Stock Market Cycle: Forever QE Will Fuel Insane Bull Market

Stock Market Cycle: Embrace The Fear

Updated Dec 2022

The world is shifting into a new paradigm where forever QE is the new norm, with increasing debt levels set to reach unimaginable heights. Waiting for the system to collapse could prove fatal, as the masses remain asleep. As shocking as the current $31 trillion national debt may be to some, it pales compared to the potential $100 trillion debt ahead.

Looking back to the early 1900s, our national debt was less than 1 million USD, but with the current trajectory, worldwide debt could reach $1000 trillion before the truth is revealed. It’s time to embrace this reality and adapt to the new normal, as the system will continue until it collapses.

We will go on record to state that there is a good chance that worldwide debt will surge to $1000 trillion before the masses discover the emperor is naked, fat, bald and ugly; until then, they will continue to believe he is a handsome prince. It currently stands at $300 trillion

Stock Market Cycle Tip 2: Embrace Corrections

We believe that all sharp corrections in the stock market should be viewed as buying opportunities as long as the trend remains positive. Backbreaking corrections should be considered as “once-in-a-lifetime events”. Our main goal is to keep you informed about whether the trend is up or down. However, the Fed’s decision to create a cocktail of potent drugs such as Coke, Heroin, Crack and Meth could have serious consequences.

While precious metals will do well, we think stocks in critical sectors (and we are not referring to Gold stocks) will pulverise the precious metals sector in terms of returns. One such area is robots (particularly Sex-bots) and AI.

Stock Market Cycle: The Contrarian Playbook

Sticking to the old adage, the stronger the deviation, the better the opportunity; we reiterate that the trend is your friend unless you want it to be your nemesis. Over the long term, there has never been a permabear who has been correct about the market trend. Those who bet against the market have been blown out of the water, so there are no successful permabears. Take the backbreaking market crashes of 1987 and 2008, for instance. Looking at the chart below, it’s evident that being a long-term bear is hazardous to one’s financial well-being.

Stock Market Cycle Trend Forecast

According to our monthly chart indicators, the stock market is currently in an extremely oversold range. Historically, this has resulted in the markets rallying higher instead of breaking down. Therefore, any correction is expected to be short-lived. However, we would prefer a sharp pullback, allowing for more significant buying opportunities. Nonetheless, it’s crucial to identify opportunities instead of dictating the markets. As the trend is up, it’s vital to view every reversal through a bullish lens.

Those that hold out for a meaningful correction

Investors who are expecting a significant correction might be disappointed as the Dow is currently trading in the oversold ranges on the monthly charts, limiting the potential downside. Those unfamiliar with mass psychology tend to have floating targets when it comes to predicting market corrections. For instance, they might be satisfied with a correction of 1500-2000 points, but once panic sets in, they lower their targets and jump on the panic train. It’s important to have a clear and rational target in mind and not get carried away by emotions..

History illustrates that they will keep lowering the targets until the markets suddenly reverse course, catching them off guard again. The crowd never wins, and that’s one of the main lessons investors need to understand when investing. Market Update May 7, 2019.

The current state of news media can be likened to sewage, as exemplified by the admission of the CIA having agents in the industry. Large corporations could also follow suit, making it difficult to trust the information disseminated through mass media.

For over a decade, no financially related news has been found to help investors in the long run. The media seems to lead the masses towards euphoria during the worst times and panic during the best times. A winning strategy in investing is to buy during a stampede of the masses when the trend is up, and vice versa.

The lack of liquidity in the repo market is only a symptom.

According to Tim Speiss, co-leader of personal wealth advisors at EisnerAmper, there isn’t an actual economical crisis, and the situation may be a regulatory matter. Banks are also making 1.8% interest on money that they hold in reserve with the Federal Reserve, including excess funds that could be used to cover liquidity shortfalls.

The incentive to lend out this money decreases if banks already receive guaranteed interest rates. Banks are currently being paid over $19.5 billion monthly in interest for their excess reserves, totalling more than $1.3 trillion. When repo rates reach 1.75% to 2.0%, some banks may park their excess funds and collect the guaranteed interest instead. Full Story

Central banks around the world appear to be intentionally destroying their currencies as part of a global currency war. The US Federal Reserve’s actions since bailing out banks in 2008 have set the stage for “forever QE” and have led to a reliance on hot money to fuel the economic recovery.

Now, any sign that the Fed might tighten monetary policy causes market panic. This economic recovery may be built on a lie, and the world is facing a dangerous cycle of currency devaluation.

Forever QE & Insane Bull Market Update April 2020 Update

The Trump administration has dispersed around $881 billion from the pandemic relief package signed into law a month ago, and there will be an additional $500 billion to infuse into the economy. The Treasury Department distributes almost half of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act through various channels.

Though small businesses run out of aid within two weeks, considerable funds are still available. Another $484 billion will be signed into law to replenish small businesses and support hospitals and virus testing. Treasury Secretary Steven Mnuchin called it an “unprecedented fiscal and monetary response.” Yahoo

This influx of liquidity is akin to pouring gasoline on a raging fire; although the recent pullback has been severe, the forthcoming counter-rally will be even more robust. Early indications of the counter rally suggest that the market has a bright future ahead. It’s time to seize the opportunity and invest in high-quality stocks.

Overview

In today’s world, mass media is nothing but weaponized propaganda, misdirecting people with trivial matters and pushing them into euphoria when the intelligent thing to do is bail out. That’s why it’s essential to identify what represents opportunity and what does not. The stronger the deviation, the better the opportunity; the trend is your friend unless you try to fight, for if you do, it will turn into your nemesis.

The world is locked in a currency war, and central bankers worldwide aim to attempt to finish last by destroying their currencies. The economic recovery is founded on hot money, and the moment the market gets any signal that the Fed might be inclined to tighten the spigots, the markets tank. The only driving force behind this recovery is a lie.

The best time to buy is when the trend is up. Uncertainty creeps in, and vice versa. Don’t bet against the market in the long run. Being a long-term bear is dangerous for one’s financial health. Until the masses embrace this bull stock market, the odds of a crash are low.

The Fed’s goal is to make a cocktail of potent drugs, including Coke, Heroin, Crack, and Meth, and take it all in one shot. One area that is set to outperform precious metals is stocks in critical sectors like robots and AI. It’s time to back the truck up and buy quality stocks, as any correction is expected to be short-lived due to oversold conditions.

In response to the pandemic, the Trump administration has spent roughly $881 billion of the relief package, and another $484 billion in rescue money is set to be signed into law. This liquidity is like throwing gasoline on a raging fire, and while the short-term pullback has been vicious, the counter rally will be even stronger. It’s time to focus on identifying opportunities and adapting to whatever hand the market deals, viewing every sharp or shallow reversal through a bullish lens.