Today’s savaging of the stock market signals, to me, the beginning of the next leg down in this bear market.
For the last couple of months, I’ve been telling you:
- We were going to have a normal seasonal rally
- The rally would be concentrated in sectors that had been hurt in the first six months of the year
- Crypto would rally
- But this rally would end in the middle or end of August
We are now there. All I was waiting for was a short term signal that the bull run is over. I think today was that signal. Here’s why:
- There was a whiff of panic in the air.
- We closed lower than the closes of the last 8 sessions.
- Seasonally, we should be a bear leg now that lasts at least 2-3 months.
- We are in a recession.
- EPS are expected to start declining.
- Inflation is heading higher.
- The Fed is tightening.
Now is the time to exit those NASDAQ type positions and go back to:
- High dividend stocks
- Consumer staples
- Utilities
- Inverse ETFs
- Shorting key sectors like home builders and foreign stocks.
Watch me as I switch gears and beat on this market like a Tom Tom drum.
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