What the Hell Just Happened?

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What the Hell Just Happened?

After what happened the stock and cryptocurrency markets the last few days, it feels like this week should be over.

It’s been a crazy ride!

Talk about whipsaws!

And it’s only Wednesday.

Yesterday, I sent you an email explaining how stocks were at a critical point when markets opened. I followed up with a video note on Facebook.

I also did a telephone interview with Varney & Co, in which I explained that I think this might be the beginning of a much bigger correction (especially because we’ve broken below the resistance level on several of those rising bearish wedges I talked about in the January Leading Edge and this Economy & Markets).

That doesn’t mean I think it’s a straight road to the bottom from here. Listen to what I told Varney. I explain what I think we’ll see next.

I’ve been in close contact with the rest of our team, getting their take of what happened the last few days…

Rodney, editor of Triple Play Strategy and Dent Cornerstone Portfolio, suspects much of the major sell off on Monday was a result of trading algorithms kicking in and stop losses being triggered.

Charles, our Boom & Bust Portfolio Manager and editor of Peak Income and Peak Profits, said this correction has been long overdue. Whatever triggered it, it’s not unexpected. He spent the last few days letting subscribers know to get out of certain plays in the portfolio to avoid or minimize losses. Thanks to his risk management strategies, in his more conservative services, the impact of the correction was limited to lightening the number of stocks in his model portfolios. There have been a few losses, but they’ve been mostly contained to the stop-loss limits in place!

Charles recently wrote about one of the last truly cheap pockets in the market. 2018 is stacking up to be a nasty year for bond investors. The 10-year Treasury yield has jumped from less than 2.5% to just shy of 2.9% in a matter of weeks. It’s bringing us closer to our Trade of the Decade, but if you have any 401K investments, this is likely to impact you to. Read what Charles has to say about this.

And Adam, our Chief Investment Strategist and editor of Cycle 9 Alert and 10X Profits, said that this situation is touch and go. “Most of these dips have historically been worth buying,” he said. “But that says little about THIS particular sell-off. On both Friday and Monday, around 8.5 stocks on the NYSE closed lower for every one higher. That’s an extremely bearish ‘breadth’ ratio, showing the selling is widespread and indiscriminate.”

Adam also wrote a new Economy & Markets article on why this sell-off didn’t come as a surprise. You can find that here.

Harry
Follow Me on Twitter @harrydentjr

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Harry Dent

Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.