False Breakout

May

2023

There’s Something “Unusual” About This Market Rally… I Think I Know What It Is

By Graham Summers, MBA

The stock market sure look bullish, doesn’t it?

The S&P 500 has managed to start turning its 200-day moving average (DMA) upwards. This is a significant development is at it indicates that the intermediate to long-term trend is on the verge of becoming “up.”

As positive as this seems, beneath the surface of the markets there are a lot of glaring divergences developing.

Divergences occur when two assets that typically trade in line with each other start to diverge. These kinds of developments tell us that something unusual is happening in the market. Sometimes it’s not a bit deal. Other times, like in late 2007 or just before the shut-downs in 2020, these divergences serve as a warning that a crash or black swan event is about to hit.

On that note, let’s consider some of the more glaring divergences taking place today.

The Retail ETF (XRT) tracks the performance of 90 retailers in the U.S. As such it serves as a decent proxy for the consumer. And XRT has NOT participated in this rally at all. In fact, it’s rapidly approaching its October 2022 lows.

There are other, similar divergences all over the markets.

Tech stocks usually trade in line with inflation-adjusted Treasuries. The reason for this is that Tech is priced based on where “real,” or inflation adjusted, Treasury yields are trading. When yields are relatively low, investors pile into tech because it is a high growth sector.

With that in mind, there is a large divergence between tech stocks and inflation-adjusted Treasuries today. Someone is “wrong” here.

These are just two examples of major divergences, but there are literally over a dozen happening in the stock market right now. Something is very, very “off” about this market rally in stocks.

And I think I know what it is.

What’s happening is that the overall market is being pushed higher by a handful of large tech companies. Because these companies account for nearly 25% of the S&P 500’s overall weight, their outperformance is forcing the overall market to move higher despite all these divergences.

Indeed, when we strip out the effect of these companies with an “equal weight” stock market index, this dynamic becomes clear. MOST of the companies in the S&P 500 are down. Only a small handful are up. They just happen to be the largest companies both in terms of size and in terms of index weighting.

How will this play out?

Sometimes divergences resolve with the trailing assets playing “catch up.” However, when there are so many divergences occurring across so many different areas of the market, this is unlikely.

What’s far more likely is that the markets nose-dive in the near future. Many analysts will tell you “ no one saw this coming!” but now you know better.

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:

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Mar

2023

Are We About to See a Full-Scale Banking Crisis?

By Graham Summers, MBA

Something doesn’t add up.

The Fed and Treasury keep telling us everything is fine… but the Fed has just expanded its balance sheet by $400+ billion in the span of two weeks.

We haven’t seen money printing like this since the depth of the 2020 meltdown. The Fed has erased 2/3rds of its 9 month long Quantitative Tightening in 14 days!

Despite these emergency loans/ access to credit, the regional banking ETF is right back near its panic lows.

Even stranger, several of the big banks are collapsing in share price as well. Wells Fargo, Bank of America, and Citigroup are all back at their October lows.

Looking at this, it appears something MAJOR is brewing behind the scenes. Banks might less than 14% of the S&P 500 weighting, but they account for something like 70% of all mortgages and 60% of all consumer loans.

Put simply, if this sector is in major trouble, it’s going to have a MAJOR effect on the economy.

Indeed, from a BIG PICTURE perspective my proprietary Crash Trigger is now on the first confirmed “Sell” signal since 2008.

This signal has only registered THREE times in the last 25 years: in 2000, 2008 and today.

If you’ve yet to take steps to prepare for what’s coming, we just published a new exclusive special report How to Invest During This Bear Market.

It details the #1 investment to own during the bear market as well as how to invest to potentially generate life changing wealth when it ends.

To pick up your FREE copy, swing by:

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PS. Our new investing podcast Bulls, Bears & BS is officially live and available on every major podcast application (Apple, Spotify, etc.)

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Mar

2023

The Fed is Back to Printing Money… With Inflation at 6%

By Graham Summers, MBA

The Fed just gave out over $300 BILLION in single week.

See for yourself: the Fed’s balance sheet has erupted higher, erasing over HALF of its Quantitative Tightening (QT) efforts. Again, we are talking about $300+ BILLION in a single week.

