Stock Traders Daily, a proactive financial newsletter founded in 2000, at the height of the Internet Bubble, whose sole purpose is to offer strategies that are capable of making money regardless of where the Market goes, has officially turned bearish on the economy and stock market.
According to emails sent by Stock Traders Daily to subscribers, the market may have run its course, easing policies may have done all they are capable of doing, and although those policies have prevented economic catastrophe and depression they have not prevented the underlying weakness in our economy from coming. The underlying weakness in our economy is due to a mix of demographic and societal norms that cannot be prevented, according to the Investment Rate, the macroeconomic analysis used by Stock Traders Daily.
During the first half of 2013 Stock Traders Daily advised clients to sell all of their bond funds because buy and hold investors in those bond funds from levels seen in the first half of the year were likely to experience a significant reduction in wealth, that has indeed happened, and Stock Traders Daily is now warning buy and hold investors in the stock market that material declines are forthcoming there as well.
According to Stock Traders Daily a perfect storm is brewing, and investors who have lost significantly in bonds are moving to the stock market, but this has also fueled a valuation bubble that is more immediately tangible than the macroeconomic findings of the Investment Rate.
According to Stock Traders Daily the probabilities of significant market decline are greater now than at any other time in recent history, and the conditions today mimic that of 2007 in many ways. According to the Investment Rate, the stock market and economy entered into the third major down period in US History in December, 2007, and that is a long way from being over, buy the infusions of capital from the Federal Reserve have indeed staved off what could have been much worse.
In the process, according to Stock Traders Daily, they have also fabricated growth within the economy and they have created an asset bubble, not unlike Stagflation, and the Internet Bubble, which was at its peak when Stock Traders Daily was launched. By being proactive Stock Traders Daily has weathered the storms and its strategies have been able to make positive headway regardless of market direction, but according to Stock Traders Daily in order to be nimble and buy when the market capitulates, investors must first sell when the market is at a relative high. That time may be right now.
Stock Traders Daily has recommended that investors sell: ProShares Ultra Russell2000 (ETF) (NYSEARCA:UWM) , ProShares Ultra QQQ (NYSEARCA:QLD) , ProShares Ultra S&P500 (NYSEARCA:SSO) , and ProShares Ultra Dow30 (NYSEARCA:DDM). Downside opportunities also exist but those positions cannot be disclosed publically.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business relationship disclosure: By Thomas H. Kee Jr. for Stock Traders Daily and neither receive compensation from the publically traded companies mentioned herein for writing this article.