Central Bank Insanity

The markets are preparing for a monster move.

It’s been an exciting couple of months, but despite all the action the S&P 500 has effectively gone nowhere since late August.

Whenever we break out of this range, the move will be explosive. 

The one stock I’m watching closely for signs of the move is Shopify (SHOP).

SHOP bottomed March 18^th (blue square) a full FIVE days before the broader market did on March 23^rd (purple square).

Put simply, SHOP lead the market by a wide margin out of the March bottom. Similarly, it peaked hours before the broader market did in early September.

Put simply, SHOP has been leading the market at every major turn for months.

So, what’s it saying now?

Despite the recent correction in stocks, SHOP is holding up well and remains close to the top of its consolidation range. If it can finally break that range with conviction, we’ll see a MAJOR bull run start in the broader market.

At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and other central banks are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.

We had the Tech Bubble in the ’90s.

The Housing Bubble in the mid-00s.

And now the Everything Bubble in 2020.

On that note, we’re putting together an Executive Summary on how to play this move.

It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.

This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The markets are preparing for a monster move.

It’s been an exciting couple of months, but despite all the action the S&P 500 has effectively gone nowhere since late August.

Whenever we break out of this range, the move will be explosive. 

The one stock I’m watching closely for signs of the move is Shopify (SHOP).

SHOP bottomed March 18^th (blue square) a full FIVE days before the broader market did on March 23^rd (purple square).

Put simply, SHOP lead the market by a wide margin out of the March bottom. Similarly, it peaked hours before the broader market did in early September.

Put simply, SHOP has been leading the market at every major turn for months.

So, what’s it saying now?

Despite the recent correction in stocks, SHOP is holding up well and remains close to the top of its consolidation range. If it can finally break that range with conviction, we’ll see a MAJOR bull run start in the broader market.

At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and other central banks are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.

We had the Tech Bubble in the ’90s.

The Housing Bubble in the mid-00s.

And now the Everything Bubble in 2020.

On that note, we’re putting together an Executive Summary on how to play this move.

It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.

This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The market will likely hit new all-time highs this week.

Stocks held support last week (green line in the chart below). We now have a bull flag forming on the 4-hour chart for the S&P 500 (blue lines in the chart below).

It’s incredible to be writing this: stocks roaring to new all-time highs multiple times after one of the sharpest most violent sell-offs in history hitting in March of this year.

Indeed, by the look of things, we’re going to see a massive stock bubble in the coming months.

And why not? The economy appears to be coming back strongly from the COVID-19 shutdowns. Last week we found out that retail sales rose 1.9% month over month (only 0.3% was expected).

And against this backdrop of growth, central banks and policymakers have unleashed a TSUNAMI of money printing.

Remember, to combat the economic fallout from the Great Financial Crisis of 2008 central banks printed $12 trillion between 2008 and 2016.

Well. they’ve printed more than HALF of this ($7 trillion) in the six months from April to September alone. Throw in stimulus programs from governments and the number balloons over $15 TRILLION.

Put another way, it previously took policymakers EIGHT years for to spend $12 trillion. They’ve already committed to spending MORE than this in less than EIGHT months.

Also, and this is key…between stimulus payments and central bank lending facilities directly to small businesses/ Main Street, much of this money is actually going straight into the economy.

In the U.S., we’ve already seen one stimulus program of $3 trillion. On top of this, the Fed has put over $1.6 TRILLION in actual real money into the U.S. economy in the form of credit facilities. Add that up are you’re talking about $5+ trillion in new money entering the economy this year.

And now Congress is talking about another stimulus program somewhere between $500 million and $1.8 trillion being funneled into the economy sometime in the next three months. That would put the total money printing for 2020 in the ballpark of $7 trillion.

Let’s put this into perspective. The U.S. economy is roughly $22 trillion in size. So, in the span of a single year, policymakers will have funneled an amount of money equal to nearly 33% of U.S. GDP directly into the economy.

This is how you get a MASSIVE bubble. As in the S&P 500 goes to 6,000 or higher in the next 12 months.

