Editor’s Note: As Chief Investment Strategist of Total Wealth, Shah believes in making his track record of recommendations easily accessible to all readers within seconds – and that’s why he’s compiled an Archives page.
If you’re worried about negative news stories tanking the stock market, you’ve got a lot of company.
Investors are worried about what virus spikes and more shutdowns, if not lockdowns, will do to stocks.
They’re worried that companies laying off workers by the thousands means their earnings are faltering.
Everyone’s worried what will happen to the market if there’s no “stimulus” bill passed this year.
They’re worried about a contested election and how markets will deal with that.
And investors are worried about what a reconstituted Congress might do to kill the bull market.
Me, I’m not worried because there’s another side to every coin and every negative story.
Oct 05, 2020
The Dow rose 508 points, or 1.9% last week. The S&P 500 rose 1.5%. And the Nasdaq Composite rose the same 1.5%.
That’s what I call a bullish week, not because it was a rah, rah run for the high ground kind of week, simply because we ended the week up when we easily could have slid backwards.
We rose on uneventful volume, to be sure, but we rose.
Proof that it was a good week and that bulls are ready to breakout of their corral and maybe stampede higher was especially evident on Friday. After futures pointed to a hellish day ahead, on the heels of the President seen headed for the hospital on Thursday, once the market opened, buyers came in.
If you’re wondering if it’s time to get into stocks or time to go to the sidelines, you’re not alone.
While millions of new-to-the-market retail traders and investors bought the March dip, millions more went to the sidelines, parking $4.8 trillion in money market funds, more than during the financial crisis.
Now we know retail was right. And we know sidelined investors in money market funds started buying stocks in June, drawing down fund balances by $300 billion at the end of August, and sending markets to new highs.
Then September swept in and shook up everyone.
Now, just as stocks were trying to bounce off their September correction territory lows, in spite of what everyone expects will be a contested election, the President of the United States and his wife get hit by the coronavirus, and stocks are falling again.
So, investors are asking themselves, as they often do, “what now?”
The answer’s simple: start buying.
Market analysts almost always use history as a guide when calculating likely stock market moves, especially when it comes to elections. This year’s no exception.
But, of all the historical references and metrics being incorporated this time around, there’s really only one that matters.
This election is going to be “contested” and only one other presidential election in modern era has been contested, and we know what the market did then.
Here’s why Tuesday’s debate almost guarantees a contested election, what the market did the last time the country waited to find out who their next president was going to be, and how you can profit handsomely by putting on an inexpensive option position to ride out the storm.
Sep 28, 2020
This week’s going to be a battle between buy-the-dip retail traders and double-dip recession fearing investors. Each side has plenty of ammunition and both camps are looking for back-up in data out this week and possibly some direction from the debate on Tuesday.
Bulls are betting the dip in markets and correction in some mega-cap tech darlings are a buying opportunity. And they’re going to test the waters early this week. Bears are betting the dip’s not done and sloppy data on the heels of no-stimulus in sight will grease the path lower.
Last week’s fight gave both camps hope, but the round went to the bears.
My money’s with them because retail buy-the-dippers aren’t likely to get institutional follow-on momentum as money managers aren’t ready to commit the massive amount of sidelined cash they have at the ready until they see what the election brings.
Here’s what happened last week, what data points could move markets this week, and a final word on the near-term direction of equities.
I’m not a “gold bug,” never have been, never will be.
A “gold bug” is someone who expounds the many virtues of owning gold, including that it’s a “store of value,” a “safe-haven” investment, an inflation hedge, and because its been hoarded by investors, central banks and governments the world over, it’s price is always going to rise.
All of that’s true, to some degree, but only because so many people believe gold is all that and more.
The reason I don’t trade gold all the time is it’s not volatile enough, meaning it doesn’t move up and down enough for me to watch it and trade its ups and downs. The reason I don’t invest in gold for long periods is because I don’t think it’s going anywhere, and I’d rather place my capital in stocks or other instruments I think are moving a lot higher.
But, that doesn’t mean I don’t buy, sell, trade, and invest in gold, especially when I see a good set-up, meaning a set of reasons gold’s about to make a move, I’ll jump in.
Here’s Why the Fed Pulling Another “Saturday Night Massacre” Would be the Best Thing for the Markets
The Federal Reserve’s not the problem, or maybe it is.
