The Discount Newsletter

No Dips For You

The Discount Newsletter — Sun, 21 Jan 2024 23:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

The stock market, is once again, melting up-up-and away.

This time, unlike the previous two times we went long the SP500, Nasdaq and Russell 2000, she said…. “No Dips For You”.

Everyone, including us here at The Discount, were waiting patiently for a nice long entry before breaking all-time highs.

But now, it doesn’t look like we are going to pull back any time soon.

Let’s break down a series of charts to see where we are, where we’re likely going and what we can expect soon.

Stock Market Indices YTD:
Russell 2000 Index: -4.08% YTD
S&P 500 Index: +1.47% YTD
Dow Jones Industrial Average: +0.46% YTD
NASDAQ Composite: +2.00% YTD

If you remember from our last Discount Weekly, we laid out 3 scenarios where the SP500 could be headed before carving out a bottom or bouncing off support, and taking off to the upside for All-Time-Highs.

Our first scenario, was “The Shallow Fake-Out”.

Well…. so far… the market didn’t even get to our shallow pullback zone.

Buyers already got FOMO, piled in long and many are covering their shorts.

This goes to show… the markets will always humble you.

That’s why you need to respect them and play the cards you are dealt. NOT the cards you wish you were dealt.

As you can see in the chart above, we were waiting for a deeper pullback for our 3rd long in the SP500 (as well as Nasdaq).

We still are eyeing up call options and will notify everyone in our free telegram channel when/if we pull the trigger on those.

Where Are We Now?

Let’s start with the Weekly chart of the SPY (SP500)

Now let’s zoom in on the Daily chart.

As you can see, we closed strong above the all time highs on Friday.

Was this a fake out to the upside?

And will there be another leg down before resuming uptrend to our ultimate, measured-move, target close to 600 on the SPY and 6,000 on the SP500?

Well, no one knows for sure, and that’s why we use charts to tell us.

Right now, it’s safer to say that the market is extremely bullish and there will be people trying to short this thing into oblivion, proceeding to get stopped out and creating a buying frenzy in the process. This, plus FOMO buying could fuel a massive Melt-Up.

This “Melt-Up” has been our view ever since the market bottomed in October 2022.

Seasonally, we were “supposed” to see a deeper correction. And we are seeing that roll over somewhat in Crypto (which we will cover this next week).

We could still get a deeper pullback which if we buy the SP500 soon, we would be averaging into that pullback.

Where Are the “Catch-Up” Trades"?

Now that we have our bullish thesis, and the stock market indices are running away without us (for now), where is the “catch-up” trade?

In short, these are stocks where we should proceed to see a buying frenzy now that the broader markets are rallying.

First up is Shopify (SHOP)

It’s safe to say SHOP wants the big fat round number of 100… at least.

We are going to be watching this and the indices for pullbacks in our FREE Telegram Channel where we notify followers in real-time on trades and positions.

Shopify, zoomed out, has carved out a bottom and is retracing the bear market drawdown of 2022.

It would be very normal to see the 0.50 and 0.618 retraces hit on this run.

Next Up:

ARKK Innovation ETF

Similar to SHOP, we see that ARKK has been carving out a bottom here.

However it is struggling for now with the recent pullback in the indices.

It’s safe to say, that IF the markets are taking off as we think they will, that ARKK will catch a big bid soon, and reach the 65-73 area fairly quick.

Join us in our FREE Telegram Channel. We update our followers in real-time, with common sense analysis on the trades we are taking, currently in, and keeping our eye on. Common sense analysis that anyone, from beginner-to-advanced, can easily understand and take advantage of.

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See You Next Sunday!

We're Buying the Dip

The Discount Newsletter — Sun, 07 Jan 2024 23:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

The first week of 2024 is in the books!

And from the looks of it, we have a classic, “Post-Santa Rally” correction and/or relief pause, across the board for most stocks, indices and crypto.

This time it appears everyone wanted to harvest those tax losses for 2024, instead of 2023. I wonder why…

But we’re not buying that this is the grand finale, double top in markets and everything is going south from here for a long, long time... not yet at least.

No… we’re buying the dip.

“But when?” you ask…

Check out our website for daily news and trading services

If you’ve been here long enough you know we have a 100% FREE Telegram Channel. We post our investment / trade ideas in real-time. No strings, no catch. That’s it. You can follow along in there if you’re not already, for WHEN we are pulling the trigger on certain plays for this Q1 2024 correction.

In our weekly Sunday Special newsletters, as well as our telegram, we called out and were positioned for this past Santa Rally / melt-up in 2023 after the October correction.

Now, we’re on the watch for how shallow or deep this correction will be across stocks, indices and crypto.

