April 25, 2017

 This is NOT a fake out in Stocks…

During the past month or so, simply because the market wasn't making new highs, the majority of the ever-wrong yakheads have been preaching, “CAUTION!”, due to the budget deadline, or that "nothing is happening in Washington", or that margin debt is high…and most recently, that the French election could sink the EU (WHEN will those nitwits give up on this idea?)…In other words, same as Brexit, and same as the November election, and really, same as it was during all of last year, their primary advice has been, "Don't buy it here", and as a result, they have all  watched from the sidelines as the Dow has rallied some 5500 points since the February, 2015 lows...No other way to put it, THEY HAVE BEEN WRONG (nothing new)…right up to just a few days ago going into the French election…and I am therefore relatively certain THERE ARE STILL A TON OF SUPPOSED PROFESSIONALS WHO ARE STILL "OUT" OF THE MARKET…STILL THINKING THE MARKET IS “OVERDONE”, OR “DUE FOR A CORRECTION”, OR “TOO PRICEY”, OR “TOO HIGH TO BUY” AND WHATEVER OTHER GOBBLEDYGOOK REASONS THOSE GUYS USE AS THEIR “LOGIC”.

For my part, I continue to believe we are in a monster bull market and I think they odds are now quite high that we are about to maybe see one of the biggest, non-stop moves that we have seen in YEARS…

In reality, I am also supposing that this might be the last big rally for some time to come…that maybe we have reached that point where all of the Wall Street naysayers FINALLY throw in the towel and gleefully buy this thing with both hands…again, AFTER years of watching the market rally without them…

And when I say “this might be the last big rally for some time to come”, I do not mean the next thing we will see is a bear market…but simply that we may now be at that stage is this mob psychology game where, within the next few months, ALL of the good news for 2017 gets FULLY built into stock prices…that ALL of the stimulus coming from Trump and Congress will be accounted for, and that what I say is a ROARING ECONOMY begins to be unceasingly reflected in the monthly economic statistics…to the extent that several months from now there will be NOBODY left among the Wall Street geniuses who hasn’t become a full blown buyer…And THEN it might be time for the market to have that “correction” they’ve all been predicting for 1000’s of points…But as I said, all of that is further down the road…maybe.

THE BOTTOM LINE IS I THINK THE RALLY BEGUN YESTERDAY MORNING IS THE REAL DEAL…THAT WE ARE ABOUT TO SEE A MOVE SIMILAR TO, BUT BIGGER THAN, WHAT WE SAW AFTER BREXIT AND THE AFTER THE NOVEMBER ELECTION…AND I WOULD NOT BE SURPRISED TO SEE THE DOW PUNCHING 22,500-23,000 WITHIN THE NEXT 6-8 WEEKS.

And together with that, and with all doubts about the strength of the USA and World Economies TOTALLY disappearing, I look for the 4 month consolidation in Eurodollars to end…and IMMEDIATELY begin a non-stop move to the downside as interest rates begin to move rapidly higher…I therefore continue to recommend buying Eurodollar puts, now focusing on the September and December contracts.

Here are what I consider to be a few pertinent charts…

Think about it…Just a few days ago, were ANY of the talking heads supposing we’d be up almost 500 points in the Dow by today…or that the NASDAQ would be banging into new all time highs? Guys, EVERY top I can ever recall in stocks was accompanied by all sorts of giddy euphoria…And that is NOT present anywhere today…

Here are the two options I like at current levels…

And DO note…This market IS in a downtrend...and I think it resumed yesterday...and that this contract IS now ready to leave a 4 month consolidation and drop precipitously lower…

I Still think this is one of the biggest trades I’ve ever seen…And I keep reminding myself, and you, that just because it has been SLOWLY going the right way, does NOT mean it will continue at that pace…This stuff DOES consolidate…and it DOES MOVE & IT DOES ACCELERATE…

Everybody can’t afford to fly...and I have long considered the airport as a sort of in-your-face indicator as to the inherent “health” of the economy. When I left on vacation several weeks ago, on a Wednesday morning, I can honestly say that I have NEVER seen anything close to the crowds that were there with me…like waiting in line to get in line with another 100,000 people for the Superbowl or something… And again it was the same on a Saturday morning in Seattle on the way home…The point is, THIS ECONOMY IS JAMMING…AND…I BELIEVE IT IS ACCELERATING. I CONTINUE TO MAINTAIN THAT THE FED IS FAR BEHIND THE CURVE AND THEY WILL (AS HAS BEEN SO MANY TIMES IN THE PAST) BE PLAYING CATCH UP AS WE GO FORWARD IN TIME.

I know the move sideways has been discouraging for some of you…but the truth is, it has only made options cheaper and increased the leverage and potential I believe they have…So if you can, I encourage you to consider increasing the size of your position…Believe me, I’m human and I get scared that I might be wrong, or discouraged, just like anybody else, but in the end (especially with a clear head after being away…TOTALLY…from this stuff for 9 days) I do know what you are supposed to do here…which is GET MORE…and that is precisely what I am doing.

Thanks…Ring me up if you want to talk about it…

Bill

770-425-7241

866-578-1001

All option prices in this newsletter include all fees and commissions.

The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Eurodollars