Knowing the motivations of market movers can keep you three steps ahead.
So, rather than chase the next hot stock…
We focus on where institutional capital is deployed.
A good example is Shopify (SHOP).
Stock Chart
During the bank turmoil, most people sold everything and stuffed it under their mattresses… yet a wave of institutional capital flowed into the e-commerce stock…
Market movers like Bridgewater Associates used it to “store cash.”
So it was set up for a massive push higher, and if you’d taken a position when we got in… your initial capital could’ve grown by 47% last month, thanks to SHOP options.
Not shabby, given the market conditions.
Remember how I said in February that when it comes to successful trading….
Knowing what to buy is as critical as learning what companies to avoid?
One of several ways we avoid trouble is to check if a stock is “top-heavy.”
That’s when many market participants own the stock at higher prices.
That’s often a tell-tale sign that the stock is set up for a rollover…
And you’ll want to tread with caution regardless of media narratives.
Take Nvidia (NVDA).
Stock Chart
As you may know, it’s one of the world’s leading semiconductor powerhouses.
Like most tech giants, it posted disappointing returns amid the carnage last year.
Still, thanks to blockchain’s resurgence and the emerging AI economy…
(A boon for big semiconductor players like NVDA)
So, time to get in, right?
Not if you understand what’s going on in the screenshot below.
That’s a roadmap from NVDA’s recent rally:
It shows more volume has traded above $270 than in any other part of this rally.
In other words, more market participants own the stock at higher prices.
So regardless of media narratives, it’s top-heavy, and if the $270 level cracks…
You have a new class of bagholders desperate to sell; that’s the ideal time to get in.
The operative word here is “timing.”
Get in a few seconds too late or too early… and you’re left holding the bag.
Still, when you have a roadmap telling you where prices will be (and when to get in)…
You can ignore the noise and focus on monthly setups that grow your cash.
That’s been our approach for thirteen years.
And like the 45 new retail traders who built a second income stream following our work last year… I’m confident anyone can get exceptional results with the insight above.
If you want to see how we find monthly setups poised to move higher …
We have free training on making this choppy economy work to your advantage.
Watch it here while it’s available.
And let me know if you have any questions.
“China ‘ready to fight’ after military drills near Taiwan.” — ABC News.
Here’s a quick note on escalating tensions in Taiwan’s Strait.
If you’ve got cash in any of the seven asset classes in immediate danger…
Please pay attention as events unfold in the days ahead.
Taiwan
Taiwan’s Strait is so critical to global economic growth…
It’s been called the world’s most important waterway.
(It may also be the most dangerous — as of 2023).
Here’s why:
Taiwan makes over 66% of the semiconductors that power our computers, smartphones, televisions, microwaves, and even our cars' brake sensors.
These semiconductors are shipped through Taiwan’s Strait.
Without them, companies can’t manufacture anything – inflation spikes, the global economy grinds to a halt, capital investments tank, and you guessed it…
Unprepared folks sustain painful losses.
Remember I said Taiwan’s Strait might also be the world’s most dangerous waterway?
Well, that’s because it is home to the military showdown between the U.S. and China.
And the Chinese military just sealed it off for a simulated…
Three-day Wargames Drill
(A sign of what’s coming in the weeks ahead).
Something else to remember:
Taiwan makes over 66% of the semiconductors that power our computers, smartphones, televisions, microwaves, and even our cars' brake sensors.
And these semiconductors are shipped through Taiwan’s Strait.
If you’ve been keeping up, you know even a five percent disruption in the global semiconductor supply chain has significant implications for our economy and investors.
Following a semiconductor supply snarl, Apple, Amazon, Tesla, IBM, and other Wall Street darlings relying on Taiwan’s chips saw their sales tank.
Earnings dropped, and the “large-cap crisis” rocked the stock market.
Unprepared folks lost about 55% of their cash (many shared their stories on Reddit).
But it wasn’t just the stock market.
Thanks to inflation caused by the supply snarl, five other asset classes were affected.