I realize that sounds insane. But remember, we’re talking about an amount of liquidity equal to 33% of the U.S. GDP being funneled into the economy in nine months.

As investors, our job is NOT to argue about what the market should do, it’s to make MONEY from what the market IS doing.

At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and other central banks are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.

We had the Tech Bubble in the ’90s.

The Housing Bubble in the mid-00s.

And now the Everything Bubble in 2020.

On that note, we’re putting together an Executive Summary on how to play this move.

It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.

This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Stocks will break above resistance (red line) today. 

The bullish falling wedge formation (blue lines) now has a confirmed breakout.

This increasingly looks like the next major leg up. Stocks will be reclaiming their bull market channel that has guided the markets since early April. 

This opens the door to a run to 3,600+ on the S&P 500.

At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and other central banks are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.

We had the Tech Bubble in the ’90s.

The Housing Bubble in the mid-00s.

And now the Everything Bubble in 2020.

On that note, we’re putting together an Executive Summary on how to play this move.

It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.

This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Stocks will break above resistance (red line) today. 

The bullish falling wedge formation (blue lines) now has a confirmed breakout.

This increasingly looks like the next major leg up. Stocks will be reclaiming their bull market channel that has guided the markets since early April. 

This opens the door to a run to 3,600+ on the S&P 500.

At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and other central banks are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.

We had the Tech Bubble in the ’90s.

The Housing Bubble in the mid-00s.

And now the Everything Bubble in 2020.

On that note, we’re putting together an Executive Summary on how to play this move.

It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.

This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Stocks are up slightly this morning, most likely due to President Trump’s rapid recovery from COVID-19. Remember, futures first plunged on Thursday night/ Friday morning when he announced he and the first lady had tested positive for COVID-19.

Despite all of the excitement, the market remains in a kind of “no man’s land” between resistance (red line) and support (green line). Until we break one of these lines with conviction, stocks are in a chop fest.

Stepping back from the day to day, the S&P 500 looks to be forming an inverse Head and Shoulders pattern. If we break above that neckline, the upside target is not all-time highs. By the look of things, we’ll know if this will be the case by the end of the week.

Why would this happen?

Because the Fed and other major central banks have gone “all in” on their efforts to create a stock market bubble.

Forget politics, forget social issues, forget all of that stuff. The one thing that matters to central banks is keeping the markets elevated.

At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and other central banks are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.

We had the Tech Bubble in the ’90s.

The Housing Bubble in the mid-00s.

And now the Everything Bubble in 2020.

On that note, we’re putting together an Executive Summary on how to play this move.

It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.

This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Stocks ripped higher yesterday. However, they ended the session near the lows at support (green line in the chart below). The overnight futures session is signaling another rally this morning, but until we take out overhead resistance (red line in the chart below) we’re stuck in no man’s land.

For certain a BIG move is coming. Momentum stocks suggest it will be UP.

Shopify (SHOP), one of the biggest momentum stocks in the market, has broken above one line of resistance already (lower red line in the chart below). It will be testing and possibly breaking a second line of resistance this morning (upper red line in the chart below).

This suggests the next move will be higher.

Tesla (TSLA) another Wall Street momentum darling will likely break above out of its triangle formation (blue lines in the chart below).

This too suggests the next move will be higher.

At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and other central banks are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.

We had the Tech Bubble in the ’90s.

The Housing Bubble in the mid-00s.

And now the Everything Bubble in 2020.

On that note, we’re putting together an Executive Summary on how to play this move.

It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.

This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The Fed is about to intervene in the markets.

The corporate bond market is once again coming under duress. The last two times this happened, the Fed announced a new monetary policy within days.

Junk bonds have broken below support.

Investment grade bonds are about to do the same.

This indicates that the $10 trillion corporate bond market is coming under duress.

The Fed has spent trillions of dollars propping up this market and other more senior debt instruments. Why would it suddenly decide to let them implode? 

So we can expect the Fed to announce a new monetary policy, or at the very least, stage a verbal intervention shortly.

At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and US government are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.

We had the Tech Bubble in the ’90s.

The Housing Bubble in the mid-00s.

And now the Everything Bubble in 2020.

