In my weekly e-mail a couple of weeks ago, I said the markets were at a historic inflection point. However, even I couldn't imagine what would unfold so quickly in just the last couple of weeks.
We’re living through some historic times, indeed!
By way of example, here’s the crude oil market:
In the month of March alone, oil dropped from over $45 to $20. Since the oil drop began several years ago, it’s gone from $125 to just $20 today. I don’t think the bottom is here yet, either.
Here’s GBPUSD (the British pound versus the U.S. dollar). The pound dropped 7% to lows it hasn’t seen since 1985:
It touched 1.15 this week and that’s a price it hasn’t seen for 35 years.
Now here’s XAGUSD (spot silver):
It went under $12, a very long drop from $50 a decade ago.
Stock markets have also been getting hammered, as you’ve probably noticed. To give you some perspective on the enormity of the damage, here’s the U.K. FTSE index:
In just a month and a half, the market took back 10 years of gains as it touched a low it hasn’t seen since 2010.
For comparison here’s the DJIA (the Dow Jones Industrials) the major stock index in the United States.
In just one month the DJIA has taken back 10,000 points by dropping from 29,000 to 19,000.
It took the DJIA 128 years to reach 10,000 in the first place. Then just three weeks to shave 10,000 points off. This is how quickly and ferociously this correction has arrived.
And yet many investors didn’t expect this.
They’ve been raised on the idea that the market only goes up. It’s hardly surprising they’ve been die-hard believers. After all, when you look at the stock market over the last 10 years you can understand why buy and hold worked so well. Most people just kept averaging into the market month after month.
Those investors were well rewarded over the decade. But now the markets have crushed those 10 years of steady investment gains in just a couple of weeks.
This was not a huge surprise to me, however.
I’m not one to follow the herd. I was very cautious about this market because I felt we were at historic levels of complacency. It was too easy. We were getting everything we wanted at no apparent cost. Everyone was living the high life and drinking champagne and thinking this was standard behavior.
Except it isn’t. We used to have business cycles. We used to have recessions. (I can't remember the last normal recession in America.)
Of course, we did have a crash in 2008. But that wasn’t a normal business cycle or a normal recession. It was bailed out like every other downturn since 2000 has been bailed out by the Federal Reserve and the U.S. government.
And now we're seeing the same thing all over again. The U.S. Federal Reserve dropped interest rates to zero and they're doing unprecedented daily interventions in the repo and other money markets to assure liquidity to prop up the banks. Plus there’s a $2 trillion package in the works that’s intended to be a fiscal stimulus measure.
Yet despite all this helicopter money, the index closed right on the low. That’s not a good sign and suggests we’ll see even lower prices going forward.
That’s not a great prospect for most investors who were long stocks, bonds, and real estate and thinking they had a diversified portfolio. Yet everything including gold crashed.
Everything? Well, not quite.
If you’d been following my calls over the course of the last three or four weeks, you’d have made money. In fact, you probably aggregated several thousand pips to the upside if you took the trades I suggested.
As the US Stock Market crashes and the US Dollar continues to rally – we’re in some of the most unprecedented and interesting times we have ever seen.
This is producing some of the biggest opportunities that I’ve personally seen in decades, with one of our members making $200,000 just this week.
On this week’s video report, I share what is going to happen next including what may potentially be one of the biggest trades in a long time.
- It took 128 years to get to 10,000 points, then three weeks to drop an equal amount (what’s going to be in store next the stock market?)
- Why most traders that “follow the herd” are in ruins after their ten year’s worth of steady investment gains came crashing down (and the opportunity that this leaves for you).
- A walkthrough of how I grew my account by 3,031 pips (and how I advised members to do the same) with a breakdown of each specific trade (starts at 7:54)
- Messages from my members who took advantage of this include Zsolt who grew his account by 66% and Gert who made $200,000.
- Why understanding technical analysis is the most important trading skill that you can have (and examples of the unfair advantage that it gives you).
- The “Reverse Symmetrical Triangle” on the US Stock Market and what is going to happen next based on this textbook pattern (and why this may be one of the biggest trades on the board) – watch from 19:39
- The exact chart that proceeded the Great Depression in 1929/1929 and why it’s almost identical to today’s market (is history about to repeat itself?)
- The “Jaws of Death Price Pattern” that is going to lead to the biggest detraction in US history (and the steps you can take today to be on the winning side).
- The historical perspective on the recent US Dollar rally and what history suggests is going to happen next (based on historic price patterns)
- Plus much more
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