The Next Bear Leg Has Started!
Today’s savaging of the stock market signals, to me, the beginning of the next leg down in this bear market.
For the last couple of months, I’ve been telling you:
• We were going to have a normal seasonal rally
• The rally would be concentrated in sectors that had been hurt in the first six months of the year
• Crypto would rally
• But this rally would end in the middle or end of August
We are now there. All I was waiting for was a short term signal that the bull run is over. I think today was that signal. Here’s why:
• There was a whiff of panic in the air.
• We closed lower than the closes of the last 8 sessions.
• Seasonally, we should be a bear leg now that lasts at least 2-3 months.
• We are in a recession.
• EPS are expected to start declining.
• Inflation is heading higher.
• The Fed is tightening.
Now is the time to exit those NASDAQ type positions and go back to:
• High dividend stocks
• Consumer staples
• Inverse ETFs
• Shorting key sectors like home builders and foreign stocks.
Watch me as I switch gears and beat on this market like a Tom Tom drum.
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