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Thursday, April 14, 2022

Market Update 4/14/22 - I see a sector rotation coming

I've remained pretty bullish into the April pullback, and I'll continue to make the case for a continuing rally 

Most investors say they are expecting a recession, but that kind of bearish sentiment is actually extremely bullish contrarian indicator. I saw the story reported on CNBC, and Steve Lies man (Liesman) must know this - week old - survey is a bullish, indicator, but they must be intent on keeping their viewers in the dark.  

Over 1,000 major investors believe a worldwide recession is just around the corner, definitive survey says 

I linked to the fortune story, but all the fake financial news outlets are reading from the same script. 

As you get close to the end of the story, they conclude with: "But then it gets to the truly scary part. The survey says that uncertainty as a result of the war will combine with global inflation to create a new type of economic crisis". 

Now, I want you to think back to the financial crisis of '08, when Jim Cramer was going on the latenight shows, to drum up fear. "If you're going to need the money in the next 5 years, then you should sell" (at what turned out to be at or very close to the bottom).

And remember CNBC was talking about the financial system failing, when all the feds needed to do, to stop the selling, was to end market to market accounting, and hand the crooked banks, trillions of dollars in tax payer money.    

Here's a story you won't hear repeated by the lame stream media: 


Steve Bannon attributes his worldview to a simple stock-investing mistake his dad made after listening to Jim Cramer 

Believe me, there's nothing, "scary" about investors believing every negative story they're spoon-fed, by the lying lame stream media. It's when investors are bullish, and everything looks rosy, and the market is making new highs, that you should start taking some profits, as the smart money did, at the beginning of the year.  

One thing Jim Cramer is right about, is the fact that the real inflation numbers are coming from the used car sector, not Russia. That's in part due to the chip shortage, and the inability to produce enough new cars, BUT it's also due to the fact that the entire used car market has been hijacked by corporations like Carvana, and Carmax, because consumers no longer have the skills required to buy from a private sellers. As Cirvana puts it: You can binge-watch your favorite show, and have your car delivered to you. What they don't tell you is what that kind of white clove service is going to cost you. Probably $1000's of dollars more than you would normally pay.  

Related story: 

Carvana, Wells Fargo among car loan share gainers 

I'm not saying we aren't seeing real inflation, but we're also seeing a very strong dollar. It's when you see Treasury markets sell off, with the US dollar, that you should start worrying....  

Speaking of the US dollar: 

A short term top should be good for stocks. and the $EURO, and that is going to be bad news for Gold priced in $EUROs.   

To add even more weight to this theory: If you pull up the $EURO chart, you'll find that the most recent bottom in the EURO coincided with the top in commodities. That was well before the media saturation. 

This is especially relevant - even more so than metals - to the Energy bubble 

And as I pointed out to my LinkedIn following yesterday: 

 Believe what you're seeing on the chart, or believe what they report on CNBC; Commodities have already bounced back to a lower high. 

As far as equities go, like I said, I'm more bullish. 

$INDU - I prefer the DOW over tech stocks, or anything else that remains overbought  

1. The bearish view - the trend remains down, and resistance seen at the old 35.1 level. 

2. The bullish view - stocks continue to consolidate in a tight range, and the bullish channel is pointing at the next round number target 38k. 

If the current trend breaks then go with the flow, but suggest you don't fight the trend, and especially when media saturation on the "inflation" has reached record highs.   

Take Care, next week. Volume and volatility are going to drop off a cliff, and so you don't want too much exposure - especially on the short end.  Selling season isn't until May. 


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