10/9/2018 – A mixed day with the Dow Jones down 56 points (-0.21%) and the Nasdaq up 2 points (+0.03%) 

The stock market finds itself at an incredibly important juncture. Things are about to move. If you would like to find out what happens next, based on our timing and mathematical work, in both price and time, please Click Here. 

President Trump is once again not happy with the FED challenging his massive “Everything Bubble” he so correctly identified during his election campaign.

Trump Says He “Doesn’t Like What The Fed Is Doing”

Some commented that this is another sly move by the president to preemptively shift blame on the Fed chair ahead of what may be a turbulent 2019 when rates are expected to keep rising, potentially resulting in a sharp slowdown in the economy and/or a stock market crash.

It appears President Trump’s 4-D Chess strategy is clear. Blame the Democrats (assuming they win in November) when, not if, the Economy collapses. And if that doesn’t work, blame the FED and their interest rate hiking campaign. Either way, blame someone and the base should eat it up, leading to a swift re-election in 2020.

Whatever, Mr. Trump’s plan is, here is what almost all observers are missing about today’s environment.

First, the FED is raising interest rates to re-load for the next recession and market bloodbath. They know what they have done, what’s coming and what they need to do now in order to soften the blow.

And should they fail to re-load, the next recession or “Everything Bubble” implosion will end the USA as we know it.

Second, as we have discussed before FED Powell Confirms – Yield Curve Inversion Imminent, it no longer matters if the actual yield curves inverts or not. The damage has already been done by flattening and it is only a matter of time before the mother of all recessions hits Mr. Trump’s perfect economy.

Our timing and mathematical work tends to confirm all of the above. If you would like to find out exactly when the stock market will crater, in both price and time, please Click Here

10/8/2018 – A mixed day with the Dow Jones up 39 points (+0.15%) and the Nasdaq down 52 points (-0.67%) 

The stock market finds itself at an incredibly important juncture. Things are about to move. If you would like to find out what happens next, based on our timing and mathematical work, in both price and time, please Click Here. 

Our work suggests trade deficit is about to collapse. Another Trump win? Yes and no, well, depends how you look at it.

Surefire Way to Reduce the Trade Deficit: Have a Recession

Trump is desperate to reduce the trade deficit. Perhaps his trade policies will do just that, via global recession. A prolonged global trade war will add fuel to a nasty global recession.

But look at the bright side. It’s a surefire way to reduce imports more than exports. The bigger the recession, the bigger Trump’s alleged “win”.

Winning? 

Perhaps. Yet, massive trade deficits are a symptom of a cancer stricken economy, not the cause. The real cause is the FED and their insane monetary policies. There are two very important things to consider here when it comes to Trump’s idiotic trade war.

First, trade deficits are great for the stock market. The bigger the deficit the better as it suggests higher levels of economic activity. The more we buy, the higher the earnings.

This has been more true in recent decades at our trade with China has exploded. Just look at the chart above. When our economy collapsed in 2008, so did our trade deficit. And while that was a ‘natural’ correcting, Trump’s attempt at deficit reduction is anything but.

Second, history teaches us that trade wars always escalate and always end bad for all involved. Often turning into hot wars when it is all said and done. Historians and economists still argue that trade wars were the primary cause of the 1929 crash and subsequent depression. Perhaps no one can explain this better than David Stockman

Once again, the real culprit behind nearly all imbalances and ailments associated with the US Economy and Financial markets is the FED.

I once supported President Trump, even voted for the guy, primary for that reason. He clearly identified the stock market bubble and the FED as the main problems with the US Economy during the primary process. Will The Plunge Protection Team Turn On President Trump Unfortunately for all of us Mr. Trump has flipped since then, transforming into some sort of a Jim Cramer want to be stock market cheerleader.

As a result, all is lost. 

President Trump is fighting the wrong war and exactly at the wrong time (stock market bubble top). And that will lead to disastrous consequences in short order.

If you would like to find out exactly when the stock market craters, based on our mathematical and timing work, please Click Here. 

A negative week with the Dow Jones down 11 points (-0.04%) and the Nasdaq down 258 points (-3.20%)

The stock market finds itself at an incredibly important juncture. Things are about to move. If you would like to find out what happens next, based on our timing and mathematical work, in both price and time, please Click Here. 

Back in July of 2016 we were able to identify the exact bottom on a 10-Year Note. Suggesting at the time that a 30+ years bull market in bonds was finally over. It has taken quite a while, over two years, but we now have our first longer-term confirmation point.

The 30-Year Has “Broken Out” – Jeff Gundlach Warns Stocks And Bonds Are Going Lower Together

During a webcast last month, Gundlach said the effect that stimulus has on markets is akin to the effect that miracle grow can have on plants. Too much of it burns them out – which is why it’s not encouraging that deficits are widening this late in the cycle.

And if yields continue to rise, the selling rout in both bonds and equities – a twin rally that has been fueled by QE and rising US debt levels – will likely worsen. Indeed, the bond market is facing a crucial test.

During that webcast, Gundlach pointed out that the S&P 500 and US debt outstanding have climbed in tandem since the bull market began.

Gundlach finished his interview with another bold call. Namely, that stocks outside the US are already down significantly from the Jan. 26, 2018, synchronized high, “which will go down in history as the peak for the global stock market for this cycle.”

I find the above interesting for two reasons.

First, the yield curve has actually steepened over the last few days. And while some people will argue that is net bullish, I don’t see it that way. As I have argued in the past, the yield curve is already flat and doing massive damage. No inversion is necessary.

Plus, the above will give the FED more room to hike rates. Just as Power has indicated. What’s worse, at some point the yield will move down to its trendline (most likely) and that will invest the curve in a dramatic fashion.

Second, considering today’s massive imbalances and debt levels, higher interest rates will bring Trump’s Ponzi Economy to a screeching halt.  Are the bond vigilantes back, has the FED lost control, and if so, just how high and how fast will the rates go?

Finally, will the setup above absolutely crash global stocks?

We might have an answer.

If you would like to find our exactly what the stock market will do next, based on our mathematical and timing work, in both price and time, please Click Here