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Broad Market Outlook
One thing that always cracks me up, are the people who say they are waiting for a bear market to load up when the market is drifting to new highs. Only then, when presented with a bear market, change their narrative to "waiting until things feel safe again" as they repeat the cycle of sitting on the side lines doing nothing. Analysis by paralysis at its finest, or simply put, human nature doesn't change. We just find new things to fear.
Earlier this week Shake dropped a gem of a chart that compared the 2018 bear market to what we are currently seeing. If you were a member in 2018, try your hardest to remember what the fear was at that time. How hard is it to remember what drove the market to drop 20% after hitting new all time highs. Don't worry, I can't remember either.
The same will happen in 2 years after this bear market is over, you will have no clue what you were so fearful of today. From an active standpoint, our message has been clear, sit in cash, you are not punching a 9-5 clock here where you need to click buttons to show you are working hard. This is an amazing time to scan charts and find your favorite names to keep an eye on those sneaky buy backs in time.
Now comparing 2018's bear market to our current almost bear market, the only noticeable difference is that the measured move should push us further then the prior bear market.
2018 had a 20% drop where we had an actual bear market for 10 whole hours before reversing. Often buying on the way up after we enter bear markets yield great risk reward trades but in the moment seem like como kisi missions. After the fact with time they seem so blatantly obvious.
After Friday's action we are probably due for some type of short term bounce but overall I still feel we see lower prices in time. It has still been too easy and there really has not been any truly scary days.
Overall in the stock market, real estate, car market, watch market, shoe market and that dumpster fire of a crypto market, all have seen the easy trade end as the harder trade begins. Most who thought that no work, no effort plus money in the game equals easy profits. We are not in that camp, but we still need to put in the work to find the opportunities.
In a strong trending market, it may take a stock 6 months to increase by 20%, yet in a bear market, stocks can bounce 20% in 6 days, the only way you or I will find those are by scanning charts daily no matter how bad things look.
Right now the talk of the town is the FED raising rates, as they talk a big game with there last rate hike. My two sense is that was there main hand to curb inflation and that they wont continue at such an aggressive rate. If they continue to raise rates it will be much smaller as mortgage rates have already increased by 300% in a little over a year.
People were getting 30 year mortgages sub 3% a year ago (your boy locked in a rate of 3.1%) while rates today are north of 6%. To think that the Fed will raise another 75 basis points which will push mortgage rates even further towards levels that we have not seen in since the 90's seems unrealistic if there goal is a soft landing which is a fancy word for not crashing the market.
They went on the offense to address the elephant in the room to curb inflation.
But now as the overall easy trade in stocks, real estate, cars and everywhere else quietly cools off on there own, inflation will slowly pull back with time. Just as we can see the 10 year getting within a few basis points of a nearly decade high, we know this move is extended and just as fast as they rise, they fall even faster.
If you are looking to buy a home, I would recommend waiting till the winter as the 10 year should start to pull back and you should be able to find mortgage rates back in the high 3's to low 5's range vs the 6% plus area that they are at now.
From Bennett
SPY
Dow Jones
Nasdaq
Mid Caps
Small Caps
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Handbook Updates
Right now we need to ask you a tiny favor, we are lacking on reviews, if you click the link below you can order the 3 books for the kindle version for under $10. Trust me, we don't care about the $10, what we do care about are getting the reviews up on Amazon.
If you do order the 3 kindle books let me know and I will refund the cost, and as a thank you, I have a surprise for you for helping us out!
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Sector Rotation
Sensitive - sectors that have moderate correlations to overall market conditions.
Tech
Energy
Industrial
Telecom
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Cyclical - sectors that are more sensitive overall market conditions.
Materials
Consumer Discretionary
Financials
REIT
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Tax Experts
Tax deadline has passed, we hope you got your income savers credit if you contributed to an IRA this year and made less then $68,000. If you did not get the income savers credit. Email us a copy of your 2021 return and we will see if its worth amending the return to get the credit which can be as high as $3,000!
If you have any tax questions please email Tax@TradingExperts.org
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Defensive - sectors that tend to outperforming during sub par market conditions.
Consumer Staples
Healthcare
Bio Tech
Utilities
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Trading Experts Comma Day Watch
As we get closer to starting production, I have to say I am shocked at how many pre orders have already been reserved. Already 20% of the pieces have been reserved. We will only make 100 pieces of this model and once they are gone, they will be gone forever!
If you would like to get on the pre order list, there is no cost to do so, simply reply "watch" and we can chat!
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Big Picture Set Up
AMZN
There are a lot of names, good quality names that are coming into macro levels of support. This is the time to start looking at your favorite names that you have conviction in to find spots to take advantage of these deals.
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Traveling Experts
We have a few exciting experiences planned for the year ahead. We hope you find a trip that sparks your interest to come enjoy and network with other like minded members!
Dates:
1st Annual Private Track Day June 9th
2nd Annual Long Beach Island June 15th to 19th
1st Annual Private Track Day
We rented out a private race track in New York in June for exotic car racing and motorcycle racing! If you would like to learn more about this event let me know!
2nd Annual Long Beach Island
Video from the last beach week vacation!
If you would like to come soak up some sun at the beach this year with a handful of Trading Experts Alpha Members reserve your spot today!
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