By Graham Summers, MBA

Try as they might, the bears simply couldn’t get it done last week. 

The S&P 500 spent a few days chopping around its 200-day moving average (DMA) before spiking higher on Friday. Much of this late week rally was short covering, but the fact remains that sellers simply didn’t have what it took to push stocks any lower.

Indeed, the biggest news as far as stocks were concerned was the fact that the tech-heavy NASDAQ simply refused to take out support at 13,000. 

Tech is a long-duration sector of the market… meaning it is heavily influenced by long duration bonds. The reason for this is that your typical tech start-up will take years before it brings a product or service to market and starts generating cash flow. So when you’re modeling a tech company’s future cash flows, you need to be thinking five years out or more. This means comparing a tech company’s future earnings against what you’d earn from owning a risk-free U.S. Treasury over the same time period.

Simply put, the tech sector is heavily influenced by what long-duration bonds do… which is why it’s truly astonishing that the NASDAQ has refused to break down despite the fact the yield on the 10-year U.S. Treasury spiked to new highs. The fact that stock market bears failed to crush tech is really quite bullish and a significant “tell” for the markets.

With all of this in mind, it’s quite possible stocks bottomed last week or will bottom this one. I remain concerned about a number of risks to the markets, but we have to respect price action. And price action tells us that stocks are strong in spite of many issues. 

For more market insights and analysis, join our free daily market commentary Gains Pains & Capital. You’ll immediately start receiving our Chief Market Strategist Graham Summers, MBA’s briefings to your inbox every morning before the market’s open. Since 2015, Graham has shown investors a win rate of 75% meaning they made money on three out of every four positions closed.

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By Graham Summers, MBA

Last week, I warned you not to trust the positive economic data being put out concerning the U.S. economy.

The reasons for my warning were simple: the data was bunk, made up, and of no real value.

By quick review, ALL of the jobs that were supposedly created in October 2022 were not real jobs; they were created in a government spreadsheet via various accounting gimmicks… not in the economy. And yes, I’m talking about all 261,000 of them.

The inflation data that everyone was so excited about last week was also NOT positive.

Month over Month inflation was 0% in July, 0.1% in August, and 0.4% in September. With that in mind, I ask… “how was a month over month reading of 0.4% in October a great thing? Technically the inflation data was BETTER during the summer!!!”

Moreover, the items that DECLINED in price… allowing the beancounters to make inflation look better than it is, were used cars and trucks, medical care, apparel, and airline fare.

By way of contrast, shelter, gas and food prices all increased.

Again… how is any of that good for the economy?

I realize it might be difficult to believe me here. After all, 99% of mainstream economists and financial media talking heads are saying the exact opposite: the economy is doing fine and inflation is coming down.

So, with that in mind, I ask you to take a look at the following data points. What do they tell you about the TRUE status of the U.S. economy?

· Juul lays off ~1/3rd of its workforce.

· Redfin lays off 13% of its staff.

· Meta to fire 13% of its workforce.

· Twitter lays off ~50% of its workforce.

· Snap lays off 20% of its employees.

· Wayfair: lays off 10% of its corporate team.

· Microsoft fires 1,000 workers.

· Disney to begin layoffs, targeted hiring freeze.

· Re/Max to fire 17% of its workforce.

· Compass to layoff 10% of its workforce.

Let’s be blunt here… corporations implement major layoffs like this during only one kind of economic environment: a recession.

And what impact do you think a recession is going to have on the stock market?

I’ll detail in tomorrow’s article. For now, the key item to note is that the Everything Bubble has burst.

On that note, we are putting together an Executive Summary outlining how to invest in this new bearish environment.

It will be available exclusively to our clients. If you’d like to have a copy delivered to your inbox when it’s completed, you can join the wait-list here.

https://phoenixcapitalmarketing.com/TEB.html

You’ve got to hand it to the manipulators, they managed to get stocks almost to their former highs in a matter of days.

However, underneath the surface, internals are calling, “BS.”

High yield credit, which bottomed first and lead stocks higher has actually peaked and begun rolling over two days ago.

Breadth is also no supporting this move at all. If we were going by that metric, stocks would be still be down near the 4,400 on the S&P 500.

So, what happened here?

What happened is “someone” manipulated the markets higher, and this forced hedge funds to panic and cover their shorts. When you short a stock, you must buy it back at some point. And hedge funds have been doing this by the truck load over the last 48 hours

Did it work?

