Passa ai contenuti principali

Stocks Suggest a Bottom is Forming: Five Charts Every Investor Needs to See Today

Disclaimer: I am not a scientist nor am I a healthcare official. I am not downplaying the Covid-19 situation; I am simply looking at what the markets are saying about the Covid-19 pandemic.

A very strange thing has started happening in the markets.

While the news continues to tell us that there is a global pandemic and that soon millions of people will be dead… the stock markets have begun bottoming.

The stock market in Italy, which is supposed to be completely imploding from Covid-19, bottomed on March 16th. It failed to make a new low and has yet to roll over again.

Germany, which is now experiencing its own Covid-19 issues, looks like it bottomed on October 18th. It is still touch and go here, but we have yet to see new lows.

Here in the U.S., multiple economic bellwethers are showing us something similar. 

Caterpillar is the largest producer of large machinery in the world. If the world was entering a depression, and things were worsening, CAT's stock actually bottomed on March 12th and is now putting in a higher low.

Similarly Freeport McMoran (FCX) is the largest copper producer in the U.S. Copper is a commodity that is closely linked to economic growth. And FCX's share price looks like it bottomed last week on March 19th. Despite yesterday's early morning bloodbath, FCX shares never broke to new lows.

Taken together, these charts are suggesting that the the market is in the process of bottoming. The one area of concern that has yet to give us the "all clear" is the credit markets.

Put another way, if that last chart begins to rally in a significant way, stocks could EXPLODE higher.

These charts are suggesting to us that the first round of the crisis, the deflationary collapse, will be ending sometime soon. But the second round, the INFLATIONARY storm triggered, by central banks printing trillions of dollars is just around the corner.

Commenti

Posta un commento

Post popolari in questo blog

Fwd: The Looming Bank Collapse The U.S. financial system could be on the cusp of calamity. This time, we might not be able to save it.

After months  of living with the coronavirus pandemic, American citizens are well aware of the toll it has taken on the economy: broken supply chains, record unemployment, failing small businesses. All of these factors are serious and could mire the United States in a deep, prolonged recession. But there's another threat to the economy, too. It lurks on the balance sheets of the big banks, and it could be cataclysmic. Imagine if, in addition to all the uncertainty surrounding the pandemic, you woke up one morning to find that the financial sector had collapsed. You may think that such a crisis is unlikely, with memories of the 2008 crash still so fresh. But banks learned few lessons from that calamity, and new laws intended to keep them from taking on too much risk have failed to do so. As a result, we could be on the precipice of another crash, one different from 2008 less in kind than in degree. This one could be worse. John Lawrence: Inside the 2008 financial crash The financial
Posta un commento
Continua a leggere

3 Reasons Why Gold Will Outperform Equities And Bonds

3 Reasons Why Gold Will Outperform Equities And Bonds https://www.forbes.com/ 3 Reasons Why Gold Will Outperform Equities And Bonds For centuries, gold has played a major role in human history and has become interwoven into the financial fabric of society. Beyond its investment following, gold has become synonymous with wealth. Historically, gold's early use cases revolved around money – a form of "medium of exchange". After the second world war however, several countries and their respective currencies, started to shift away from the gold standard and migrated towards a fiat currency system. Today, gold remains largely a "Store of Value", and due to its unique properties and large number of use cases, it has managed to distance itself from other asset classes in terms of correlation, demand / supply drivers, and investment purpose. Gold's idiosyncrasies function as a double-edged sword, as it is challenging to predict
Posta un commento
Continua a leggere

What Will Stocks Do When “Consensual Hallucination” Ends?

The phenomenon works – until it doesn't. What's astonishing is how long it works. There is a phenomenon in stock markets, in bond markets, in housing markets, in cryptocurrency markets, and in other markets where people attempt to get rich. It's when everyone is pulling in the same direction, energetically hyping everything, willfully swallowing any propaganda or outright falsehood, and not just nibbling on it, but swallowing it hook, line, and sinker, and strenuously avoiding exposure to any fundamental reality. For only one reason: to make more money. People do it because it works. Trading algos are written to replicate it, because it works. It works on the simple principle: If everyone believes stocks will go up, no matter what the current price or the current situation, or current fundamental data, then stocks will go up. They will go up because there is a lot of buying pressure because everyone believes that everyone believes that prices will go up, and so they bid up
Posta un commento
Continua a leggere