Economic growth, job creation, narrowing the wealth gap, equal opportunity in America, are the problems, but not the Fed’s problems.
Those problems should fall on the administration in power and Congress, but instead, the Fed has made these problems their concern, and if that doesn’t change, our economy could be headed for trouble, big trouble. We’re talking a meltdown that will put the Great Recession to shame.
On October 10, 2020, the Saturday before Columbus Day, the Fed should announce a new role for itself, one that will shake up markets, politics, and the country, but ultimately result in the problems the Fed can’t fix being addressed and fixed by presidents and Congress.
It’s been done before. On the Saturday prior to Columbus Day in 1979, then Fed chairman Paul Volcker, the last strong, independent Federal Reserve chairman, changed America’s future.
Sep 21, 2020
Today shouldn’t be any kind of surprise to you.
In fact, I know you saw this selloff coming because you had a roadmap with every signpost and mile marker redlined and highlighted with flashing “bellwether” levels to guide you.
You have been paying attention to your Capital Wave Forecast, haven’t you?
We’ve been in for a wild ride in 2020, markets aside, we’ve seen a pandemic, a civil rights movement, and natural disaster after natural disaster – in an election year, no less.
Markets have done exactly what you’d expect in such unprecedented times, which is to say, they’ve gone absolutely buck-wild.
While Q3 is coming to a close, I wanted to make sure to address some crucial questions that have come out of this years’ insanity before we shift our sights to the election, what’s to come in 2021, and more.
Here are some of your best questions, and as always, if there’s something you want to ask that isn’t addressed here, comment below and I’ll get them on the next round…
The privately owned and controlled Federal Reserve System, America’s so-called central bank, is more powerful than the U.S. government. In fact, it controls our government by financing particularly Fed-friendly governments, as only it can. MEET DAVID He’s got a 95% …
Last week, we ended down across the board. The Nasdaq, Dow, and S&P closed a combined 8.3% lower, and it had the bears coming off the sidelines and getting ready to make their move.
But the bulls weren’t giving up that easily, not Friday, not today, maybe not ever.
We’ve got a way to go before we’re in bear market, although we’re tapdancing on the edge of a correction, at least when it comes to the Nasdaq Composite. But we still have lower to go, if we end up going lower, that is.
The bears are looking to get in as the hedging unwinds, chasing Big Tech lower, and election madness begins to ramp up.
We could be headed lower… but they key word here is could, and where the markets are headed next lay in the hands of one very specific group: the retail investors.The Battle of the Bulls and the Bears Rages On
Sep 11, 2020
I’m not the kind of guy to say I told you so, but if I was, I’d sure be saying it now.
That’s a joke, kind of. Because I did tell you that Tesla was the poster boy for irrational exuberance and “that one stock is a bellwether for the entire market.”
When Tesla rolled over, when it “corrected,” meaning fell 10%, that was the bell ringing out its warning, that was the time to make sure your stops were locked and loaded, that was the turning point for the market.
As a bellwether it worked perfectly. Tesla hit an all-time high on Monday August 31, two days after I said to watch it. It was up a remarkable 495% in eight months. The next day it fell 4.66%. The next day, Wednesday, as the S&P 500 and Nasdaq Composite were making all-time highs, Tesla fell another 5.82%. The warning couldn’t have been any clearer or louder, while markets were making new highs Tesla was down 10% in correction mode.
This is a true story.
It’s about U.S. mega-cap tech stocks and equity markets melting-up this summer and how one man drove the action, suckered in retail investors, and painted Wall Street’s biggest pros into a corner. It’s also a lesson for retail traders on how the big boys play and how to not get played by them.
Sep 09, 2020
Valuations have been stretched and it’s high time some of that air gets let out of the bubble. The rally could go higher… but it depends on one industry, and that industry could surprise you. Click here to watch.
Last week was entirely an illusion.
The week started out well, got better by Wednesday, but fell apart. And what looked like a nasty storm on Thursday seemed to calm itself down by the end of trading Friday.
But the storm hasn’t passed, and if it doesn’t dissipate quickly, meaning by this week or by the end of next week, it could completely obliterate what progress we’ve made.
And, if all hell breaks loose, we could easily be down 20% or more by the end of next week, or sooner.