Three reasons stock market bulls are cheering… Don’t pop the champagne corks just yet… Why 2019 will be the “Year of the Trader”… In the mailbag: “You’ve already lost the battle”…
The S&P 500 and the Dow shot up by about 5% a piece. And the tech-heavy Nasdaq jumped nearly 6%.
Stock market bulls had three reasons to cheer…
First, Fed chairman Jerome Powell – who’s under fire from President Trump for raising short-term interest rates – hinted that the Fed’s rate hiking cycle may be on pause.
Second, Black Friday and Cyber Monday spending came in about 20% higher over last year – a sign the U.S. consumer is alive and well.
The third reason came after President Trump’s meeting with Chinese President Xi Jinping at the G20 summit in Argentina. As Bloomberg reported…
U.S. President Donald Trump and Chinese President Xi Jinping agreed to keep their trade war from escalating with a promise to halt the imposition of new tariffs for 90 days as the world’s two largest economies negotiate a lasting agreement.
Stocks don’t go down in a straight line any more than they go up in a straight line.
Over the course of a bear market, they fall… then bounce… then fall… then bounce again.
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The kind of “wonder rally” we saw last week is typical of how early-stage bear markets behave. Here’s master trader Jeff Clark with more…
Think back to 2008. We had these wild swings in stocks – both up and down. Although the general trend of the market was lower, there were plenty of short-term rallies – similar to what we saw in the market last week.
Last week’s rally is indicative of the types of oversold rallies we saw in 2008. The market would stretch far into oversold territory.
Sentiment would get horribly bearish. Then we’d get a one- to four-day “wonder rally” that crushed the folks who held short [placed bets that stocks would fall] and got everyone else all “bulled up” for a big move higher. Then the market would reverse and head lower again.
That may sound pessimistic. But it doesn’t have to be.
I (Chris) caught up with Jeff last week at his home in California. I wanted to get his read on the turbulence we’ve been seeing in stocks lately.
Perhaps controversially, Jeff told me that he’s looking forward to the next bear market. Jeff…
What made me money in 2008 was not necessarily shorting stocks, it was trading the extreme conditions. I would wait until things got incredibly oversold – like we saw over this Thanksgiving week – and then buy stocks. And then, we’d get these wicked two and three day rallies.
For my subscribers and me, bear markets aren’t a bad thing. People make fortunes based on the decisions they make during bear markets. If you’ve got cash during a bear market, it’s a wonderful time.
It may sound crazy if you’re a long-term investor… not a short-term trader. But here’s Jeff with more about why he’s excited that we’re closing in on a bear market…
The idea of being able to buy stocks where they were back in 2008 excites me. And I’d urge our readers to think of bear markets in optimistic terms.
Bear markets are just Black Friday sales for stocks. Pretty soon, stocks are going to go on sale. And you’re going to get the chance to buy quality companies at dirt-cheap prices.
And as traders, my readers and I can use the volatility to actually up our profits. In fact, I’m telling my readers that 2019 is going to be an amazing year for traders.
If you’re interested in following along with Jeff’s daily trading ideas… and learning more about how to turn bear markets to your advantage… do yourself a favor and sign up for his Market Minute e-letter.
It’s hands down one of the best resources on trading in all kinds of markets – including choppy markets like the one we’re in today. And it won’t cost you a cent. Sign up here.
On Thursday, December 6, at 8 p.m. ET, Jeff will be pulling back the curtain on a trading technique he developed. He uses it to make 400 to 500 short-term trades a year with his own money.
During Thursday’s broadcast, Jeff will be walking you through a live trade, with his own account, on camera. And he’ll be talking through a few trading ideas he has his eyes on right now that may trigger in the days ahead.
Switching gears…
Last Thursday, reader Charlotte E. stood up for Michael M., your fellow reader whose comments on November 19 sparked a debate around pot legalization that’s still going strong in the mailbag.
And we asked you: Should the government take an active role in regulating the pot industry? Or should we be allowed to put whatever we want into our bodies?
Here are some of your replies…
Right on, Charlotte E. Give ‘em hell and stay well!
– Farnsworth F.
To Michael M.’s comment that people have to pick between individual freedom and societal control, I ask why? Why can’t I believe in a high degree of individual freedom and personal responsibility, while also believing in some kind of societal censure for those who are not responsible?
Isn’t that the problem with current political discourse – that we are increasingly being told we have to choose the better of two ridiculous extremes?
– David D.
“Or should we be allowed to put whatever we want into our bodies?” You’ve already lost the battle. Subjugated peoples are “allowed.” Free people “decide.”
– Jeff G.
Yes, the government should take an active role in regulating the pot industry, but no more so than the regulation of other recreational drugs such as tea, coffee, alcohol, and tobacco.
If it only affected us, then we should be allowed to put whatever we want into our bodies, but many of these drugs do damage to our body, and then we expect society to help pay the medical costs for the damage that we have inflicted on ourselves – costs that are our own responsibility.
As long as we expect society to clean up the mess we make, society should have a say in controlling the mess we are making.
– Bruce P.
Do you agree with Bruce P. that society should have a say in controlling what we put in our own bodies? Or is there no room for regulation in a truly free society?
Let us know your thoughts at feedback@legacyresearch.com. We read every email you send in.
Regards,
Chris Lowe
December 3, 2018
Dublin, Ireland
P.S. Did you miss last Wednesday’s special evening with Doug Casey, Bill Bonner, and Mark Ford? More than 20,000 of your fellow readers signed up to hear these self-made millionaires spill it all about how they built their personal fortunes… and where they’re putting their money now. If you didn’t have a chance to tune in, catch the replay here before it’s gone.