On that note, we’re putting together an Executive Summary on how to play this move.

It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.

This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Leadership has changed in the markets.

Since the March lows, tech, specifically cloud-based tech has lead the markets higher. Companies like Square (SQ) have more than tripled in share price while the S&P 500 is up 40%.

However, in the last few weeks this has changed. Former market leaders like SQ or Shopify (SHOP) have been trading sideways.

Meanwhile, industrial plays like Freeport McMoran (FCX) and John Deere (DE) have barely corrected at all, soaring to new highs.

Why is this?

The market is sensing that the next major move will be driven by fiscal spending and the Trump administration’s coming infrastructure program.

Put another way, the COVID-19 lockdowns are ending, the rush into cloud/ remote working plays is ending, and the next major market move will be driven by government spending.

Those who get into this trend early could stand to make literal fortunes.

At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and US government are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.

We had the Tech Bubble in the ’90s.

The Housing Bubble in the mid-00s.

And now the Everything Bubble in 2020.

On that note, we’re putting together an Executive Summary on how to play this move.

It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.

This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Leadership has changed in the markets.

Since the March lows, tech, specifically cloud-based tech has lead the markets higher. Companies like Square (SQ) have more than tripled in share price while the S&P 500 is up 40%.

However, in the last few weeks this has changed. Former market leaders like SQ or Shopify (SHOP) have been trading sideways.

Meanwhile, industrial plays like Freeport McMoran (FCX) and John Deere (DE) have barely corrected at all, soaring to new highs.

Why is this?

The market is sensing that the next major move will be driven by fiscal spending and the Trump administration’s coming infrastructure program.

Put another way, the COVID-19 lockdowns are ending, the rush into cloud/ remote working plays is ending, and the next major market move will be driven by government spending.

Those who get into this trend early could stand to make literal fortunes.

At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and US government are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.

We had the Tech Bubble in the ’90s.

The Housing Bubble in the mid-00s.

And now the Everything Bubble in 2020.

On that note, we’re putting together an Executive Summary on how to play this move.

It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.

This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Stocks held their 50-DMA as expected last week. As I write this Monday morning, they are bouncing hard.

However, this doesn’t mean we’re out of the woods by any means. The technical damage from last week’s sell offs was significant. We’ve broken below support (green line). And the bulls have failed to mount any significant energy to get stocks back into an uptrend.

What does this mean?

That we’re likely to see more chopping/ sideways action for some time. The S&P 500 has had two such periods since the March bottom. I’ve highlighted them in blue rectangles in the chart below.

In terms of price, I wouldn’t expect stocks to break down a lot lower than where they are… but similarly I wouldn’t expect us to see a sustained rally either. Instead we’re like to see a lot of ups and downs for the next few weeks into October.

However, if things begin to get ugly I expect the Fed to intervene aggressively.

At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and other central banks are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.

We had the Tech Bubble in the ’90s.

The Housing Bubble in the mid-00s.

And now the Everything Bubble in 2020.

On that note, we’re putting together an Executive Summary on how to play this move.

It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.

This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Stocks held their 50-DMA as expected last week. As I write this Monday morning, they are bouncing hard.

However, this doesn’t mean we’re out of the woods by any means. The technical damage from last week’s sell offs was significant. We’ve broken below support (green line). And the bulls have failed to mount any significant energy to get stocks back into an uptrend.

What does this mean?

That we’re likely to see more chopping/ sideways action for some time. The S&P 500 has had two such periods since the March bottom. I’ve highlighted them in blue rectangles in the chart below.

In terms of price, I wouldn’t expect stocks to break down a lot lower than where they are… but similarly I wouldn’t expect us to see a sustained rally either. Instead we’re like to see a lot of ups and downs for the next few weeks into October.

However, if things begin to get ugly I expect the Fed to intervene aggressively.

At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and other central banks are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.

We had the Tech Bubble in the ’90s.

The Housing Bubble in the mid-00s.

And now the Everything Bubble in 2020.

On that note, we’re putting together an Executive Summary on how to play this move.

It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.

This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:

https://phoenixcapitalmarketing.com/TEB.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research