Big changes coming!
I have been outlining since late last year why I believe the US economy will move into recession late this year or early next year. During these last six months I have been pounding the table for:
- Selling stocks
- Buying the dollar
- Selling bonds
I’m changing my tune temporarily now and looking for the different trades. The fundamental picture has changed in the last couple of weeks and I need to change my outlook accordingly.
So now I want to sell the dollar and buy bonds but still look for a bear market in stocks but with a significant rally coming soon.
Let me explain why. What changed?
The first thing that changed was the market. We saw extreme movements in stocks, bonds, and the dollar. All moved in dramatic fashion rewarding those who followed my recommendations. But all good things must come to an end. Certain momentum indicators suggest that these markets will have counter trend moves now.
The second thing is that Christine Lagarde, head of the European Central Bank turned from Super Dove to Super Hawk. That shifted the focus away from the stronger economy and tighter Fed. At the same time, the market started to see what I’ve been saying for months: the economy is weakening. At the same time, the Euro economy is more stable thus shifting the growth balance toward Europe and away from the US.
So what is the outlook and how do we make money?
I still look for:
- A recession in the US late this year or early next year.
- A continuation of the major Bear Market in the US but,
- A significant rally with the ideal time to begin in the next couple of weeks and continue for two months
- The dollar to weaken through the year.
The ramifications are huge:
- A strong dollar has been a major force keeping inflation low. Now, inflation will accelerate with the weak dollar.
- The strong bond market, caused by the weak economy, will cause long term rates to decline just as the Fed is raising short term interest rates thus turning the yield curve even more bearish than it has been.
- The stock markets rally will cause a sigh of relief in stock market participants setting up an even more vicious decline in the fall.
All of these moves are big enough to make good money on.
I can help you best though my Stock Navigator daily trade service. This service has:
- A daily video report, the Macro Report:
- Which details the news of the day
- Commentary on what it means and how to profit from it
- Detailed strategy on how to make money from major themes
- My personal trades on how I am making money from the current situation
- Special reports as necessary
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