All last week, I
warned that the markets are setting up for a spectacular collapse.
I noted that inflation is at levels that have preceded recessions throughout the last 50 years.
I also noted that the yield curve had inverted. This might be the single most accurate predictor of recession. It has accurately predicted every recession since the early ‘70s, including the 2020 recession (something fewer than 1% of professional investors got right). And it’s now forecasting a recession in the near future.
Today, we are adding the economically sensitive Dow Transports
index to the list of recession warnings. On Friday, this stock index collapsed
almost 5%. The damage was led by highly economically sensitive trucking and
rail companies: companies that usually signal a recession months before the
rest of the market “catches on.”
JB Hunt is one of the largest trucking companies in the nation. Trucking might be THE most economically sensitive industry in the market. What does this chart tell you is coming?
Put simply, multiple signals with extremely accurate historical
track records are screaming “RECESSION!”
What
are the odds they are ALL wrong this time?
The
time to prepare for what’s coming is NOW, before it hits.
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:
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:
Posted inFalse Breakout, Head Fake, stock collapse?|Comments Off on This Is the Only Trigger I Know Of That Predicted the 2020 Crash… What’s It Saying Today?
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:
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
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If
you do, then you’ve got to do what others don’t. You have to take a different
approach… and look for situations most are ignoring.
Like
what’s happening in bonds today.
Investors
are giddy over stocks rallying. After all the stock market is up 8% in just six
sessions. Meanwhile, something is brewing in bond land for only the second time
in 30 years.
The
10-Year U.S. Treasury is the single most important bond in the world. The yield
on this bond represents the “risk free” rate of return against which all risk
assets, including stocks, are priced.
And it just broke its downtrend for only the second time in 30 years.
The last time this yield spiked out of its downtrend was in 2018.
At that time, the Fed was shrinking its balance sheet by $50 billion per month
and raising rates every few months.
The end
result?
The $8 trillion corporate bond market blew up, and stocks crashed 20% in a matter of weeks.
This time around, the Fed has only just stopped growing its
balance sheet… and has raised rates only one time! Put another way, the yield
on the 10-year U.S. Treasury is breaking out and the Fed has barely
done anything!!
How
long before something “breaks” again and stocks crash? How long before the
investors who think like everyone else “stocks are great investments in this
environment” get taken to the cleaners?
And how
long before those who see things differently make literal fortunes? Just as
they always do when the markets are in la la land?
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).
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The entire world
is waiting to see what the Fed will announce today.
Will the Fed raise
rates? Will it not? Will it mention shrinking its balance sheet? Will it not?
At the end of the
day, in the longer term, it doesn’t matter. Sure, whatever the Fed decides to
do today will matter for a few days. But after that, things will be right back
where they were to begin with.
You see, the current
market cycle is markedly different from the last two.
The last two
market cycles followed a clear pattern:
A bubble
appears.
The Fed
ignores the bubble for far too long.
The Fed
finally acts to burst the bubble by tightening monetary policy.
The
bubble bursts, the markets crash, and the Fed introduces extraordinary monetary
policy.
This time around,
we have the following situation:
Inflation
is in the financial system.
The Fed
has only just stopped easing monetary conditions.
The
bubble is already bursting.
In this sense, the
Fed is cornered.
If it DOESN’T
aggressively tighten monetary policy, inflation will trigger a recession
(consumer spending is 75% of the economy), which will trigger a stock
market crash.
If the Fed DOES
aggressively tighten monetary policy to kill inflation, the markets will experience
a credit event as the trillions of dollars’ worth of debt that rely on ultralow
interest rates blows up.
There are over $10 trillion in corporate bonds outstanding. And high yield corporate bonds have already retraced ALL of their post-Covid-19 gains.
Put another way,
the Fed is screwed no matter what it does. If it moves to kill inflation it
blows up the debt markets. And if it ignores inflation or acts too slowly to
stop it, the economy collapses.
On some level the markets know this. Take a look at the below chart and you’ll see what I mean.
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).
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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).
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The Fed is now
cornered courtesy of the coming inflationary recession.
Let’s start with the
economy first.
The 2s-10s yield curve
is just a 19.4 basis points away from inversion. The last FOUR times this yield
curve inverted the U.S. experienced a recession soon after. I’ve identified
that line on the chart below:
A recession is bad
enough news because it means a bear market in stocks and most likely a crash.
