Most people think the markets are complex and difficult to understand.
But if you’ve been reading my newsletter here, you should have a totally different point of view.
Because one of the best tools that anyone can apply to understand markets is, on the surface, one of the simplest…
And it’s one I’ve spoken to you about at length…
Stock Charts Don’t Lie
You must learn how to correctly read a stock chart.
This simple ability puts you above 80% of all market participants.
In fact, arguably more than that.
Here is what I mean…
Bloomberg released an opinion piece about a supposed “short squeeze” happening to many of the most famous financial commentators and their stocks.
A short squeeze is a financial problem for investors with short positions. As a reminder, short positions gain value when the price of the underlying asset goes down.
During a short squeeze, however, other investors generate enough buying volume to drive the price up, “squeezing” the investors who initially bet that the asset’s price would decline.
Bloomberg’s position is that many of the best financial commentators have been mostly negative on the performance of U.S. equity markets and now have experienced a virtual “squeeze” on their forecasts as U.S. markets rise.
Here’s an example:
Source – Bloomberg
Note the date – July 20, 2023.
Now, let’s take a minute and pull up a chart of the S&P 500 for 2023…
You will see the trend since March has been up, very strongly so.
Don’t Bet Against the Trend
One of the secrets to stock market success is this: Don’t invest against the trend.
Reading further into this opinion piece is telling. You can see that the Piper Sandler analyst raised their target for the S&P 500, yet it’s still lower than where the index is today.
Here’s the explanation from the article itself. The emphasis added is my own.
That squeeze has forced strategist after strategist to revise their year-end call upward, with Piper Sandler’s Michael Kantrowitz becoming the latest to do so on Thursday.
The most bearish strategist in the poll conducted by Bloomberg’s Lu Wang in January, Kantrowitz raised his initial target of 3,225 to a range of between 3,600 and 3,800. Going with the lower end of the forecast, that implies a drop of as much as 20%, the most popular definition of a “bear market,” over the next five months.
Incredible. The setup we have today has been repeated over and over again in history.
The setup today, right now, is bullish!
How can they continue to get this so wrong? The answer should be obvious to you now.
They cannot read a chart.
What to Believe?
So what should you take more seriously…
An opinion piece in a supposedly revered and legitimate financial media like Bloomberg… or the one thing that can’t lie to you – a stock chart?
And then imagine if you knew the history of the 18.6-year real estate cycle and could properly forecast the direction of the markets?
Well… now you can.
On Wednesday, I went live to tell everyone about the Eleventh Hour – the time we’re currently experiencing in the markets – and how if you had listened to me and the charts back in April, you could be tripling the S&P 500 right now.
Instead, so many people are constantly led astray by economics “experts”…
Look, my mission is to teach the most people I can about my life’s work… and help them make accurate market forecasts… so they can create generational wealth and retire well.
Fortunately, if you missed Wednesday’s event, there’s a replay available. Check it out here.
Regards,
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Phil Anderson
Editor, Cycles Trading with Phil Anderson