Welcome to 2021: Here’s What to Watch for During the First Week
Your Capital Wave Forecast for this week is “bullish.” For this month, for the first quarter of 2021, and for the year, it’s bullish.
That doesn’t mean we’re not on “bubble watch,” because we are.
The forecast is bullish because equity markets can continue to rise as bubbles self-deflate, get pierced, or burst spectacularly.
That’s where we’re at. That’s how strong momentum is coming out of 2020 and going into 2021. The same momentum-drivers will likely persist throughout the first quarter and probably the first half of the year.
Here’s what’s on my radar for the first week of 2021…
These Bubbles Won’t Pop without Warning
We’ve got “stimulus” checks, or helicopter money, coming. A lot of that money is going to get plowed into “retail” equity brokerage accounts at all the giant discount houses, like it did in March 2020.
We know what happened then.
And like stupid short-sellers trying to take Tesla Inc. (NasdaqGS:TSLA) down for years (it rose 743% in 2020) who figured out it’s better to join raging bulls than try and beat them, institutional investors, big traders, and hedge funds aren’t going to “fade” retail investors and traders by trying to knock down stocks and force a retail apocalypse.
They’re looking at Tesla and figuring it’s better to follow retail into the stocks they chase up, chase them up higher themselves and watch retail come in after them and chase them up even higher.
Pros are going to try and create their own momentum darlings by taking positions, bidding them up, playing the social media hype game and attracting retail investors into their chosen traps.
After this round of helicopter money, we’ll get another round. You can count on that if the Dems win Georgia tomorrow.
Yes, yes, yes, there will be bubbles inflated along the way. But, if the general trend remains up, and it should, bubbles forming (and bursting) won’t be enough to take down the market.
That doesn’t mean there won’t be great opportunities to short stocks as they burst; there will be. Just don’t think bunches of bubbles bursting here and there are going to sink the market.
Reason is, there isn’t a single bubble big enough to take down the market.
Deficit spending won’t do it. Inflation rearing its head won’t do it. Interest rates rising 50 basis points, oil prices rising, SPACs exploding, Tesla, or Bitcoin won’t do it.
Of course, there’s always a Black Swan circling somewhere we can’t see, and maybe there’s one out there now. But if we don’t see its shadow, it’s probably far enough away to not have to worry about it.
Happy New Year!
Enjoy the bull market, and don’t worry about where the bubbles are – because I’m going to chronicle them all for you, every week.
And as the New Year progresses, I’ll give you accompanying stocks to consider. But until then, I’d encourage you to check out my 2021 Investors Address – in it, I go over 50+ stocks I see as huge buys right now and others you should take out with tomorrow’s trash.
Best part, it’s totally free. No B.S., just a full list of stocks and their tickers and whether or not they’re a buy or a sell. You can see it all here.
P.S. – In my 2021 Investors Address, pay special attention to timestamp 06:09 – while this industry is certainly alluring right now and some of its top stocks are on sale, DON’T FALL FOR IT. It could be the biggest mistake you make for your money this year. Click here to learn more.