Last week the stock market had a huge rally day on Thursday. I saw bulls on CNBC claim after the close that people bought because there is a second-half earnings boom coming they see coming. Then on Friday, the stock market dumped as the yield curve on the 3-month and 10-year Treasury bonds inverted, to forecast a coming recession in the next 6-18 months.
Who is right?
On Friday’s open Fed fund futures were projecting a 35% chance of a rate but before the end of this year and by the closing bell those odds jumped to 57%.
Of course, a rate cut by years end would be preceded by a big enough stock market drop to cause that rate cut to happen.
Although the risks are now to the downside, I actually believe that the stock market could easily be exactly where it is now six weeks from today. If you just look at the chart the S&P 500 failed at 2850 resistance last week and is likely to establish a new support level next month (dipping due to buybacks turning off for the next four weeks to create a buying gap) and then a new sideways trading zone.
In effect, we are going to see a battle between the bulls and bears during that time as the stock market spins its wheels doing very little.
The real money to be made is not in SPY or popular still broken fad stocks, but in sectors now breaking away from the market and going up. Defensive dividend stocks and gold stocks are still outperforming the market averages and are only going to lead more with the Fed saying it can’t raise rates anymore.
I want to help you navigate these markets and go to where the money is going.
Back in January I did a special give away offer for my classic book Strategic Stock Trading. I ordered a box of new books to give away and they came last week.
I want to send you one of them to you.
Take a look as I only got a few.
By bypassing Amazon I can give away these books myself.
You see I’m going to pay the shipping to get the book to you and got the book priced at cost. So it’s super cheap free shipping for you to put this information into your hands. And you’ll get my real trades with access to my private trading group with it. I did a buy last week in the group of a big dividend stock that managed to go up on Friday when the stock market dumped.
And even this morning with the market poised to gap down there is a key sector gapping up. Those are the winning situations to be in.
To grab the book just go here:
-Mike
