It’s the first Wednesday of the month … and that means a new Monthly Market Outlook with Mike and Chad!
Go ahead and click the video thumbnail below to see everything that was covered.
We reviewed their predictions from last month and had some fresh perspectives for you as well.
For instance, Mike Carr was right to be cautiously bullish at the start of last month. The double whammy of Afghanistan and a new, aggressive Covid strain sent markets reeling in the middle of the month … but they popped right back. In August, the S&P 500 rose 2.9% as of yesterday’s close, the biggest monthly gain since April.
But Mike’s call for this month is where you really want to pay attention… Check it out below…
Mike says we’re staring down the barrel of market conditions we’ve only seen twice in 100 years.
The last two times? 1929 … and 2000.
Notice a pattern? Of course you do. They’re two of the most damning dates in financial history.
Here’s the rundown…
We are witnessing a frightening divergence in the real economy and financial asset prices.
A new wave of Covid lockdowns, forced evictions, inflation and many other forces are beginning to soften the real economy.
Meanwhile, easy money is poised to send stocks and housing prices soaring into a blow-off top over the coming months.
We’re seeing it in the housing market already…
My house in Palm Beach is up close to 20% since I bought it in February.
On a 15% down payment basis, I’ve made a 120% return on my investment … in six months … in the housing market.
Terrifying? Also yes.
This kind of stuff isn’t supposed to happen…
When it does, many investors who haven’t studied history tend to get swept up in the mania and end up making stupid mistakes.
An economist I used to work with described it as the feeling of “going to financial heaven.”
It dupes the masses into thinking they’ve reached some sort of fiscal nirvana.
Fortunately, no one knows more about financial history than Mike Carr.
This is a period in the stock market you’re going to really want to lean in and pay close attention. Make the right moves, and you can make a quick fortune (I can attest to this).
Make the wrong ones and you can get burned.
Watch the outlook — it’s all there.
This is something we’re probably going to be hitting on a lot in the coming weeks.
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Chief Editor, True Options Masters
Chart of the Day:
Multi-Year Highs in Sight
By Mike Merson, Managing Editor, True Options Masters
(Click here to view larger image.)
Stocks and home prices aren’t the only places we’re seeing excess…
This year, the crypto market has been just as subject to the Federal Reserve’s easy-money policies.
But today, I want to highlight one outlier asset in particular. That’s Ethereum (ETH), and to do so, we’re going to look at the ETH/BTC chart.
This chart plots the price of ETH against bitcoin (BTC) as a ratio. If the chart’s going up, ETH is outperforming BTC. That’s been the case for much of 2021.
Note the blue downtrend line break back in late March. When that happened, ETH went on a 173% run against BTC until early May, when the whole crypto market tanked 50%.
And now, in just the past month, we’ve seen ETH break two major downtrend lines –– the pink and blue lines at the top right of the chart.
Let’s just say the ratio goes on a similar run this time. That would put ETH/BTC at a level of 0.12 — its highest level since the end of the 2017 bull market. If BTC stayed put from today’s levels, that would equal a price of roughly $5,200 per ETH.
But this ratio pair won’t go up in a straight line. What’s more likely, in my view, is for BTC to reach at least $100k in that time. That puts the price target for ETH once this run completes closer to $12k per ETH.
As of right now, there’s no way to play the ETH price with options in the equity markets. The Grayscale Ethereum Trust (OTCMKTS: ETHE) — the only pure play on ETH available — isn’t optionable.
But it is trading at a slight discount to its net asset value … making it an attractive method to gain equity exposure to this trend.
Managing Editor, True Options Masters