The markets are red again this morning. This is always the problem with manipulations… they only work for a time.

It is HIGHLY likely another bloodbath is coming to the markets.

The losses will be staggering.

And it’s just the beginning. It’s quite possible the markets are entering a prolonged BEAR MARKET… a time in which stocks lose 50% or more over the course of months.

The coming bust is going to be life-changing for many people. Most will lose much if not everything. But a small number of investors will generate LITERAL FORTUNES.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan 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

The stock market manipulations are getting even more desperate.

On Friday I noted that the only thing holding up the stock market was abject manipulation. As I noted then, financial institutions do NOT attempt to move markets. In fact, the traders charged with executing these institutions’ trades are graded based on their ability to buy and sell large chunks of stocks without moving the tape.

Which is why we knew that no real investor was responsible for the move that occurred Thursday morning. I’m talking about the move that pushed stocks up from 4,506 to 4,566 Thursday morning in the span of a few minutes on no news.

That was Thursday. But on Friday, the manipulation became even more extreme. This time around, the manipulators desperately forced stocks higher during the final 15 minutes of trading to end the week at a better level. You can see it here:

No real investor waits until 3:45PM to suddenly panic buy stocks. This is egregious manipulation. And it shows us that the manipulators are becoming increasingly desperate.

Why?

Breadth, which leads the broader market, is telling us the S&P 500 should be down at 4,300 (stocks are at 4,500 right now). Also note that whereas stocks bounced nicely last week, breadth was already revisiting the lows.

In simple terms, the signs are clear: another bloodbath is coming. The markets will soon be a sea of red again. And the losses will be staggering.

And it’s just the beginning. It’s quite possible the markets are entering a prolonged BEAR MARKET… a time in which stocks lose 50% or more over the course of months.

The coming bust is going to be life-changing for many people. Most will lose much if not everything. But a small number of investors will generate LITERAL FORTUNES.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan 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,

The only thing holding the stock market up is blatant manipulation.

Financial institutions do NOT attempt to move markets. In fact, the traders charged with executing these institutions’ trades are graded based on their ability to buy and sell large chunks of stocks without moving the tape.

Which is why we know that no real investor is responsible for a move like this:

“Someone” or “someones” pushed stocks up from 4,506 to 4,566 yesterday morning in the span of a few minutes. No major news item or development hit the tape during this time. This was abject manipulation by someone trying to force stocks higher.

It makes you wonder what they’re afraid of…

Perhaps they’re afraid of the fact that stocks are in the single largest bubble in history… a bubble so frenzied with insane speculation that it makes the Tech Bubble look tame by comparison?

Perhaps this “someone” is concerned that the Fed is ending its monetary easing… the same monetary easing that has provided over $4 trillion in liquidity to the system since March 2020?

Perhaps this “someone” is also worried that the federal government is no longer able to provide $5 trillion in fiscal stimulus to prop up the system.

Or perhaps the “someone” is worried that a stock market crash would make the Biden administration look even worse when its polling is already in the toilet.

Whatever the reason, “someone” is intent on stopping the markets from imploding. Meanwhile, hedge funds, corporate insiders, and smart money are all selling the farm.

And they’re selling the farm to individual investors… who have borrowed more money to buy stocks than at any point in history.

So let’s review.

1) The Fed is ending its liquidity schemes.

2) Uncle Sam is ending his fiscal stimulus schemes.

3) Hedge Funds and corporate insiders are selling the farm.

4) Individual investors have borrowed a RECORD amount of money to buy stocks.

Guess who’s going to get taken to the cleaners on this?

Let me be blunt here, if you’re not taking steps to prepare for what’s coming, NOW is the time to do so.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan 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,

The only thing holding the stock market up is blatant manipulation.

Financial institutions do NOT attempt to move markets. In fact, the traders charged with executing these institutions’ trades are graded based on their ability to buy and sell large chunks of stocks without moving the tape.

Which is why we know that no real investor is responsible for a move like this:

“Someone” or “someones” pushed stocks up from 4,506 to 4,566 yesterday morning in the span of a few minutes. No major news item or development hit the tape during this time. This was abject manipulation by someone trying to force stocks higher.

It makes you wonder what they’re afraid of…

Perhaps they’re afraid of the fact that stocks are in the single largest bubble in history… a bubble so frenzied with insane speculation that it makes the Tech Bubble look tame by comparison?