A similar story is playing out today.
China’s latest “wargames drill” suggests another supply-chain crisis is underway.
They could launch a full-scale attack on Taiwan anytime before January 2024.
China news
When that happens, the first military action will likely be “full control of Taiwan’s Strait.”
In other words, China could soon control the global semiconductor supply chain.
We’ll likely see another semiconductor crisis (but on a much bigger scale).
Like in 2021, it will disrupt our economy.
And because everything practically grinds to a halt without semiconductors…
The following asset classes could be in sudden danger:
When China strikes, you don’t want your cash stuck in the wrong assets.
In other words, now is the time to sit up and do the needful.
And in case you haven’t connected the dots yet, let me put it like this:
It’s no coincidence that China is escalating tensions in Taiwan while most oil-producing countries are ditching the petrodollar for the Chinese Yuan.
Hence, unlike what most financial analysts think…
It’s not just about who controls the semiconductor supply chain…
It’s about who controls the international monetary system…
And invariably… the global economy and financial markets.
This ties in with the “blackhole crisis” I’ve written about since 2020.
(i.e.: a series of events that will change the course of financial history).
Like every significant shift, fortunes will be made and lost.
But ultimately, how you prepare determines what side you end up on.
I’ll share more details during my Saturday presentation at 11 am ET.
Critical steps to protect your cash as new geopolitical tensions rock the markets…
And a “triple-digit asset class” to build wealth in the difficult times ahead.
The room opens at 11 am ET tomorrow (save your seat here).
To your trading success.
Steve.
P.S.: I’ve been in finance for over 13 years. I’ve made a fortune through three of the worst bear markets since 2008. Still, nothing I’ve seen has more wealth-building potential than what I’ll share on Saturday. If you’re unsure how to navigate these shark-infested waters as this global financial reset unfolds, I encourage you to attend my free strategy session at 11 am ET tomorrow. Click here to save your seat.
Map of the world with secondary economy countries
The U.S. has been such a dick about foreign policy over the past decade…
I’m not surprised other countries are finally getting around the dollar hegemony.
On March 29th, Florida Senator Marco Rubio went on Fox News to sound the alarm about the parallel economy developing among the BRIC countries.
"They’re creating a secondary economy independent of the U.S.," Rubio warns.
"We won’t have to talk about sanctions in five years because there will be so many countries transacting in currencies other than the dollar… that we won’t have the ability to sanction them,” the 51-year-old Florida Senator explains.
I don’t agree with most of Rubio’s views.
And I couldn’t care less if he loses his seat next year.
Still, I can’t deny he has a point here.
Pre-2020, none of this would’ve happened.
But a bunch of chumps runs the State Department, and worse…
The Federal Reserve’s emergency rate hikes are like…
It may stem the bleeding for a while, except the damage’s already been done… And quantitative tightening won’t erase the consequences of reckless policies in years past.
Hence, a secondary economy is unfolding before our eyes.
And unless there’s a miracle, we’re in for one helluva ride.
With more countries moving away from the petrodollar, I expect America to be stuck with hundreds of billions of dollars nobody wants, leading to massive inflation.
As I mentioned in last week’s editorial, there are implications for anyone with money in stocks, bonds, gold, crypto, 401k, pension, private investments, etc.
Still, if you’re anything like my clients, none of this surprises or scares you.
Why?
Because it’s another layer of the “financial black hole” I warned of last year.
As with all significant financial resets, fortunes will be made and lost.
But to maximize the opportunity, you must first get out of the way with your cash.
Then diversify accordingly into any of the three assets poised to shoot up as we brace for a massive realignment of international trade.
Ultimately, what you do today determines what side you end up on.
Need help navigating these volatile market conditions?
I share more in my video presentation about this crisis.
Detailing critical steps I’ve taken to protect and grow my cash in difficult times ahead…
And how to ensure you don’t get caught up in this month’s “bear market trap.”
Click here to watch the video here while it’s available.
Endless money printing, sky-high debt, and senseless geopolitical conflicts.
