A Confused Market‼️
A confused market, no question. Why?? Markets going up, and all this data is coming out that is just ugly. What is going on? For starters, my stance has not changed on this. Im still bearish.
Wow! Things have really changed. I hope everyone's being safe out there, with everyone being home our channel is exploding. Almost 2000 new subs just in the last month. So today, our agenda, as always, big charts. We're going to go through that sector spotlights. Are there some places to buy? You betcha. Next up, what keeps me up at night? Yes, there are some items right now, and our game plan to help you going forward.
Let's go to the big charts‼️
This is our long term view. What do we see? Same thing. Here's your trend line from 2009. Still broken. You see your relative strength declining. Most importantly, momentum crossed over ugly long term, still very much negative.
Your Mid Term weekly view.
You've actually had some improvement here. But again, you're still well below the 40 week average, which is what I look for. Then down here, crossover, big, big crossover, little baby button hook at the bottom there. I don't think it's too much today, but obviously we will continue to watch.
So let's look at short term, because this is what we're seeing obviously right now.
The market is going up, which doesn't make a lot of sense. So let's look at a couple things here. We have our standard chart down here. We have the volatility index still above 30, remember above 30, non investable. What we have here on the line is the Fibonacci Retracement.
You take your high, your low, and then you look for a retracement calculation. What has happened.... It's come back, it broke above the 38% Retracement, kind of normal. Then we got to the 50 , and you can see over here, we went down, we came back up and then we went down again. But what's happened is we broke above for a minute there and then down again to yesterday and today. I mean, literally on the line as of 9:50 on Thursday morning. So right now, that 50% Retracement seems to be really important. I am going to continue to watch that one.
Long term Negative mid term Negative We are still in a downtrend here, even though we've had this pullback.
Shifting gears, let's go to our sectors spotlight. Everybody's favorite. GOLD
Who doesn't love gold? We've been fortunate we started getting into gold back in 2018, and you've had surges. Then there was a sell off when people needed to raise cash. We jumped out of the game for a couple of weeks, once we saw that trend coming back we were in again. Volatility is everything. Price, volume, volatility started coming down again. We started adding, adding, adding. Then yesterday we added again on a pullback. At the bottom you will see which is gold relative too (who performs better)
Next stop. Your plodder here, U.S. dollar.
What we see here is cycle three. Kind of goes sideways a little bit. Had a nice little surge. But then we pulled back. When this whole mess started, we started tiptoeing in and then we started adding right here like gold. There's a dollar shortage around the world. So really like gold and the dollar as we go forward. Is there anything else that's peaking right now? Peaking at at us?
Let's start with consumer staples.
You would think that to be an obvious choice. You have consumer discretion, consumer staples, consumer discretion or high end items, big TV, jewelry, etc. Obviously, that's not being sold right now. But staples, staples of what we need everyday. Everybody heading to the grocery store.
We've seen a surge. right there is your 50 day moving average. So I'm looking at this got in a little piece last week, but want to see what happens before I make a bigger commitment. When you look down below, obviously, you can see that looks pretty nice. That's momentum. Right. Momentum of that sector going up. That's a good thing. So going to tip toe. Let's see what happens, see if it can hold its own.
Now, health care, I'm bringing this up for obvious reasons right now in this crisis and you look at today, had a nice little break out.
Healthcare as an index, I'm probably not going to do it. Why? You can do really well in health care, really bad in health care depending on the sector right now. Because of what's happening with this crisis. Overall I've always liked health care, but you're going have to be a little more selective.
Let's talk about treasuries.
This is a good place to be right now. Just like gold. You see treasuries shot up there when things got a little bit ugly at the beginning of this crisis. That was a great buying opportunity. So same as gold, because you got to look at how things work here. Treasuries go down. Gold does well.....Deflation happens. U.S. dollar does well.
What keeps me up at night?
Well, obviously, there's a lot going on right now. I thought this one was a little bit funny. I was speaking with a client the other day and I asked him, have you been watching my videos? We've been sending private videos to clients with exact moves we are making. He responded... well, I mean, they are a little harsh, but I understand you're just giving us the facts, and that's tough because comforting lies won't help anyone. Stay the course. Buy and hold right. Old Wall Street, and big TV.... Unpleasant truths. I surely don't want to be negative. But I'm here to tell you what exactly is going on.
let's talk about all this news.
We have seen this market comeback. There's three cycles of a bear market. You go down, you come up, and then you go down on fundamentals over time. Just look at all these headlines.
It's amazing that this market is grinding the way it is right now! The Fed just like last time and let me be clear, just like last time, they are bailing out Wall Street, remember???
Chairman Powell, Jerome Powell, P E Powell, private equity worked at Carlyle Group. he's tied in with all of these guys on Wall Street. Then you got Munchen. Hello. Former Goldman Sachs, and you're seeing all this these problems with the Treasury and the Fed coming together. It's illegal!! The money that they're throwing out and they're giving it to all the big banks. They're giving it to all the big companies. Is America really going to get some of this? We're going to talk about that because remember, Occupy Wall Street, what they're doing right now to me is actually worse.....
What they started doing last week was buying high yielding junk. Absolutely illegal according to their mandate. Something is going to come from this....
They are doing exactly what they did in the last crisis to get this thing going again, and they are giving it to the same people.
Everything going on right now, crony socialism, PE Powell bailing out private equity, and high yield debt. I thought it was great last week.....
Here is the link to that video on CNBC. It's shocking and also refreshing....
We are in cycle 4 growth slowing, clearly deflating. Clearly doveish market starting deflate and we're heading into deep cycle four.
let's take a deeper look.
Worst month over month sales ever!
Worst ever!! month over month. Figure it out, folks. You're hearing all this stuff from the government. Where's the money going? Is it really going to the small business owner? I'm telling you right here, based on my circumstance, the answer is NO.
One of the webinars I was on this week, they said they're looking at a 30% of retail and restaurants are going away.
Here's your PPI and CPI deflation
Earnings can't make this up, folks. Look at that, Whoa!
Look at those numbers. Now early, 34/ 498 . SALES growth minus 34%. Wow, and that's not even a full month. Lagging indicator, I mean this really has an opportunity to be the worst ever, and I'm not trying to be negative, I'm trying to be realistic.
So where do we go from here? Let's discuss....
Here is one of the problems. Singapore, if you have not heard, is having a big second wave right now and they are crazy Lockdown, way more so than the U.S.. So one we don't know until this thing slows down, and if we have a better testing.
The Average recession duration is 20 months.
We've had lower. We've had higher. It's a long term game plan. What's your number? How much can you handle in losses? This is not over folks. Buckle up. Be smart. You know, one of the things we talked about there, some of the allocations find opposite opportunities downside. Watch that VIX. As always, thanks for reading!