Tom welcomes back Gareth Soloway, President, CEO & Chief Market Strategist for InTheMoneyStocks.
The markets appear to be experiencing deleveraging as large players exit while the smaller investors buy the dip. Bitcoin corrected early and we usually see a sell-off with crypto when equities correct. We’re near all-time highs for leveraged borrowing by investors. Excess leverage creates bigger sell-offs and the margin calls can wipe out investors. He discusses the trends for the S&P 500 and how we have moved towards the bottom of the channel several times. The trend appears to be flattening which is indicative of weakness. Bitcoin is fighting around the 40k level and we have two converging trend lines. We could bounce but ultimately we’re looking at continued deleveraging in the broader markets. Watch the Fed should they blink we might be off to the races again. Markets have been deleveraging and some stocks are starting to look attractive. Many technology names have been hit hard but the big names continue to support the indexes. Weakness is revealing itself in the underbelly of the markets. Gareth believes 2022 will be a taper until around March followed by a rate hike. The market will probably throw a tantrum because its accustomed to all the easy money. A drop of twenty percent in equity markets seems likely and will force the Fed to react cautiously. Eventually, the Fed will lose complete control and the flood of money will get out of control. Gareth is attracted to some stocks outside of the United States that are more reasonably priced. He expects money to start flowing out and some of it could easily head to China or Brazil. Gold tends to lag inflation which also happened in the 70s. This is likely to happen once again. The more the Fed prints the larger the move in gold. Lastly, he discusses the chart for silver and provides some targets for the metals. Hes looking for a good entry point around $19 for silver this year before the big move to $50.