It was only a matter of time before other countries got fed up.
Hence, we’re witnessing a massive realignment of geopolitics and global trade…
With profound implications for the U.S. dollar.
There’ll likely be unprecedented volatility in the months and years ahead.
So it helps to understand what’s coming and prepare.
Petrodollar
Russia and China recently signed a deal allowing China to buy Russian oil in the Chinese Yuan.
It marks a major step toward undermining the U.S. dollar as the defacto currency for oil and gas trading.
But it’s not just Russia and China.
Chinese and French energy companies recently finalized a deal to trade 65,000 tons of liquified natural gas (LNG) in the Chinese yuan.
Last week, China and Brazil struck a deal to trade in their currencies, ditching the dollar.
Then, there’s Venezuela.
Venezuela has about 304 billion barrels of proven reserves.
They’d typically rely on petrodollars to sell crude on the international market.
However, U.S. sanctions make dollar transactions very challenging.
Hence, the Venezuelans are happy to accept yuan as payment.
I expect more oil-producing countries to follow suit.
Not just because the dismal financial situation of the U.S. guarantees the dollar will lose significant purchasing power… but because there’s enormous political risk.
Oil producers are exposed to the whims of the US government, which can confiscate their money whenever it wants, as it recently did to Russia.
Nobody wants to be in that position, hence, the departure from the petrodollar.
The more countries move away from the petrodollar…
The more difficult it is for the U.S. to swing its weight economically.
If the petrodollar system crumbles, America would be stuck with hundreds of billions of dollars that would no longer be in demand, leading to massive inflation.
This doesn’t bode well for anyone with cash in the markets. It aligns perfectly with my “financial blackhole” warning last year. Just another chapter in a series of events that will erase over $20 trillion of invested wealth over the next few months and years.
As expected, clued-in investors are already looking for an escape hatch.
Gold is certainly one place to look, but you'll miss the big picture if that’s all you do.
During my strategy session at 11 am ET tomorrow… I’ll discuss the critical steps I’ve taken to protect my cash as this international monetary reset unfolds…
With details on three solid investments that could hand a small group of investors a minimum of 75% monthly gains in the difficult times ahead…
And how to maximize your returns without exposing your portfolio to painful losses.
The room opens at 11 am ET.
If you want to see what I’ve lined up for tomorrow, click here to save your seat.
It’s still ugly out there in bank-land.
While regulators are deciding what to do about Silicon Valley Bank’s assets…
Another bank stock has been cut in half.
Chart
First Republic Bank's (FRC) equity is having a rough one (forget today’s fake 29% rally).
And if you’ve been keeping up…
You know the issues with U.S. banks have spilled over into Europe.
Contagion Spreads to Europe
Credit Suisse is down over 50%, and why am I not surprised?
Chart
It was staffed with major dopes who couldn’t manage risk if their lives depended on it.
Today, it’s become the market’s punching bag.
It was valued at over $20 billion last year…
But the Swiss Investment bank UBS bought it for $3 billion.
That’s $17 billion Gone in a Flash
It’s not just Credit Suisse.
Silicon Valley Bank lost $33 billion in barely two months.
Signature Bank lost about $17 billion in one month.
And if my analysis is correct, more will follow in the months ahead.
What does this mean for your cash?
As I’ll show you during my free strategy session at 7 pm ET tomorrow…
This goes beyond the banking system.
It’s a market anomaly set to erase $20 trillion over the next 12 months.
Those unprepared will suffer painful losses, but if you follow the critical steps I’ll share tomorrow night, you can protect your cash and profit.
Just when you thought it was safe to get back into the water…
Another C-word crisis tanks a prominent financial firm.
Here’s the story (and what it means for investors).
Silvergate bank, a cornerstone in the crypto world, was all the rage in 2021.
They were “innovative,” providing capital and financing to many Web3 projects.
I had reservations; fast forward to today, and the whole thing has crumbled.
Stock Chart
Earlier this week, Silvergate announced closing and returning deposits to customers.
