From 1665 to 1666, the Great Plague of London claimed almost 25% of the city’s population.
And during this last major bubonic plague epidemic in England, many English universities sent students away from campus.
One in particular – Isaac Newton – was stuck at home 60 miles away from prestigious Cambridge.
But this social distancing was a lot different from our version today. There was no Netflix to binge-watch or video games to play. There were no ways to work or learn online from home.
So to occupy his time, Newton became immersed in self-study.
He fine-tuned concepts that would become the foundations for calculus… developed hypotheses on prisms, light, and optics… and conceived his theories on gravity and the laws of motion that would permanently write his name into history books.
Of course, I’m not suggesting we can all emerge from coronavirus quarantine with our own genius, history-altering theories. But it’s a reminder that positive things can come from this mandatory isolation.
And as you know, I’m using this time to collect and analyze market data. Because I want to keep you updated during these unprecedented volatile conditions.
So today, I’ll go over the positive signs the numbers are indicating – and how they can lead us to profits, even during what feels like dark times…
This Isn’t the Great Depression
The ugly news headlines want us to focus on the negatives – like the mounting number of deaths and global economic shutdown. Many people are bearish, bracing themselves for disastrous effects.
Take Ray Dalio, for example. He’s the founder of Bridgewater Associates, the world’s largest hedge fund. And he believes another Great Depression is coming.
But looking at the numbers, it’s simply another fear-based spin…
During the Great Depression, the Federal Reserve was in tightening mode and raised interest rates.
Yet today, the Fed has effectively cut rates to zero and is injecting at least $2.3 trillion in additional liquidity to the U.S. economy. (This doesn’t even account for the trillions of dollars being pumped into the global economy by banks in Europe and Asia as well.)
With this “easing” going on worldwide, I don’t believe it’s fair to compare what we’re going through now to the Great Depression.
This is why I created my “unbeatable” stock-picking system – to remove emotional spin like this and uncover where the market’s really headed…
The Market Is Rebuilding a Solid Base
Remember, I used my experience from nearly two decades at prestigious Wall Street firms – regularly trading more than $1 billion worth of stock for major clients – to make sure my system is highly accurate, comprehensive, and effective.
It scans nearly 5,500 stocks every day, using algorithms to rank each one for strength. It also looks for the buying and selling movements of big-money investors in the broad market.
And right now, it’s saying stocks have bottomed. Just take a look at my system’s Big-Money Index below…
Now, when the index hits 80% (the red line in the chart) or more, it means buyers are in control and markets are overbought. And when it dips to 25% (the green line) or lower, sellers have taken the reins, leading the markets into oversold territory.
As you can see, since it hit 9% on March 27, it’s risen back almost to the 25% level. So we’re starting to head out of oversold conditions.
This means selling has evaporated and the major liquidations are behind us. And we’ll start seeing big-money buying take over in the markets again soon.
Plus, volatility is decreasing. In fact, the market’s “fear gauge” – the CBOE Volatility Index – has fallen from an intraday high of over 85 on March 18 to around 43 today.
Now, we need volatility to continue dropping to around the 20 level before we’ll fully stabilize. But investor sentiment is improving. And stocks are finally starting to rebuild a solid base…
A Post-Coronavirus Economy Roadmap
Again, my system has been correctly predicting the market’s moves during this painful crash. (It even called the March 23 bottom almost to the day.) Here’s what it’s indicating next…
In the first half of May, we’ll likely see the first signs of businesses reopening. However, we won’t see a functional “soft” opening of the entire economy until June.
We should be back to a more normal level of economic activity in September. It won’t be exactly like pre-coronavirus levels. But it’ll be a start.
By December, we’ll start seeing growth again. And around this time next year, stocks will be up by double digits again.
Remember, we’re not out of the woods yet. We’ll likely see a few more short-term pullbacks along the way.
Worst case, the S&P 500 might test the 2,550 level again. But I don’t see us revisiting 2,200 any time soon.
Timing the bottoms isn’t what’s most important, anyways. Instead, the key is identifying the right stocks to buy while the market is down.
We know the market will rebound higher. So we just need to focus on finding the highest-quality stocks that’ll soar even higher as this “Great Reset” kicks in.
And my system does exactly that. I even put together this special presentation to show you how it spots the best-of-the-best stocks – before they rocket higher.
As always, I’ll keep an eye on the markets for you in the coming weeks. We just need to focus on the data and facts rather than our emotions.
So stay calm and make the most of your “free time.” Spend it with your family and pick up some new hobbies (or refine old ones).
I’m actually using some of mine to learn a new programming language and finish several music projects.
Just keep this in perspective: 2020 is still full of opportunity. And we’ll get through this together.
Patience and process!
Jason Bodner
Editor, Palm Beach Insider
P.S. As I’ve told you these past few weeks, the Great Reset is here. And some stocks will rise much higher than the overall market – like phoenixes rising from the ashes. But you can profit from these “phoenix” stocks, too.
All you have to do is join me and my subscribers right here. You’ll see how my system can help you make potential average gains of 2,505% as they rocket higher during the market’s rebound.