For the purposes of this issue, we’re just going to focus on the indices, particularly the SP500. Of course we are watching the major stocks driving these indices, and playing those on the long side if/when the time comes… but we like to keep it simple for now.

S&P500

As you’ll notice, there were a TON of “gaps” created on the daily chart below, to the south side. And gaps on the indices typically like to get filled sooner than later.

Now here’s the trick… we’re not confident that those gaps get filled on this run. Why? There are so many people still shorting the pants off this market, climbing the wall of worry and in disbelief as we melt-up into the face of a technical recession.

The individual stocks underlying the S&P500, Nasdaq and even small caps in the Russell 2000, are showing serious strength and bullish posturing.

So, here are the THREE S&P500 / SPY scenarios we see potentially playing out in Q1:

Weekly Chart for reference (no drawings)

1.) SPY Scenario #1

The “Shallow Fake-Out” Correction
Approx. 5% drawdown
Bottom end of January to mid-February

2.) SPY Scenario #2

The “Normal” Correction
Approx. 8% drawdown
Bottom in March

3.) SPY Scenario #3

The “It’s Over” Correction
Approx. 13% drawdown
Bottom end of March

We’ll be watching all three scenarios to pull the trigger on longs in individual stocks showing relative strength as well as call options in the indices.

One chart in particular that we are watching, is ARKK Innovation ETF.

Right now, you can see the ARKK ETF is having a healthy pullback into a major potential bottoming / accumulation zone.

There are a ton of other individual names, and we’ll be posting in the free channel when the time comes.

Here’s one more you might have heard of:

NVDA

P.S. - If you are interested in LIVE Trading, Monday - Friday mornings 8am - 12pm EST, we have a LIVE Day Trading Room with over 50+ professionals, intermediates and beginners. Give it a test drive 7 Days for $7 here.

See You Next Sunday!

2023 Is In the Books...

The Discount Newsletter — Sun, 31 Dec 2023 23:01:42 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

2023 is in the books…

… and what a year it was.

The S&P 500 rallied 24% on the year, while the tech heavy Nasdaq gained a blistering 54%.

But it wasn’t just the big boys.

The Russell 2000, which tracks the performance of “small caps”, closed 2023 up 15%... following a slow start to the year.

Even “shitcos” joined the party. The ARK Innovation ETF (ARKK) - a fund that invests in growth stocks like Coinbase (COIN), Block (SQ) and Roku (ROKU) - spiked 67% this year… far outpacing the major indices.

Few saw this coming….

Heading into 2023, most investors were worried about inflation, rising interest rates, and a possible recession.

But none of these concerns could stop the bull market. Stocks shrugged off everything that was thrown their way… including a regional banking crisis scare in the spring.

Crypto also had a phenomenal year.

Bitcoin ended the year up 157%, while Ethereum gained 91% in 2023.

Many altcoins delivered even bigger gains. Solana (SOL) skyrocketed 950% on the year, while Injective (INJ) spiked more than 2,800%. And that’s just to name a couple.

These are unbelievable gains. But 2024 could offer even bigger opportunities to savvy investors.

We’ll explain why today. But we want to first welcome you to The Discount Weekly. Each week, we examine the biggest issues facing traders and investors… and explain what they mean for your wealth.

Check out our website for daily news and trading services

In this issue, we recap the incredible investing year that was 2023. We also gaze into our crystal ball to see what next year may have in store.

Let’s jump in…

Artificial Intelligence (AI) Took The World By Storm

Unless you’ve been living under a rock, you know that AI was the investing story 2023.

It’s why stocks like Nvidia (NVDA), Microsoft (MSFT), and Google (GOOG) performed as well as they did.

It also ignited a mesmerizing rally in semiconductor stocks… sending industry leaders like Nvidia (NVDA), Broadcom (AVGO), and Super Micro Computer (SMCI) into the stratosphere.

Of course, investors are no strangers to big, exciting narratives. Most of these trends come and go. Only a select few change the world.

In this case, AI appears to the latter. It has the potential to be one of the most revolutionary technologies in decades, if not of all time!

And that means serious opportunity…

According to Bloomberg, the AI industry could grow at a compound annual growth rate (CAGR) of 42% over the next decade. That’s many times faster than the economy as a whole is projected to grow.

So, don’t expect the excitement around AI to fade away anytime soon.

This is clearly great news for AI giants like Nvidia and Microsoft. It is also incredibly bullish for lesser known AI players like Datadog (DDOG), CrowdStrike (CRWD), and Palantir (PLTR).

It’s also a massive tailwind for AI crypto projects such as Fetch AI (FET), Render Network (RNDR), and Akash (AKT).

So, don’t listen to the naysayers. AI is the furthest thing from a bubble. It’s the real deal.