In a press release, the bank’s holding company, Silvergate Capital Corporation, said it is shutting down “in light of recent industry and regulatory developments.”
It turns out the crypto bleeding wasn’t over.
This time we’re seeing it in a federally regulated entity. “Long-term” investors who thought we were out of the woods (holding on to stocks) will be in for a rough surprise.
It’s easy to understand why when you look at events unfolding.
Because it’s not just Silvergate Bank shutting down.
Silicon Valley Bank (SIVB) is scrambling to reassure clients after a 60% stock wipe-out.
Stock Chart
This is another supposedly “boring” bank that tried to get too friendly with the crypto markets with too much exposure.
The natural result is the gigantic mess unfolding before our eyes.
We’re seeing the emergence of the word “contagion” again.
The spread of an economic crisis from one market to another.
Remember the good old days (circa 2008) when overleverage in terrible housing products took down some of Wall Street's most prominent financial players?
We see similar signs again.
We knew about the problems with Silvergate for a while, but Silicon Valley Bank is another player with serious risk. Signature Bank (SBNY) could get hit too.
These are all “regional banks” that should be paying out decent dividends.
Yet, KRE, an ETF that tracks them, shows the worst one-day selloff since 2020.
Stock Chart
This begs the question:
Is it a shock that everything starts right when the Fed is close to its terminal rate?
Not if you’ve been keeping up.
Over the past two years, we’ve seen a massive pullback in liquidity, and it’s starting to bleed over into credit markets. That doesn’t bode well for most investors.
Yet, high-volatility markets offer profit opportunities if you know how to play them.
On the one hand, passive investors who hold on to stocks blindly will be in for a shock…
Especially when considering “inflation-adjusted” returns.
But on the other hand, massive profits are in store if you know where the smart money will be as this new crisis unfolds.
That’s where our bear-market roadmap comes into play.
We know where the institutions are stuck and where they will be forced to sell.
If things get wild, we know where the smart money buys and can cash in quickly.
And because we know how to use options to limit risk and leverage returns, it’s easy to see fast winners. Like the 72% win we peeled off SHOP after yesterday’s market bell.
SHOP is just one of four companies on our radar this month.
If you want to learn more, my free video reveals our approach to finding these winners.
Watch it here to see how to profit from this new crisis.
Another week, another example of why you shouldn’t take news headlines too seriously.
Everybody knows the market was off to a great start in 2023.
The Dow gained nearly 3% in January.
The S&P 500 rose 6%.
And the tech-heavy Nasdaq soared almost 11%, its best month since July 2022.
This was because the Consumer Price Index (CPI) came in lower than expected for December 2022: leading the market to believe disinflation has come to stay.
That is to say, inflation is cooling, and the Fed will cut rate hikes soon.
This was a false narrative, and the media blew it out of proportion.
As such, many investors threw caution to the wind and went bargain-hunting.
But if you’ve been trading bear markets as long as I have…
Fake bear market rallies do not easily fool you.
Hence, why I issued this warning two weeks ago.
Few listened.
But we now know there was a statistical error in the CPI result for December.
CPI headline
In other words, the rally was built on a lie.
As such, most bargain-hunting investors will sustain another round of painful losses as the market experiences a steep correction this week.
We’ve got another CPI number coming out this Thursday, and as expected…
The market is preparing for a scenario where the CPI is hotter than expected.
Here’s the kicker:
CPI results can be misleading, but the Fed always does what it says it will do.
Consider this comment from Fed chair Jerome Powell during a question and answer session at The Economic Club of Washington. “We think we are going to need to do further rate increases. The labor market is extraordinarily strong.”
In other words, it will keep hiking until it reaches its 5% terminal target.
Which is the highest it can raise interest rates during this regime.
Therefore, the question for the Federal Reserve in March won’t be whether to hike interest rates again in May but whether to continue hiking in June and beyond.
This harsh sentiment has sent more stocks over the cliff.
