Though the stock market is seeing some good fortune, Chris Johnson says major market signals in the financials sector are reading for disaster.
That's why he's recommending this bearish options play – to help you profit on the downside of the banking industry.
Check it out, in this the latest from Fast Profits with Money Morning...
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As the Fed continues cutting stimulus checks, the proverbial Band-Aid of economic relief, gold stocks are on the rise…
And chief among them, a prime trading opportunity is beginning to shine…
It's already flashed multiple positive trading signals, and according to pro-trader Chris Johnson, this only the beginning of profit potential here.
Check out the full trade details in this, the latest from Fast Profits with Money Morning...
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As the Fed desperately tries to prop up the American economy, the U.S. dollar is wasting away…
Well for once, inflation works out in your favor, because this week's Fast Profits option trade could be your last defense from the government's reckless intercession.
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The Federal Reserve's promised to be the support pillar that holds up America's capital markets.
And they've promised to hold up the economy no matter how bad things get.
Too bad the price America's paying – our way of life – is too high.
Here's the short story of how the Fed hijacked free markets and ushered in socialism – and how to win our freedom back… Full Story
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The majority of stock market predictions for the rest of 2020 say equities will turn south and likely re-test the March lows.
The forecasters cite the seemingly endless drumbeat of terrible economic news.
But none of that has stopped stock prices from surging higher.
It's a contradiction that has puzzled many investors. Stimulus is part of the answer.
But one unprecedented move by the Fed is the real reason for the rally...
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Traders woke up Thursday morning thinking 8:30 a.m. was going to set the mood for the day. That's when the Department of Labor was scheduled to release its weekly number of new unemployment claims made the previous week.
As it happens, the numbers were awful, at 6.6 million new applicants. That's in addition to the 6.9 million the week before, and 3.3 million two weeks prior.
In other words, an astonishing 16.8 million Americans have lost their jobs in just three weeks. That beats the records set during the Great Depression by several times over (of course, the U.S. has a much larger population now – but still…)
This weekly number was also way worse than expected, with analysts estimating something between 3 million and 5 million new claims.
But instead of dropping, markets opened up more than 1.5%. It's as if 6.6 million people losing their jobs in a single week won't affect companies negatively.
Well, in the short term, that may be the case. Because at almost the same time that the Department of Labor released its data, U.S. Federal Reserve Chair Jerome Powell went on air.
What he announced sent pre-market trading skywards. It was yet another stimulus plan, for another $2.3 trillion.
This time, the Fed will be guaranteeing loans made to states and municipalities, and also to households.
But the most important piece of the announcement has the Fed doing something it has never done before…
And it sent one part of the market up three times more than the Dow.
Should you jump on the bandwagon? Here's what I think… Full Story
Should you jump on the bandwagon? Here's what I think...
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Pundits of every stripe thought the Federal Reserve was out of ammunition to keep the economy afloat while the world battles the coronavirus.
However, over this past weekend the Fed pulled out all the stops.
All that's left to throw at the economy is the kitchen sink.
Wall Street liked what it saw.
At first.
Stocks bounced up on the news before sinking into the red by yesterday's close.
But there's an even bigger problem...
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The Fed's been taking some desperate measures lately in these desperate times.
But markets haven't fully priced in their rescue and recovery programs for what they really are, which is an admission that "this time is different" and it's too late to stop what's going to happen next.
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If you think the Fed's going to fire hundreds of billions or trillions of dollars of "stimulus" rounds at the coronavirus crisis and pierce its grip on mankind, on the market, and on the economy, you're wrong.
This is an existential threat to humans, markets, and economies, which the Fed's ammo can't kill – but it sure can make it worse.
Here's what the Fed's doing, what it's going to do, why it won't work, how you'll know it's not working, and how it's going to make everything worse…
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Central banks to the rescue?
Good luck with that.
The U.S. Federal Reserve tried to swoop in and save the market panic with a 50-basis-point cut on Tuesday. But lowering rates, even a "concerted" lowering of rates by several central banks working together, in the face of already low rates, isn't going to be economically stimulative.
Central banks lowering rates now is like opening the barn door after the horses have already bolted.
Lower rates aren't going to get consumers out if they're scared to go out – or if they can't go out. They aren't going to induce capital spending by companies if companies don't know where demand will come from or when it will come back.
Besides, the flight-to-quality trading that's driven hundreds of billions of dollars into U.S. Treasuries, for example, has already lowered rates dramatically.
When the coast is clear and the coronavirus is behind us, central banks will have to start pulling back the stimulus they intend to flood economies with. Markets know that's the other side of lowering rates in an eventually passing crisis.
So no, lowering rates isn't going to put a hard and fast support under weak markets.
Markets are looking at economies and sales and revenue and earnings and profits… and now losses. Those economic realities are reflected in stock prices.
We're not out of the woods yet. But this will tell us when we are… Full Story
We're not out of the woods yet. But this will tell us when we are... Full Story
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