Perhaps this “someone” is concerned that the Fed is ending its monetary easing… the same monetary easing that has provided over $4 trillion in liquidity to the system since March 2020?

Perhaps this “someone” is also worried that the federal government is no longer able to provide $5 trillion in fiscal stimulus to prop up the system.

Or perhaps the “someone” is worried that a stock market crash would make the Biden administration look even worse when its polling is already in the toilet.

Whatever the reason, “someone” is intent on stopping the markets from imploding. Meanwhile, hedge funds, corporate insiders, and smart money are all selling the farm.

And they’re selling the farm to individual investors… who have borrowed more money to buy stocks than at any point in history.

So let’s review.

1) The Fed is ending its liquidity schemes.

2) Uncle Sam is ending his fiscal stimulus schemes.

3) Hedge Funds and corporate insiders are selling the farm.

4) Individual investors have borrowed a RECORD amount of money to buy stocks.

Guess who’s going to get taken to the cleaners on this?

Let me be blunt here, if you’re not taking steps to prepare for what’s coming, NOW is the time to do so.

For those looking to prepare and profit from this mess, our Stock Market Crash Survival Guidecan 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,

By Graham Summers, MBA

Stocks are bouncing again because investors have been trained by the Fed to “buy the dip” since the March 2020 lows.

So, traders are buying this one.

However, there is a big difference between this recent drop in stocks and the others.

This time around, the Fed has indicated it is NOT going to start easing again. In fact, Fed Chair Jerome Powell made it clear the Fed might very well accelerate its monetary tightening.

Yesterday Fed Chair Jerome Powell told a Senate panel that he no longer believes inflation is “transitory” and that the Fed can consider wrapping up its taper “a few months sooner.”

This means the Fed has shifted gears.

For the last 20 months, the Fed has told the world that its focus was on growth in terms of jobs and employment. Throughout this period, Fed Chair Powell and his Fed colleagues stated that inflation was “transitory’ and didn’t warrant action.

This meant the Fed was willing to risk inflation while trying to create growth.

Not anymore.

The Fed is now focused on inflation, not growth. Which means it will be tightening not easing monetary conditions, most likely faster than most expect.

The credit markets have figured this out… take note where high yield credit (red line) is relative to stocks (black line) in the chart below. High yield credit leads stocks. It did so from the March lows. And now it’s doing the same to the downside.

Look, the message here is simple: the correction in stocks is NOT over. It’s NOT time to buy yet. If anything, we can expect stocks to drop to the red box sometime in the coming days.

Put another way, another bloodbath is coming. And when it hits, smart investors will cash in while everyone else gets taken to the cleaners.

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,

President Trump has tested positive for COVID-19. And we are about to see a REAL COVID-19 test play out in the stock market.

Let me explain…

The COVID-19 pandemic has been one of the most polarizing issues in American history.

One group of Americans believes it’s one of the worst health crisis in history and that our entire society should be restructured to deal with it.

Another group of Americans believes the entire disease and shutdowns were one gigantic scam designed to cripple the economy to damage President Trump’s chances at reelection.

The stock market is about to find out which one of these is closer to the truth.

President Trump’s obsession with the stock market is almost beyond parody. Very early into his Presidency, Donald Trump branded the stock market’s returns as illustrating the success of his policies. 

This attitude extends well beyond the President himself. Treasury Secretary Steve Mnuchin has stated that the White House views the stock market as a “report card.”

What this means is that the Trump administration views stock prices as representing their performance leading the country and the economy.

With that in mind, it’s not surprising that stocks are DOWN on the news that the President and the First Lady have tested positive for COVID-19.

Keeping in mind that President Trump is 74 and overweight which makes him at greater risk of complications/ more severe illness, stock appear to be extremely worried about the odds of his recovery. 

What comes next will tell us everything.

No other mechanism on the planet is better at discounting the future than stocks. They accurately predicted the government shutdown as well as the V-shaped recovery in the economy in 2020 alone.

So, if the market begins to rebound and rally strongly, that’s a clear signal that the market is discounting a full and rapid recovery from President Trump along with his winning a second term.

If, however, the market begins to REALLY collapse, it’s a clear signal that the market is discounting real problems for President Trump and the possibility that Joe Biden will be the next President of the United States.

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.

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).

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