Here’s that same chart with the S&P 500 below it. Note what happened to
stocks soon after the yield curve inversion hit (note that the 1990 market saw
a 17% drop, but the chart doesn’t show it well).
On top of this, inflation is roaring in the financial system. Gasoline is up 80% in the last 12 months. Lumber is up 36%. Copper is up 15%. And wheat has exploded 90% higher!
Remember, the consumer accounts for 75% of GDP in the U.S. What do you think happens to consumer spending when inflation eats into incomes? There is a reason Presidential ratings are highly correlated to gasoline prices!
And all of this is happening when the Fed only just ended QE and still has rates at zero.
Yes, we are
rapidly heading into an inflationary recession, and the Fed hasn’t even begun tightening
yet. If the Fed tightens to rapidly to kill inflation, the economy collapses. And
if the Fed takes its time raising rates, inflation rages, and the economy again
collapses.
The Fed is officially
cornered. There is no possible way to navigate this mess without disaster. Remember
the last four recessions involved a stock market crash. This one will likely
prove no different.
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:
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).
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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:
An
initial leg down
Several
weeks of chop
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).
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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
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The Russia distraction appears to be over. The markets are enjoying a relief bounce. Enjoy it while it lasts.
The bigger issue for investors today is the fact that the markets are experiencing the first coordinated monetary tightening by central banks in years.
In the U.S., the financial system needs to digest the following:
· The Fed is ending QE in a few weeks.
· The Fed will begin raising rates, likely in March.
· Multiple Fed insiders are suggesting the Fed will be raising rates five or seven times this year.
Across the Atlantic, we have:
· The Bank of England (BoE) is already raising rates
· The European Central Bank (ECB) will be ending QE this year.
· The ECB is no longer committed to NOT raising rates.
The bond markets are fully aware of these developments. But stocks are in “la la land.”
The yield on the 2-Year U.S. treasury has exploded higher, more than DOUBLING in the last six weeks alone.
In Germany, the 2-Year Government Bond has also exploded higher. Two weeks ago it moved more in a single week than it has in SIX YEARS.
This is the global financial system telling us, point blank, that we are in a “risk off” environment.
Stocks might chop around for a few more days, but we are going to NEW LOWS.
You can ignore this forecast, but in a week or so, you will wish you hadn’t.
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).
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The #1 question from clients over the weekend was whether Russia
would invade Ukraine.
My answer: it doesn’t matter as far as stocks are
concerned.
This is not to say that a war isn’t significant. And I’m certainly
not making light of human suffering or loss of life. What I am saying
is that stocks are going to new lows regardless of what happens in Eastern
Europe/ Russia.
Let me explain.
The #1 rule for investing since 1996 has been: don’t fight
the Fed.
What I mean by this is that as the financial system has become
more and more addicted to Fed interventions, your goal as an in investor should
be to align your interests with whatever the Fed is trying to do.
If the Fed is trying to reflate the financial system by printing trillions of dollars, you generally want to be long stocks. This was certainly the case from March 2020 until November 2021, during which time the Fed was easing monetary conditions aggressively, printing over $4 trillion. Stocks went up in an almost straight line throughout this period. Anyone who attempted to fight the Fed by betting on a crash got taken to the cleaners.
So, what is the Fed doing now?
Since November 2021, the Fed has been reducing its money printing. Its last day of QE will be in early March (three weeks from today). And from that point onward, the Fed will be tightening monetary policy by raising interest rates.
Put simply, the Fed is tightening, which is generally BAD for risk assets like stocks. Investors already got a taste of what’s coming during the first leg down in late January.
So again, whether Russia invades Ukraine or not is relatively insignificant. The Fed, which is the single most powerful force in the markets, is tightening monetary policy right now, which means stocks are going to break down… or possibly even crash.
After all, the last three times the Fed did what it is doing now resulted in:
1) The Tech Crash (2000-2002) stocks lost 80%.
2) The Housing Crash (2007-2009) stocks lost 60%.
3) The late-2018 meltdown (October-December 2018) stocks lost 20%.
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 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:
The stock market
manipulations are getting even more desperate.
