I like how these financial markets gurus are all talking about everything but what’s required to leave the current Bear Market we find ourselves in and begin the next new bull market for equities. One guy this morning says that technology stocks must lead the way, because oil and financial stocks cannot begin a new bull market phase. “It has to be technology because only technology companies can “innovate”, none of the others.” Oh Really? What grade school did this genius come from? NOW HEAR THIS —> Only tech companies will make a profit? LMAO!

Let’s discuss my main thesis here. This stock market isn’t going anywhere past the occasional “bear market rally’, which we have seen and will see from time to time. The reason is that there is absolutely no catalyst to act as any sort of paradigm shift. In other words, no event viable enough to cause a reset of investor sentiment large enough to take something very unattractive, [stocks and bonds], and make them attractive again. That is, attractive enough for the average investor to throw his or her money at it. We are completely void of a catalyst as I look around the current investing landscape we witness today. These gurus keep saying, we need the Federal Reserve to back-off of raising rates – that’s all we need [to begin the next bull market]. I love when someone stupid says something like that – what a line of sh*t, first of all you dumbass the Federal Reserve hasn’t even begun raising interest rates. You call a 3/4 point move over a couple months against a backdrop of 15% annual inflation a move on interest rates?! What idiots some are!

On the other hand, I’m not all gloom and doom on the subject, I do offer up a couple of potential catalysts large enough so that they would change the risk assessment for the average astute investor in U.S. markets. And in a pretty short period of time I might add. I’m not talking about potential catalysts for five years down the road when posts like this one have expired. I’m focusing only on the short-term here. I offer two potential short-term catalysts large enough to turn around U.S. markets, and it has nothing to do with any particular sector of the economy:

1) I must warn you, especially if you have money in this market, you’re not going to like my first offering of a catalyst for change. But here it is – should the major U.S. stock market averages, such as the S&P 500, Dow Jones Industrial Average, and the NASDAQ fall precipitously 20% further than current index levels [at this writing], that event in itself would provide enough of a catalyst to invite risk capital back into U.S. stocks. As mentioned, not a pretty picture for those who already have money at risk in stocks. However, when you’re buying in @ 20 cents on the dollar, that will get the average risk takers attention and would provide an enticement back in. Drops like the one I’m describing would create enough of a risk-on attitude to get the ball [and frankly, the indexes] rolling in the right direction again.
2) There is one other potential catalyst that could get this market back on track in the near term. However, turn-arounds can take awhile, but in this next scenario the trajectory would be positive none the less. If Republicans were to win both Houses of Congress – the House of Representatives and the U.S. Senate in the upcoming midterm elections [November], then I would be expecting some turnaround in U.S. financial markets. However, winning only one of these two branches of government will not have as much of an overall effect. I’m insisting one true catalyst for change would be if conservatives were to suddenly make up the majority vote in both houses of Congress; leaving Biden and Co. powerless, effectively wallowing in a “lame-duck” Presidency. This is certainly a possibility, we’ll have to see…

Understand something I have harped on for literally years now – you can’t put the wolves in charge of the hen house and come out with a pretty picture. All you people out there that decided you hated Trump because you were envious of his family, his success, his lifestyle, you cringed at his Tweets, etc. You people who instead gave your votes to total incompetents – the Democrats now running the Federal Government, you are now getting what you bargained for. This is all a by-product of the collapse of free market capitalism and an intro to Socialism 101. Those of you who vote and support and protect Democrats just look in the mirror, that person you see there, that person is the real culprit for where our America is right now – all the way from Wall St. to Main St.!

I used to tell clients that I’m not always right [with my market projections/forecasts], but I’m right about 95% of the time. So I reserve the right to be wrong the other 5% [of the time]. 🙂 Again, absent of one [or both] of these potential near-term catalysts above becoming reality, I’m sorry to have to inform you that I do not see any other “thing” on the horizon that could possibly provide a large enough change in investor sentiment to enter a new bull market phase. Capital preservation is appealing quite nicely to me at this juncture. 🙂