Shah Gilani's Archive

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.

What looked at the end of the week like a dull week, last week, was anything but.

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.

This is one of those times.

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.

Jerome Powell, you’re up.

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 got more to go on the downside, so don’t be in any rush to buy this dip.

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% success rate and $20 million net worth. He’s one of New York’s most successful angel […]

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

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.”

I told you that on Friday, August 28, 2020, right here in Total Wealth in an article titled “The First Bellwether You Need to Watch to Avoid a Portfolio-Wrecking Loss.“

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.

We know what happened the next day…

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.

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.