Of course, we’re not just bullish on AI as we look ahead to 2024…

Ethereum is Poised for a Major Rebound

We also think ETH could have a huge year in store.

Ethereum, as previously noted, gained 91% in 2023. That’s more than a respectable gain.

But ETH trailed bitcoin in 2023… which is not something that many would have expected.

To make matters worse, ETH massively underperformed rival Layer 1s Solana and Avalanche (AVAX).

The sentiment towards ETH is now in the gutter. Many longtime bulls have capitulated their positions.

That alone makes ETH an interesting contrarian bet. But that’s not the only reason we’re bullish on Ethereum heading into the new year.

Take a look at this chart. It shows the performance of ETH vs. BTC. When this line is rising, it means ETH is outperforming BTC.

We can see that this ratio stopped falling back in October… after hitting a key support level. This tells us that ETH has likely bottomed out relative to BTC… making now a good time to get involved.

Before we sign off, we want to leave you with one final piece of information…

Bull markets don’t go straight up.

The Nasdaq rallied 5% during the month of December.

Small caps have been even hotter The iShares Russell 2000 ETF (IWM) has surged more than 11% in December,

At this stage, stocks across the board are pretty extended.

So, don’t be surprised if the market pulls back before heading higher.

The US Dollar (DXY) is at MAJOR support right now…

Here’s how things could look on the SP500 if this plays out in Q1 2024:

We wouldn’t be surprised at all to see some profit taking early into the new year.

If that does happen, don’t be alarmed. After all, stocks don’t go straight up… even in bull markets.

Instead, treat pullbacks as an opportunity to load up on the highest quality names.

Don’t forget to follow us on YouTube for market updates as well.

See You Next Sunday!

The Fed Gives the GREEN Light

The Discount Newsletter — Sun, 17 Dec 2023 23:10:05 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

The Fed just gave stocks the “green light.”

On Wednesday, the Federal Reserve spoke to investors.

It shared minutes from its recent meeting, and it announced that it’s going to hold interest rates steady for the third time in a row.

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Not only that, the central bank signaled that it could cut interest rates three times next year.

Needless to say, this is a HUGE deal.

You see, the economy and stock market both love cheap money. That’s why stocks fell last year when interest rates were climbing.

Now, the Fed is signaling that it could start cutting rates again.

As you’d expect, stocks stormed higher on the news.

The S&P 500 closed the week up nearly 2%, while the Nasdaq rallied 3.4%.

Apple (AAPL) - the world’s largest stock - played a big part in this. It ended 1% and it had its highest weekly close ever.

It’s hard to be bearish technically, when the world’s most important stock is doing this well. But, once again, it wasn’t just the mega caps that performed well. Many stocks spiked on the news.

Last week, ten of the eleven major sectors closed higher. Real estate and industrials - the top performing sectors - gained an impressive 10.5% and 7.7%, respectively.

These are big gains. But they pale in comparison to what beaten-down growth stocks delivered.

Last week, Rocket Companies (RKT) surged 31%... Upstart (UPST) spiked 20%... And Carvana (CVNA) gained 28%!

This is a big deal. Not that long ago, these stocks were the laughing stock of the entire market.

Rocket plummeted 86% from its all-time highs, while Upstart and Carvana both plunged more than 97%

So, it’s encouraging to see these beaten names rallying again. It confirms that risk appetite is back in a big way.

Today, we’ll explain why we think the stock market could get even crazier soon.

But we want to first welcome you to The Discount Weekly. Each week, we examine the biggest issues facing traders and investors… and explain what they mean for your wealth.

Today’s issue is all about the raging stock market. Specifically, we’re going to show you how to make the most of this environment.

Let’s jump in…

The Worst Stocks Are Now The Top Performers

It’s no secret that mega cap tech stocks have done well this year.

For much of the year, all you had to do was buy The Magnificent 7 stocks like Apple, Microsoft (MSFT), and Nvidia (NVDA).

But that’s no longer the case. These days, the best performing stocks are growth stocks that got beaten to a pulp last year.

Last week, the ARK Innovation ETF (ARKK) gained 3.9%. It’s now soared 64% higher in 2023. It has far outpaced the Nasdaq, which is up 52% this year.

We think this trend continues. To understand why, let’s pull up a weekly chart of ARKK.

We can see that ARKK hasn’t even gotten going yet, unlike QQQ. It’s just starting to climb out of a bottoming pattern that it’s been building out for over a year.

That said, it appears “accumulation mode” is coming to an end. We say this because just last week ARKK had its highest weekly close since August 2022.

If this breakout continues, ARKK should see much, much higher prices in 2024. But that’s not the only reason we’re bullish on ARKK....

When we look inside ARKK, we see that many of its top holdings are setting up for big moves.