For weeks now, I’ve
noted time and again that the only thing holding up the stock market was
abject 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 knew that no real investor was responsible for the move that occurred yesterday at the open. I’m talking about the move that pushed stocks up from 4,535 to 4,575 in a matter of minutes on announcements that inflation has hit a 40-year high.
The CPI came in at 7.5%
yesterday. The Fed’s funds rate is still at zero. Yesterday’s news means the
Fed is WAAAAAYYY behind the curve on inflation and will need to hike rates
aggressively.
So what investor would buy panic buy stocks based on this? The
answer is NO ONE. This was egregious manipulation. And it shows us that the
manipulators are becoming increasingly desperate.
Why?
The credit markets are imploding. They know what is coming. It ain’t pretty.
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
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).
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High yield credit typically leads the stock market. During the 2020 crash triggered by the economic shutdowns, high yield credit was already flashing major warning signals as early as January, while stocks continued to rally into late February. By the time stocks figured “it out” it was an absolute bloodbath.
Now, take a look at what high yield credit is doing today.
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 massive.
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.
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:
There’s fiction… and then there’s the January jobs report.
We are told that the economy added 1.2 MILLION jobs last month. This would be hilarious if wasn’t an incredible lie… a lie that is meant to convince the American people that the economy is doing well.
It isn’t.
The Bureau of Labor Statistics (BLS), which produced this monstrosity, should go into creative writing… there at least you’re SUPPOSED to make things up.
The report itself is absurd. If you’re going to craft a garbage report, at least try to make it believable: don’t create jobs in industries that EVERYONE knows are NOT hiring in January.
Case in point, January is notorious for BAD Retail jobs numbers because 90% of retail sales occur between September and the Holidays. Retailers hire a ton of seasonal workers to meet this demand. Then, once the holidays pass, the retail layoffs begin.
And yet, the BLS’s jobs report claims the Retail industry ADDED 61,000 jobs in January. You know, because Retailers are ramping up for the big sales boom in February… which has NEVER happened.
Another glaring data point comes from the Leisure and Hospitality industry.
It, like Retail, ALSO sees a holiday boom as Americans travel more during the holidays. Because of this, the Leisure and Hospitality industry hires tons of seasonal or part-time workers. Then, once the holidays pass, the layoffs begin.
Unless… you’re in the fantasy world of January’s jobs numbers. THEN the Leisure and Hospitality industry hired 161,000 people in January because… well because the report is garbage and was made up via accounting gimmicks.
Again, if you’re going to invent jobs out of thin air… at least try to make it believable.
So where are we really?
Well, if you go by ADP’s jobs numbers, U.S. companies SHED 301,000 employees last month.
If you go by the Labor Department’s official numbers, if you get rid of the population growth numbers which it admits are at best a GUESS, the economy LOST 272,000 jobs last month.
And then there’s the fact that the BLS itself admits that without seasonal revisions (i.e., BS-spreadsheet nonsense), the report would show that 272,000 jobs were LOST in January.
Put another way, the BLS’s accounting gimmicks created 1.4 MILLION jobs out of thin air.
These jobs don’t exist. They’re just a data point created in a spreadsheet by a government bean counter using an algorithm that has no connection to reality.
Does this sound like a great economy to you?
If you don’t believe me, consider that stocks are FORWARD looking.
The index that is most sensitive to the economy is the Russell 2000. Some 30% of the companies in this index are unprofitable… so this index NEEDS the economy to be doing well because the growth counter acts the lack of cash flows.
Note that the Russell 2000 went NOWHERE throughout 2021. And it is now breaking down in a horrible way.
Put another way… you better not believe the garbage data coming out of the BLS. If you do, you’re in for a world or hurt.
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).
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You’re
no doubt confused by the market’s action of the last week. Are we about to see
a waterfall crash… or are stocks about to explode higher to new highs?
The
answer is probably neither.
Markets
are tricky things. More often than not, their goal is to induce the maximum
amount of suffering to the maximum number of investors.
So
let’s dive in together and sort this out.
On a daily and weekly basis, the S&P 500 is now trending down. The market broke below its 200-day moving average (DMA) for the first time since the March 2020 lows. That’s a BIG deal and suggests a new bear market is here. Stocks have since reclaimed that level, but are failing to get much higher.