Now, technically much of this ($164 billion to be exact) came in the form of loans to banks. The banks will have to pay this back, so it’s not quite the same as Quantitative Easing (QE). Regardless, the key point is that the Fed is NO LONGER shrinking its balance sheet… instead it is printing money. And not a little bit, but $300+ billion in a single week.

To put that into perspective, it’s the equivalent of more than TWO MONTHS’ worth the Fed’s emergency QE program that it ran in response to the pandemic. And again, the Fed did this in just FIVE DAYS.

What does this mean?

First and foremost, that something VERY BAD is going on behind the scenes in the U.S. banking system. But more importantly for us as investors, that the next round of bailouts/ easing/ reflating the financial system is here.

This won’t end well.

The Silicon Valley Bank bailout is the Bear Stearns moment for this bubble. Lehman is coming… as is AIG… and this entire mess won’t end until the stock market hits levels most cannot even imagine today… to the downside

Indeed, from a BIG PICTURE perspective my proprietary Crash Trigger is now on the first confirmed “Sell” signal since 2008.

This signal has only registered THREE times in the last 25 years: in 2000, 2008 and today.

If you’ve yet to take steps to prepare for what’s coming, we just published a new exclusive special report How to Invest During This Bear Market.

It details the #1 investment to own during the bear market as well as how to invest to potentially generate life changing wealth when it ends.

To pick up your FREE copy, swing by:

https://phoenixcapitalmarketing.com/BM.html

Mar

2022

This Is the Only Trigger I Know Of That Predicted the 2020 Crash… What’s It Saying Today?

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.

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

https://phoenixcapitalmarketing.com/stockmarketcrash.html

Apr

2020

Stocks, Treasuries, and the VIX Suggest a Pullback… But Will It be another Crash?

The rally is now in serious trouble.

Stocks staged a sharp bounce after the early to mid -arch meltdown. However, they’re running into trouble at the 50% retracement level (2,790 on the S&P 500).

This is bad news. Typically, during a V-recovery in the markets, stocks should have little if any difficulty in tracing 50% of their initial decline.

We get a similar warning from the ratio between the S&P 500 and Treasuries. This ratio is struggling at resistance which suggests the system is moving towards a “risk off” environment.

And then there’s the VIX which typically moves higher when stocks collapse. The VIX is forming a bullish falling wedge formation which could resolve in a big move higher.

Add it all up and the financial system is giving us multiple warnings that we could see another sharp drop lower in the markets.

On that note, if you’re worried about weathering a potential market crash, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Today is the last day this report will be available to the public.

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

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best RegardsParagraph

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Apr

2020

Stocks Are Struggling… Will We Revisit the Lows?

The rally is now in serious trouble.

Stocks staged a sharp bounce after the early to mid -arch meltdown. However, they’re running into trouble at the 50% retracement level (2,790 on the S&P 500).

This is bad news. Typically, during a V-recovery in the markets, stocks should have little if any difficulty in tracing 50% of their initial decline.

We get a similar warning from the ratio between the S&P 500 and Treasuries. This ratio is struggling at resistance which suggests the system is moving towards a “risk off” environment.

And then there’s the VIX which typically moves higher when stocks collapse. The VIX is forming a bullish falling wedge formation which could resolve in a big move higher.

Add it all up and the financial system is giving us multiple warnings that we could see another sharp drop lower in the markets.

On that note, if you’re worried about weathering a potential market crash, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Today is the last day this report will be available to the public.

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

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best RegardsParagraph

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Apr

2020

Three Charts Every “Buy the Dip” Investor Needs to See Today

The rally is now in serious trouble.

Stocks staged a sharp bounce after the early to mid -arch meltdown. However, they’re running into trouble at the 50% retracement level (2,790 on the S&P 500).

This is bad news. Typically, during a V-recovery in the markets, stocks should have little if any difficulty in tracing 50% of their initial decline.

We get a similar warning from the ratio between the S&P 500 and Treasuries. This ratio is struggling at resistance which suggests the system is moving towards a “risk off” environment.

And then there’s the VIX which typically moves higher when stocks collapse. The VIX is forming a bullish falling wedge formation which could resolve in a big move higher.

Add it all up and the financial system is giving us multiple warnings that we could see another sharp drop lower in the markets.

On that note, if you’re worried about weathering a potential market crash, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Today is the last day this report will be available to the public.

