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    Profit from Suddenly Soaring Tax Collections by Using This Strategy

    By , Liquidity Specialist, Money Morning -

    Withholding tax collections soared in the second half of November after a very weak start. Is the surge an anomaly, or is it a sign of a final explosive blowoff in the U.S. economy? Maybe it's both. We'll need to watch the data in the next few weeks to see how quickly this surge dissipates. They always do.

    Over the years I've been tracking withholding tax collections, I have noticed that just as J.P. Morgan said about stock prices, "tax collections will fluctuate." There's a regular cycle of increases and decreases that typically runs two to four months. The surge that we just had is much larger than normal, but typical time wise. The next pullback is due to start any day now.

    Now, you may be wondering what these withholding taxes tell us about today's employment report, coming soon to a TV screen or web browser near you. Unfortunately, there are too many conflicting signals in the data to draw conclusions about the November jobs report.

    With apologies to Hall and Oates, it doesn't really matter anyway. You can rely on the Fed's less money, you can rely on the less Fed's money.

    With that in mind, here's what we can learn from this data that is absolutely critical to the health of your portfolio...

Article Index

Profit from Suddenly Soaring Tax Collections by Using This Strategy

By , Liquidity Specialist, Money Morning -

Withholding tax collections soared in the second half of November after a very weak start. Is the surge an anomaly, or is it a sign of a final explosive blowoff in the U.S. economy? Maybe it's both. We'll need to watch the data in the next few weeks to see how quickly this surge dissipates. They always do.

Over the years I've been tracking withholding tax collections, I have noticed that just as J.P. Morgan said about stock prices, "tax collections will fluctuate." There's a regular cycle of increases and decreases that typically runs two to four months. The surge that we just had is much larger than normal, but typical time wise. The next pullback is due to start any day now.

Now, you may be wondering what these withholding taxes tell us about today's employment report, coming soon to a TV screen or web browser near you. Unfortunately, there are too many conflicting signals in the data to draw conclusions about the November jobs report.

With apologies to Hall and Oates, it doesn't really matter anyway. You can rely on the Fed's less money, you can rely on the less Fed's money.

With that in mind, here's what we can learn from this data that is absolutely critical to the health of your portfolio...

This Fed Document Is the Closest Thing Investors Have to a Crystal Ball

By , Special Situation Strategist, Money Morning -

Today we are going to talk about the Federal Reserve.

While I am aware that a certain percentage of you have now clenched your fists in rage and are mumbling about the vast global conspiracy, the Illuminati, and the trilateral commission, and another segment of you are yelling about gold standards and the evils of fiat currency, let's table all those conversations for another day.

The Federal Reserve may not be the best way to manage our nation's money supply, but it's what we have and what we will have for a very long time to come.

Whatever you think of the Fed and their policies, you cannot debate this one thing: When it comes to collecting and distributing economic information, they are unsurpassed by anything on the planet. They have tremendous resources, and they do not hesitate to share all that data with taxpayers.

I pay very close attention to reports from the Fed for the simple reason that they have more data than anyone else. Reading the Beige Book and other informative releases from the central bank gives a much better picture of the U.S. economy than all the talking heads and pen-wielding experts combined.

We can listen to the chorus of doom and gloom or the cheerleaders who predict easy money and vast fortunes ahead, or we can pay attention to what the actual data is telling us. 

The data is giving us a crystal clear overview of how banks, as well as individual and business loans, are faring.  

So let's take a look at how we should divvy our finances, given the banking data from this important document the Fed just released...

Here's What to Expect as the Stock Market Top Nears Completion

By , Liquidity Specialist, Money Morning -

Bull market tops are long, drawn out processes, often lasting 18 months, give or take. But they are predictable. They happen when the central bank decides that enough is enough.

I warned in 2017 that when the Fed started talking about balance sheet reduction, the process of ending the bull market and beginning a bear market would be at hand. Indeed, the Fedheads started discussing it publicly that summer, and in September, they made it official. They began balance sheet "normalization" in October of that year.

What that meant, in short, was that the Fed would begin to – literally – pull money out of the banking system and extinguish it, month by month. The Fed published a schedule of reductions that would ratchet up from $10 billion per month in October 2017 to $50 billion per month in October 2018. 

Under Quantitative Easing, which was supposed to be an emergency program to prop up the financial system as it was collapsing during the 2007–2009 crisis, the Fed bought U.S. Treasury bills, notes, and bonds, and mortgage-backed securities directly from Primary Dealers. The Fed ballooned its total assets in its System Open Market Account from $800 billion to an insane $4.5 trillion.

That "emergency" program turned into a long-running scheme to inflate bubbles in the stock and bond markets. It lasted from late 2008 until late 2014. The Fed then undertook a program of rolling over its Treasury holdings and buying just enough MBS to keep its total assets at that inflated level.

The Fed got what it wanted: massive asset bubbles in stocks and bonds, plus an echo bubble in U.S. housing prices.

It decided that enough was enough in September 2017 and announced its program to "normalize" both the size of its balance sheet and the level of interest rates. "Normalize" was just a euphemism for shrinking the balance sheet.

I saw that as the death knell for the bull market. And now it's playing out.

Here's what "normalization" is doing now, and how to protect your assets and profit from the market reaction...

Here's Why the "Fear Gauge" Shouldn't Frighten You

By , Capital Wave Strategist, Money Morning • @WallStreet_II -

Volatility Index

The wild swings we see in the stock market aren't the result of volatility.

Volatility results from the wild swings, not the other way around.

One thing investors don't understand is the CBOE Volatility Index (VIX), sometimes called the market's "fear gauge", isn't predictive. It isn't a leading indicator; it isn't telling us what the future holds. It's misleading.

If you didn't know that, chances are you may not understand what's really causing wild market swings.

Here's your quick fix on the VIX, and how to avoid falling into the fear gauge's trap...

Here's How to Profit from Plummeting Homebuilder Stocks

By , Liquidity Specialist, Money Morning -

Housing is an issue for all of us – as investors and as ordinary people in need of a roof over our heads.

As investors, there's always lots of housing news toward the end of the month.

The National Association of Realtors releases its "pending" and "existing" home sales reports, which include sales volume and prices, every month. The Commerce Department releases its New Home Sales report.

I like to keep you updated on those reports here.

The news in late October wasn't good. I have been warning about this for months.

Homebuilding stocks have tanked since I suggested in early October that they were ripe to be shorted. It was an opportunity for big profits.

So should we harvest those profits now?

Here's what you need to know from the latest housing data...

Stocks Can Make You Rich – but Could REITs Make You Richer?

By , Special Situation Strategist, Money Morning -

I love real estate.

And I love it for one good reason.

Outside of owning a successful business, the top way to get rich is investing in real estate.

Most of us will never be real estate developers, but thanks to the miracle of REITs, we can own all sorts of sod real estate investments. We can own skyscrapers, warehouses, cell towers, apartment buildings, and just about any type of property we wish.

And here's the best part about it: We never even need to speak to a real estate agent.

With the click of a mouse, we can become an owner of farms, senior living facilities, and even medical cannabis facilities.

So today, I want to take a deep dive into how you can make a ton of money investing in REITs as opposed to stocks.

And I'll even reveal how you could have made $385,000 more if you had invested in them over a long period of time.

Click here to see...

This Is How You Can Profit in Any Market Condition

By , Capital Wave Strategist, Money Morning • @WallStreet_II -

If you were with me at the Black Diamond Conference in beautiful Carlsbad, Calif., last week, or if you watched with us via the live webinar, I hope you found the presentations helpful – and profitable.

But if you weren't with us last week, don't worry. There's still a chance for you to see what my colleagues – Michael A. Robinson, Tom Gentile, and Rick Rule, to name a few – and I were talking about. My team and I will tell you all about it later this week.

In the meantime, I have a special treat for you.

You've been hearing the words "volatility," "crash," or "catastrophe" so often that it's probably starting to get old. That, or worry you more. Either makes sense.

But today, I'm going to share with you something I usually only reserve for readers of my elite trading research service, Zenith Trading Circle. And I don't do this often, folks.

Today, I'm going to give you a peek inside Zenith.

I'll tell you what you shouldn't be worried about, what you should look out for, and, most importantly, how you can profit in the face of it all...

How to Spot a Housing Bubble and Sell Before the Peak

By , Liquidity Specialist, Money Morning -

In 2005, as the prices in housing were going crazy, and as sales volume was at radical levels, I sold my house in Florida.

In other words, I cashed out on my housing investment at nearly the perfect time, just before selling opportunities had dried up and the housing market completely collapsed.

I had bought my house at the bottom of the market in 1991 because I saw the discounts – and because of the panic at that point, the value was just too good to ignore!

By 2005, the price of my house had tripled from the price that I had paid for it. And I had bought it with virtually no money down. So I was sitting on a tremendous profit.

I had become increasingly nervous about the state of the market and felt like I just wanted to grab the money and run.

And run I did!

I allowed the market shake out over the next few years, and it turned out to be one of the best decisions of my life.

So today, I want to reveal to you a similar opportunity – a housing bubble that we are nearing the end of right now – and show you how you can profit.

But first, a little more about the previous bubble...

Why You Should Ignore the Record-High Consumer Confidence Index

By , Liquidity Specialist, Money Morning -

It's easy to be fooled by the mainstream media, which is pumping positive headlines about consumer confidence.

The mainstream media always toes the line. And right now, it's touting sentimental viewpoints in exclamatory prose, but it's ignoring the facts beneath the surface. 

Just take a look at what The Wall Street Journal is saying:

"US Consumer Confidence Hits Highest Level Since 2000," it blared in a headline Sept. 25. "Strong economy and robust job growth bolstered consumers' sentiment," said the subhead, in reporting on the Conference Board's monthly Consumer Confidence Index (CCI).

And how about CNBC:

"Consumer Confidence Hits 138.4 in September, Vs. 132 Estimate," it said in a similar headline.

But despite all these optimistic claims, there's a little-known secret about the CCI that most people don't know, and it's revealing a totally different story than what the mainstream media headlines are saying.

I share it with you here today...

The "Great Bull" Isn't Dead… but What Comes Next May Surprise You

By , Chief Investment Strategist, Money Map Report • @kfgtotalwealth -

Here we go again.

I spooled up my trading desk the morning of Sept. 19 and learned from the headlines screaming across my monitors that the "Great Bull" market is "dead," according to Michael Hartnett.

You may know the name, you may not.

I did.

Hartnett is Chief Investment Strategist for Bank of America Merrill Lynch and a brilliant thinker.

Still, we've heard this before...

Stop Letting People Scare You About "Margin Debt"

By , Technical Trading Specialist, Money Morning • @DRBarton_Stocks -

As we all know, Alice's wildly varying sizes caused her a great deal of trouble in Wonderland – especially when, no bigger than a playing card herself, she ran afoul of the murderous Queen of Hearts.

Then she began to grow. And suddenly, the tiny queen shouting "Off with her head!" looked much less frightening.

In other words, size is important – but perspective is more important – particularly in the markets right now.

That's especially true for one "frightening" indicator: margin debt.

Margin debt is just money that is borrowed to buy stocks. Most retail accounts can borrow 100% of their account balance to buy additional stock at fairly low interest rates.

Analysts use margin debt as one measure of market participants' risk appetite, and I've read some articles worrying about the fact that margin debt is at all-time absolute highs.

But that's not the whole picture.

The good news is that while margin debt is "big," there's a positive indicator that's even "bigger"...

CNBC Just Posted Fake Inflation News – Here's the Real Story…

By , Liquidity Specialist, Money Morning -

A lower-than-expected Consumer Price Index release on Sept. 12 sent the stock market rocketing higher.

But has anything really changed?

And does it mean anything for our bearish stock market outlook and strategy?

After a quick glimpse at how the media handled it, we'll take a deeper dive into the numbers to see what's really going on, versus the Wall Street media narrative.

Click here to see...

Ignore Turkey – Something Else Is Skewing the Markets Here

By , Liquidity Specialist, Money Morning -

Stocks fell sharply on Wednesday – then they gained it all back, and even rose a little further, on Thursday.

Ostensibly, that was because the Turkey crisis deepened on Wednesday and was resolved on Thursday.

The market's gyrations are enough to make your head spin.

And so are the changing stories.

But I don't buy them.

Instead, I have a theory on what is actually driving these market movements, and I want to share it with you today...

Take the Long-Term View in a Late-Cycle Market

By , Guest Writer, Money Morning -

Late-cycle market

Here's the latest from our Special Contributor, Frank Holmes, on the late-cycle market and how taking a long-term view is the best way to play it.

Frank looks at several factors affecting U.S. inflation and the opportunities you shouldn't be missing...

Your Gut Feeling Is Right: You Are Worse Off Now Than During the Recession

By , Liquidity Specialist, Money Morning -

Your Gut Feeling Is Right: You Are Worse Off Now Than During the Recession

Ok - so you know by now I'm not much for paying attention to economic data, at least when it comes to its impact on stocks. Sure, they correlate over extended periods of time, but that's much too long to be meaningful to investors in the here and now.

So that data's useless for handicapping the stock market, but it's the economy, after all; we're all economic observers and actors, we have businesses or jobs that depend on the broader performance of the economy, even if we don't own a single stock.

And data's always good for clueing us in when Wall Street tries to snow us. 

Finally, the data can tell us whether we should be worried about "The Big Picture," as in, "Will our grandchildren be able to do as well as we did here in the United States, or should we tell them to think about seeking their fortunes elsewhere?"

Today, it's retail sales data that tells the tale - and gives the lie to the bright, rosy picture we're being given of 2018's "Trump economy."

Turns out, if you've ever had the feeling economic growth and prosperity is passing you by, you're on to something - something big...

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