Moreover, on a monthly basis, the S&P 500 is
clinging to the ledge of a cliff at its 10-monthly moving average (MMA) at
4,465.
This is a BIG deal for the bulls because every time the market has broken that line in the last five years, a bear market has hit, with stocks losing 20%-30% of their value quite rapidly.
Where does this leave us?
Overall,
the tilt for the market is decidedly NEGATIVE. The trend remains down on a
daily basis and the monthly chart is looking quite dangerous as well.
This means the odds
favor more downside… and possibly even a crash/ bear market.
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).
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Yesterday’s
action sure seemed to come out of nowhere, didn’t it?
The
market came roaring out of the gate yesterday morning and didn’t look back.
Every period of weakness was bought aggressively by the bulls. And stocks
finished the day up near 100 points on the S&P 500.
What happened here? Is the danger over and it’s time to buy?
Not so
fast!
The
financial media likes to act as if every market move is driven by fundamentals.
But sometimes the market moves 100% based on manipulation. For those who aren’t
aware of this, moves like yesterday’s can be quite tricky.
Let’s break
this down together.
Fund
managers must report their performance results every month. Yesterday was the
last day of January. And going into that trading session, January
had been a terrible month for most funds.
In
simple terms, yesterday represented the last opportunity investment funds had
to push stocks higher to ensure the month ended with the best possible results.
So, they did what most people would do in that situation… they gamed
performance by pushing stocks higher.
You can
see this clearly in the Big Tech stocks (Microsoft, Apple, Alphabet, Facebook/
Meta).
These
are the most over-owned companies on the market. Practically every fund
on the planet owns them to the point that they’re often referred to as “hedge
fund hotels.”
These
companies exploded higher yesterday, dramatically outperforming the broader
market. The FANG Plus Index which made up of large tech companies I just
mentioned, rose over 5.8% while the S&P 500 was up just 1.89%.
What rational thinking investor bought shares of Apple or Alphabet
or Microsoft in an absolute panic yesterday?
Again,
these are the most owned companies on the planet. So where did the demand come
from to force these companies to spike higher?
It was
manipulation by the same funds that already owned these companies… and who were
about to report awful performance numbers for the month of January.
This is
what makes markets so tricky: if you’re not aware of what’s happening
“behind the scenes” it’s easy to mistake these kinds of games for a
real bull run.
For those of us
who know how the game is played, the most likely path for stocks going forward
is this:
For those who are worried that a new bear market is starting and that the
stock market is in danger of a crash, our Stock Market Crash Survival Guidecan show you how to not only protect your portfolio, but how to profit from
a market collapse.
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).
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pick up your copy of this report, FREE, swing by:
You’re no doubt confused by the market’s action of the last week. Are we about to see a waterfall crash… or are stocks about to explode higher to new highs?
The answer is probably neither.
Markets are tricky things. More often than not, their goal is to induce the maximum amount of suffering to the maximum number of investors.
So let’s dive in together and sort this out.
On a daily and weekly basis, the S&P 500 is now trending down. The market broke below its 200-day moving average (DMA) for the first time since the March 2020 lows. That’s a BIG deal and suggests a new bear market is here.
However, on a monthly basis, the S&P 500 can still end January above the all-important 10-monthly moving average (MMA)at 4,427. This is a BIG deal for the bulls because every time the market has broken that line in the last five years, a bear market has hit, with stocks losing 20%-30% of their value quite rapidly.
Where does this leave us?
Well we’re likely to see the bulls push to end January (today) with the market above 4,417. After that, I wouldn’t see surprised to see total chaos in the markets with prices whip-sawing this way and that… much as they did last week.
However, the trend is DOWN which opens the door to some nasty drops in the future. The average bear market is 9-10 months and sees stocks lose 30% of their value. However, in recent years the drops have happened much faster than that.
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:
The Russell 2000
is perhaps the “junkiest” index among stock indexes with 31% of its companies
NOT making profits. So, if the Fed is indeed looking to deflate the stock
market bubble, this would be the first index to collapse.
Sure enough, it is
collapsing. As I write this Friday morning, it has taken out critical support.
By the look of things, we will be unwinding the entire stock market move of the
last 24 months, returning to pre-COVID levels.
A similar price
move in the S&P 500 sees it at 3,400, or possibly even lower. That’s a full
20% down from here.
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:
