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April 15, 2025
I still see
STOCKS GOING SUBSTANTIALLY LOWER
Do NOT be looking for “the bottom”
On Thursday,
April 3 (see chart following), retail investors bought $4.7 billion worth
of equities, which made it THE SINGLE BIGGEST ONE DAY INFLOW OF MONEY INTO
STOCKS…BY THE PUBLIC…IN THE PAST 10 YEARS.
This buying occurred on the 1680 point down day following Trump’s
“Liberation Day” announcement, with the Dow in the middle of a 4 day,
roughly 6000 point crash, with much of the buying being reported as having
gone into big, heavily touted companies like Amazon and Nvidia.
If you want to
believe that “everybody buying” is bullish, go right ahead…But I see it as
EXTREMELY BEARISH…I would offer that 99% of those investors
were doing so based on the bullish perspective that Wall Street’s FOREVER
WRONG “advisers, analysts, and strategists” (all three terms are a joke)
have been clinging to for what is now an 8000 point drop in the Dow…As I am
always reminding you, NONE of these paper market values are real. They are
all a function of the hype and supposed “logic” that is generated by the
Bank and Brokerage House Media…and unfortunately, all those well-spoken,
well dressed, and intelligent sounding New York internet boobs are THE
primary source of information for the world’s individual investors, and
more specifically, where the masses get their PERSPECTIVE…And taking it one
step further, when NONE of those supposed “experts” saw ANY of this coming,
the fact that their biggest followers (the public), in the midst of a true
meltdown, were BIG BUYERS, in my opinion, is NOT a BULLISH SIGN…I mean,
really, for as long as I’ve been around this GAME, no matter what happens
in the markets, Wall Street always comes out OK, but THE PUBLIC ALWAYS GETS
REAMED…and with “everybody buying” last week, and NOT running for the
exits, I CAN ONLY SEE IT AS A CONFIRMATION THAT THIS TRUMP INFLICTED
DISASTER IS FAR FROM OVER…and I don’t care what sectors he starts “trying
to help out” right now, I don’t think it matters.
And, WHAT ARE WE HEARING FROM
WALL STREET…again from those guys who saw NONE of this coming…
I think this screen shot from today says it all…
There’s kind of an idea out there that all this tariff
stuff is worrisome, and yes, some of Wall Steet’s geniuses have “revised
our S&P forecasts downward,” or thinking, “Maybe there’s more to go on
the downside,” but I’m not seeing any TRULY BEARISH opinion from anywhere…I
mean, I’m sure there must be some negative thinking going on, but most of
what I’m seeing is along the lines of, “Stocks you should be looking at
buying here,” or “Just wait this out,” and NOT anything close to, “Take
some money out NOW. We’ve never seen the market drop this fast and this
hard. SOMETHING IS WRONG!” So, believe me, when this downswing IS about
to be over, NOBODY WILL BE
WONDERING, “IS THE MARKET BOTTOM IN PLACE?.”
They’ll all be more like, “No Bottom in Sight!”
I continue to think that
this debacle has a LONG way to go on the downside and continue to recommend
shorting the Stock Indices here.
AN IMMEDIATE BET ON LOWER INTEREST RATES
If this IS what’s coming,
THE FED WILL ALMOST CERTAINLY START LOWERING INTEREST RATES…and NOT “later
this year. I think it would mean, pretty much, RIGHT NOW.
So this is the real play right now…in Interest
Rates…which I see as having a LOT of leverage…
I see the odds being quite high that the recent recovery
in stocks fails, and SOON, regardless of whatever backtracking or boosting
Trump tries to do now…and in as little as a few weeks from now we could be in a REAL
panic…and THE FED WILL ABSOLUTELY HAVE TO LEAVE THE SIDELINES AND
AGGRESSIVELY LOWER SHORT TERM INTEREST RATES…AND THEY WON’T BE MOVING IN
QUARTER PERCENT INCREMENTS…I THINK IT COULD COME IN HALVES OR WHOLE PERCENT
MOVES.
AND…when the Fed does
move to lower rates, if the past is any guide, the SOFR FUTURES contract
below will already having begun the process…by which I mean, this Short Term Interest Rate contract will already have
rallied substantially by the time you first hear that phrase, “EMERGENCY
FED MEETING has been scheduled.”
And this is what you buy:
JUNE 2025 SOFR 9600 CALLS
SOFR (Secured Overnight
Financing Rate) Futures reflect changes in short term (90 day) interest
rates. They have replaced the Eurodollar Futures (which tracked LIBOR) that
we successfully used 4-5 years ago in anticipation of the Fed raising
rates…which is exactly the opposite of what I think is coming here.
I DO think a market led economic panic is ahead…and
can easily envision the perpetually behind-the-curve Fed suddenly being
forced to sharply…and immediately…lower interest rates in, MINIMALLY, ½ PER
CENT INCREMENTS…And if I am
right, the SOFR contract below could truly explode on the upside.
Here is the Call Option I
like here…
I’d also add that you can
also go out to September…but I do think this is a “here and now” situation
and the biggest leverage is in the June contract.
Call if you’re
interested…I’d also LOVE to hear YOUR take on where everything is
headed…whether you agree or disagree with me.
Thanks,
Bill
770-425-7241
866-578-1001
All
option prices in this newsletter include all fees and commissions. All
charts, unless otherwise noted, are by Aspen Graphics and CRB.
FUTURES
TRADING IS NOT FOR EVERYONE. THE RISK OF LOSS IN TRADING CAN BE
SUBSTANTIAL. THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE
FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST PERFORMANCE IS NOT
INDICATIVE OF FUTURE RESULTS. THERE IS NO GUARANTEE YOUR TRADING EXPERIENCE
WILL BE SIMILAR TO PAST PERFORMANCE.
The author of this piece currently trades for his own
account and has a financial interest in the following derivative products
mentioned within: SOFR
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