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

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best RegardsParagraph

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Apr

2020

Are the Markets Signaling Another Leg Down is Here?

Wall Street begins reporting earnings for the first quarter this week.

Everyone expects earnings will be a disaster. After all, the economy first slowed, then ground to a complete halt last quarter. The issue now, as far as traders are concerned, is whether the results surprise to the downside, meaning, things are in fact worse than everyone already assumes.

The markets are preparing for their next major move.

The S&P 500 is struggling to break above the 50% retracement of its collapse. If it cannot break above here and continue to rally, then we could see another collapse.

Similarly, Treasuries, which are a safe haven, remain extremely close to their all-time highs. Given that things are supposed to be improving… shouldn’t bonds be breaking down more? Are these bonds warning us there’s more trouble ahead?

On that note, if you’re worried about weathering a potential market crash, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Today is the last day this report will be available to the public.

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

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best RegardsParagraph

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Apr

2020

Stocks Are Struggling While Bonds Are Near All-Time Highs= Another Drop Coming?

Wall Street begins reporting earnings for the first quarter this week.

The markets are preparing for their next major move.

The S&P 500 is struggling to break above the 50% retracement of its collapse. If it cannot break above here and continue to rally, then we could see another collapse.

On that note, if you’re worried about weathering a potential market crash, we’ve reopened our Stock Market Crash Survival Guide to the general public.

Today is the last day this report will be available to the public.

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

http://phoenixcapitalmarketing.com/stockmarketcrash.html

Best RegardsParagraph

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Feb

2020

The big development in the last week has been that institutional sellers have hit the market.

For the last six months stocks have gradually grinded higher with every dip being both small in size and aggressively bought. This was a clear signal that institutions were on the sidelines.

No longer, the overwhelming selling pressure of the last few days has been the product of institutions selling in a big way.

The S&P 500 has smashes through multiple lines of support. As I write this it is hanging to support around 3,120 by a thread. If this goes, we could easily do a final flush to 3,025.

That is right around the 50-week moving average, which has acted as a magnet for sell-offs during the last few years.

Many clients are asking us…Is the bull market over?

Consider that the economy continues to grow, and the Fed continues to ease. Unless one of those two things change, then this is a terrific buying opportunity just as it was throughout 2019.

But what about the Coronavirus?

During the Ebola scare of 2014, stocks dropped 7%. They then staged a V-shaped recovery and ROARED higher.

During the SARS scare of 2003, stocks fell 14%. They then staged a V-shaped recovery and ROARED higher.

As I write this today, stocks are already down over 8%.

Is coronavirus worse than Ebola or SARS? I have no idea. But unless it’s EXPONENTIALLY worse, stocks should be bottoming soon.

After all, what are the odds President Trump is going to let his beloved stock market go down the toilet during an election year?

I DO NOT care about politics. You can hate President Trump or you can love him. That’s 100% up to you.

But the reality is that under the Trump administration the stock market is giving us a once in a lifetime opportunity to GET RICH from our investments.

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Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Feb

2020

The market got hit yesterday in a big way, but the selling was well contained.

Traders have become way too conditioned to the market doing nothing but going up. As a result, we are in the ridiculous state in which even a single big down day has people talking about crashes.

Statistically speaking, stocks have two days like yesterday (down 3%) every year. Even after yesterday, stocks are only a mere 4%-5% off their ALL TIME HIGHS.

And traders are talking about crashes!

The fact is that we might have a bit more downside. Breadth still has a little ways to go before it finds support.

However, stocks have already overdone it falling far more than breadth. Over the last year, anytime stocks broke down this much relative to breadth, it triggered a “V” shaped recovery soon after.

Moreover, the big four tech stocks, which comprise over 11% of the market, all held support yesterday.

Microsoft (MSFT)

Apple (AAPL)

Amazon (AMZN)

Facebook (FB)

As I said before, the selling was contained and orderly. There was no sign of a crash. And while stocks could fall a bit further from here, we’re getting close to the “buy zone” in terms of market internals.

At the end of the day, the odds are EXTREMELY low that President Trump is going to let his beloved stock market crash during an election year.

Which is why we can all but guarantee a MASSIVE Fed intervention is coming. And when it does the stock market will roar higher.

I want to be clear here.