasoline prices skyrocketed. Thus far, gas is up over 90% during the Biden Presidency, while oil is close behind at 80%.

Maybe we shouldn’t rely on countries that benefit from higher oil prices for our energy needs? Maybe those Executive Orders weren’t such a good idea? Maybe we should have people running our energy policy who actually know how many barrels of oil the U.S. consumers per day?

The icing on this cake of incompetence is the fact that the U.S. is directly financing Russia’s invasion of Ukraine. Russia supplies 7% of the U.S.’s energy needs. We are literally sending money to Putin every single day of the week… while calling him a monster. Maybe we should… stop buying oil from him!?!

As misguided as the Biden White House has been about energy policy, Europe’s leaders make it looks a bunch of geniuses. To that effect, Europe has been shutting down nuclear power plants and other sources of domestic energy production for years… all while signing deals with Vladimir Putin to supply its energy needs.

Currently Russia supplies ~40% of Europe’s gas and more than 25% of its oil.

How insane, or corrupt, or simply ignorant do you have to be to shut down domestic energy production and hand your energy needs over to Vladimir Putin? A kindergartener could tell you this was a dumb idea. But Europe’s elites signed off on it.

The end result?

Oil is above $100 a barrel for the first time since 2014. And there is little if any signs it’s not going much higher.

This is going to trigger a global recession… which in turn will trigger a market crash.

The world economy which was already fragile due to roaring inflation and supply chain issues will now be contending with an energy crisis. How do you think the economy will handle $100 oil when inflation was already at major problem when oil was at $80 a barrel?

Stocks know what’s coming, as they have already broken below their 10-month moving average (MMA). The last two times this happened, the market ended up testing its 40-month moving average soon after (see the purple circles below).

That means the S&P 500 falling to 3,450 or so.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guide can show you how.

Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).

To pick up your copy of this report, FREE, swing by:

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards,