The S&P 500 is back in a bull market…
The common definition of a bull market is a 20% rally from a low.
And after plunging 25% between January and October, the S&P 500 is up 22%.
So, that’s a bull market… and then some.
And tech stocks are doing even better.
The Nasdaq 100 is packed with mega-cap tech stocks, including Apple, Amazon, Microsoft, Google, and Meta. It’s up 40% from its October 2022 low.
This will come as a shock to a lot of folks. You may be one of them…
After all, four regional U.S. banks have collapsed this year. The Fed has jacked up interest rates three times. And you can’t turn on the TV… or go on social media… without hearing about a looming recession.
But for readers who’ve been following our cycles trading expert, Phil Anderson, the surge in stocks over the past eight months won’t come as a surprise.
In April, he announced in these pages that we were entering the most bullish phase of market cycle he tracks.
And since then, he’s been pounding the table on why a “melt-up” is coming in stocks, real estate, and more speculative assets.
Phil is arguably the world’s best economic forecaster…
He’s predicted just about every memorable market turning point over his 30-year career. These include…
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The housing crash in the early 1990s
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The dot-com crash in 2000
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The bull market in stocks from 2003–2007
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The housing crash in 2007 and the global financial crisis (“GFC”)
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The bottom in stocks in March 2009 after the GFC
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The bull market in stocks in the 2010s
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The pandemic-induced crash in early 2020
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The selloff in 2022
Only Phil doesn’t call what he does forecasting. He calls it “remembering the future.”
He makes these predictions based off an 18.6-year cycle markets have followed for hundreds of years.
That’s the amount of time it takes for one boom-bust cycle…
I don’t have time for all the details. But it keys off research from a British economist and journalist called Fred Harrison.
In his book The Power in the Land, Harrison showed this was average time for a full boom-bust cycle in the British real estate market.
Harrison also showed how this cycle drove the stock market. And thanks to that research, he was one of the first people to predict the 2008 global financial crisis.
In 2005, he warned that the next property market “tipping point” was due at end of 2007 or early 2008. And he warned that the only way prices could be brought back to affordable levels was a “slump or recession.”
Phil then wrote his own book about this cycle, The Secret Life of Real Estate and Banking. And he found it also goes back hundreds of years in the U.S.
This is illustrated nicely is this chart of public land sales in the U.S. from 1800 to 1923.
You can learn more about the 18.6-year cycle here.
For today, what you need to know is it repeats through history. It also affects the stock market. And right now, we’re in the most bullish phase.
Phil calls the phase we’re in right now the “Eleventh Hour”…
It’s all in the table below that he put together for his readers. It shows the different phases of the 18.6-year cycle.
Here’s how he described the second half of the cycle – the Eleventh Hour – in a Q&A I shared with you on April 21…
Despite the doom and gloom in the press, this is one of the best times during the cycle to be an investor. It is the “growth at all costs” stage. So, I expect markets will turn upward from here.
This is great news for the investors who understand these cycles. Put simply, we have been granted more time to make money.
And here’s how he put it in these pages on May 5…
As the financial media makes a 180-degree turn on the recession narrative, investors will start to see that the world is in better shape than they thought.
The happier narrative will trickle down to government offices, boardrooms, and trading floors.
Then the media will amplify and spread this new narrative.
Then we’ll get even happier news… more “up” days in the market… more wild speculation. It will be like late 2021 all over again.
So far, Phil’s forecast is playing out…
May was a blowout month for tech stocks. The Nasdaq 100 shot up 7.6%. That was its biggest monthly gain since last March.
We also got some wild speculation.
On May 25, shares in AI chipmaker Nvidia jumped 24% on a bullish earnings forecast. This added $184 billion to its market value.
That’s enough to buy all the outstanding shares in Walt Disney, Wells Fargo, or Verizon.
And if he continues to be right, stocks are headed even higher. Phil again…
Now, there are a lot of people around that are still forecasting bearish opinions, some still forecasting the collapse of the world.
And forecasting global collapse is an easy sell. A lot of people just like to hear it. They think things are going to hell. And they invest accordingly. But I’m here to tell you this is the furthest thing from the truth. It’s just not going to happen.
If you think markets are going to collapse from here, you’re on the wrong tram… or train… or plane. We’re in for another crazy ride.
I’ll have more for you from Phil in tomorrow’s Cut…
Including why he says the mainstream view that a recession is coming is wrong.
Meantime, if you followed Phil’s advice and stayed bullish this year, congratulations. You’ve caught the big upswing in prices.
And if you were caught off guard by the new bull market, don’t worry. Phil has you covered…
He’s created a new advisory, The Signal, to give you specific plays that do well in each part of the cycle. He’ll also show you how the cycle works… and how you can use it to forecast market turning points.
It’s all in the on-camera interview I did with Phil, which you can watch right here.
Regards,
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Chris Lowe
Editor, The Daily Cut