Dear Reader,
I wrote this at 10 am.
It takes a little while to get things out the door.
The S&P 500 just pushed through 4,060 – and it has a clear path to 4,100.
That’s where things get tricky.
You see, 4,100 is a line in the sand.
4,100 is a key level that has fueled previous selloffs.
4,100 is back into the oxygen-deprived world of equity valuations.
So, let’s talk about what to expect in the next few days.
Screaming Higher
I didn’t play my own signal on Thursday, and the market just took off. This is a reminder that trading is very difficult. It’s a mental exercise of defying logic. It can be extremely frustrating, and I’m mentally exhausted right now from the absurdity of it all.
So, I have to prepare for the next move – instead of chasing the current one.
The good news is that I walked away from short positions on Friday. It allows me to recharge and prepare for what might come next. In the case of this market, money is screaming in to cover short positions, and traders are piling into the momentum conditions.
I’m just mad at myself for being human. For dealing with the inherent bias that comes with trading. For failing to take advantage of a move on Friday that would have paid me 500%. ‘
That’s on me. We’ve called reversals on momentum down to the day, over and over again.
And no matter how many times that it proves correct, it can be incredibly difficult to pull the trigger – because each time feels different. And then, by the time it’s happened, it’s over.
I don’t know what else I can really say. My hope is that the market corrects itself because this move has been highly irrational. There is a clear path to 4,100, and from there, we must prepare for something else to happen. I expect we’ll see funds use the short-term pop as another exit – similar to what we witnessed in April, August, and December.
Today’s Momentum Reading
Broad Market: Green
S&P 500: Green
Recap: The World’s Biggest Indicator (Momentum) is Green… No surprise here. We blew through the 4,050 level and are now pushing right back to the key resistance levels that dominated February. There’s no reason to short this market today, but look for the market to balance itself appropriately ahead of Powell’s testimony on Tuesday. The jobs report is the biggest catalyst this week and should run hot. Remember that we’re still in a period of expanding economic conditions and liquidity. So we could quickly run higher – which is a disaster for inflation numbers. But what else is new?
Flashpoints I’m Watching
Flashpoint No. 1: Financial Crisis Created by Fed Crisis
A new Federal Reserve Bank of San Francisco study shows that central bank policies can lead to financial crises. In what should surprise no one, authors determined that long periods of loose financial policy has fueled periods of irrational exuberance. The authors write: “Are periods of persistently loose monetary policy more crisis-prone? This section argues that the answer to this question is in the affirmative. We see significant estimates in the medium term, that is around horizons of 5 to 10 years. Financial crises are predicted by loose monetary policy several years ahead.” No kidding.
Flashpoint No. 2: Inflation Ahead
It’s clear that there is plenty of liquidity in this market, which is why I’m so worried now about the second half of 2023. That liquidity will start to dry up – as people start to horde whatever capital is being dumped onto the system. Will there be more stimulus? Will the Fed have to give up on inflation? Who knows at this point, which is why I’m incredibly frustrated by all of this nonsense. That’s really all this is anymore.
PMI activity returned to expansion recently, which will likely pump prices higher. We’ll have to then decide if the Fed needs to go to 6% and drown the private economy while Congress and other central banks just keep burning money around the globe. This is going to end VERY badly – with either a crushing recession or a period of elevated inflation that lasts a decade. There can’t be any middle ground here.
What You Missed
3% in 20 days. 14% in 23 days. 21% in 22 days. 55% in 21 days.
These are taken straight from Andrew’s 8X14 track record from the past 7 months.
They aren’t roller-coaster ride, stomach-drop numbers. I know.
But they’re real gains. They aren’t backtested. They aren’t estimates. Andrew has been using this exact strategy for seven months, and we’re going to show you the real results on Wednesday night.
Remember – Andrew isn’t trading for flash-in-the-pan profits.
He’s looking for something steady.
And that’s what he’s going to show you on Wednesday.
Here’s a breakdown the agenda:
- First, The market setup that allows Andrew to make these trades.
- Then, He’s going to give you the proof that this setup has happened 93 out of the last 94 months – so you can decide its reliability for yourself.
- After that, you’ll see how Andrew has clocked an average 8% every 14 days on these opportunities.
- And finally, why this strategy is perfectly suited for someone with a commitment to generating steady, reliable income rather than the hope of huge, fast gains.
We are just two days away from the reveal of this exciting new strategy, so click the link below to reserve your spot.
Stay Liquid,
Garrett