I expect more will follow in the weeks ahead as the media continues to mislead unsuspecting investors who’ve embraced the “disinflation narrative.”
I’m not here to tell you what to do.
But if you’ve read this far, I hope you’re smart enough to know what to focus on.
Bottomline:
The hikes will continue longer than the market expects.
The cost of borrowing cash will become unbearable for most companies…
And we could see a wave of bankruptcies bigger than we saw in 2022.
Still, the market always offers sensible opportunities if you look in the right places.
Hopefully, this gives you something to work with this week.
If you need more insight on protecting and growing your money in this market…
I’m holding a free webinar at 7 pm ET this Thursday.
I’ll share my game plan for this quarter and four recent winners in my portfolio.
This way, you can see how I maximize returns while minimizing risk.
P.S.: Most financial advisers tell you “time in the market” beats “timing the market,” but this is the #1 reason you sustained painful losses in 2022. If you’re not careful, it could cause you more pain this year. I’ll shed more light on this during my webinar on Thursday. I’ll also share four stocks to grow your money. Save your seat here.
Seen the headlines today?
Dozens of stocks that took a hit last year are suddenly picking up steam.
But before you jump back into the markets with both feet…
There’s something you should know.
Let's start with a few points from my email today.
Beyond Meat (which sells artificial meat) started today’s session with a 14.33% bump.
Beyond Meat Inc Chart
Upstart (an AI lending platform) is up 10.44%.
Upstart Holdings Inc
And Wetouch went parabolic over the weekend following a new product launch.
Wetouch Chart
I could go on with more examples.
But here’s the long story short.
Most analysts forecast an upward trend is on the horizon.
Why?
Because the December employment report showed the U.S economy added a lower-than-expected 223,000 jobs last month…
And the average hourly wage rate is expected to slow to 0.4% from 0.6% in November…
That negative bit of news suggests rate cuts are underway.
As such, many believe the Fed will slow its interest rate hiking pace at its next FOMC meeting (slated for January 31 - February 1).
And that sentiment is sending certain stocks higher.
Here’s what the general forecast looks like:
This optimistic forecast is part of why the markets’ risk appetite is revving up.
And certain stocks are picking up steam.
For some investors, it’s time to pull cash from under the mattress (or wherever they stashed it during the 2022 storm) and go bargain-hunting.
I can’t stop you from following your instincts.
But after 13 years of trading through some of the worst bear markets in history…
Here’s what I can tell you:
Every time the bulls expect rate cuts, the Fed goes in the opposite direction.
A recent example is December 2.
Right after the November employment report showed declining wages, the bulls cheered because that negative news seemed to confirm a rate cut was underway.
Stocks got a lift that week, but it didn’t last.
And if you were one of those who jumped back in with both feet…
Your portfolio would’ve taken a hit.
The same story is playing out today.
Even though Fed chair Powell has maintained a hawkish stance…
Bulls choose to believe rate cuts are underway.
So the market’s risk appetite is revving up…
We’re seeing more cash flow in certain sectors…
And a number of stocks have gained momentum.
But as I told my clients this morning, it’s too soon to have a good estimate of…
Especially since Fed Chair Powell doesn’t want to repeat his predecessor’s mistake.
Like Powell, Paul Volcker fought inflation with interest rate hikes in the 80s.
Except, he cut rates too early and we all know the horrors that followed.
Powell doesn’t want to be remembered for the wrong reasons.
That’s why the Fed will continue to hike until something breaks.
So while the current “greed momentum” may continue for a while…
I wouldn’t go bargain hunting yet.
Not with America’s financial system on the cusp of its biggest bankruptcy since 2008.
This doesn’t mean there are no good opportunities out there.
You just need to look in the right places.
And when you find an opportunity that checks the right boxes…
It helps to manage your risks properly.
That’s all I’ve got for you today
If you need more help navigating this market…
I’m holding a free webinar at 11 am ET on Wednesday to reveal what I’m doing to protect and grow my money as America braces for its biggest bankruptcy since 2008.