Consider Coinbase (COIN) - ARKK’s largest holding. This year, COIN has been on fire. It has rallied 318% in 2023, thanks to a strong rebound in the cryptocurrency market.

That’s a spectacular move. But we see even higher prices for COIN. Based on its chart, we wouldn’t be surprised to see COIN reach $200 within the next 3 to 6 months.

Tesla (TSLA) is another name to keep a close eye on. TSLA is the fourth largest holding in ARKK.

And like COIN, it looks primed for a major rally.

Several major ARKK holdings also look poised for explosive moves. But we don’t want to bore you with a bunch of repetitive charts.

What’s important to takeaway from this is that growth stocks are setting up for a monster 2024.

And we’ve taking full advantage of this opportunity at The Discount if you’ve been following us.

Don’t forget to follow us on YouTube for market updates as well.

P.S. - If you are interested in LIVE Trading, Monday - Friday mornings, we have a LIVE Day Trading Room with over 75+ professionals, intermediates and beginners. Give it a test drive 7 Days for $7 here.

See You Next Sunday!

Bears Can't Catch a Break

The Discount Newsletter — Sun, 10 Dec 2023 22:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

For the past year, naysayers have been warning about a big stock market crash.

They said stocks would tank because of high inflation… a supposedly weak economy… and steep interest rates.

But the market hasn’t just shrugged off these concerns. It’s ripped higher.

And if you’ve been following our calls, we’ve been “Macro Bearish but Technically Bullish”.

Why? Well… Just read the charts… as well as sentiment.

Everyone and their grandmother is talking to you about a recession. When the charts are bullish and the sentiment is max bearish after a significant correctional 2022, that means the probabilities favor a lot more upside to flip retail and CNBC TV talking heads onto the “the Fed achieved a soft landing” camp.

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So, where are we today?

Last week, both the S&P 500 and Nasdaq closed at new highs. The world’s important indices are now up 20% and 27% on the year, respectively.

There’s little reason to think this doesn’t continue. Just consider what some of the most important stock market groups are doing…

Last week, the Technology Select Sector SPDR ETF (XLK) closed at new highs. This is the most important sector in the entire market. It makes up 30% of the S&P 500, and 51% of the Nasdaq.

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The SPDR Homebuilders ETF (XHB) also ended the week at new all-time highs. That’s also a huge deal. Housing makes up about 15% of the U.S. economy.

If these stocks are doing well, it’s difficult to be bearish on the market at this time.

We’ll explain why in this issue we think things continue into a blow off top for 2024, as we’ve been suggesting for months.

But we want to first welcome you to The Discount Weekly. Each week, we examine the biggest issues facing traders and investors… and explain what they mean for your wealth.

Today, we’re going to once again explain why we’re bullish on stocks in the near and intermediate term.

Let’s jump right into things…

Keep an Eye on Semis…

For much of this year, semis have led the charge.

Nvidia (NVDA), the world’s largest semiconductor company, was the hottest stock for almost all of 2023.

It rallied more than 250% between January and August…vastly outperforming the major indices.

But NVDA has been quiet the past several months. That had some investors concerned that the market might be stalling out.

But NVDA is starting to wake up. Take a look…

As you can see, Nvidia closed last week up 1.6%. If this continues higher, NVDA will break out of a consolidation pattern that it’s been in since the summer.

That would be extremely bullish for the market at large.

You see, semis are “bellwether” stocks. They power everything from smart phones to automobiles. They’re the brains of the modern, “digital” economy.

In short, a breakout in semis would further confirm that we’re in a “risk on” environment for stocks. And there’s a very good chance that happens.

We say this because other semi stocks are already creeping higher. Take a look at Advanced Micro Devices (AMD).

Like Nvidia, AMD is a major player in artificial intelligence (AI). Last week, the company announced that it’s developing an AI chip that will compute Nvidia.

The market loved the news. AMD rallied 6.2% last week, and closed at its highest level since January 2022.

This is a major deal. We believe AMD is emerging as a new leader within the semi/AI field… and a huge potential winner going forward.

Of course, semis aren’t the only way to cash in on the AI revolution…

It’s Time to Take Big Data Stocks Seriously

Chip makers are one of the surest ways to profit off AI. They design and sell the hardware that makes this revolutionary technology possible.

But, to truly maximize AI’s immense potential, companies need to tap into big data. According to a recent report, the big data market could grow to nearly $400 billion by 2030. That translates to an annual growth rate of almost 14% per year, which is far faster than the broader economy is expected to grow.

Investors and traders can’t afford to ignore this opportunity.

Within this space, UiPath (PATH), Snowflake (SNOW) and DataDog (DOG), and Palantir (PLTR) are under-the-radar names to watch closely.

And unlike many high-flying semi names, these stocks haven’t gone on major runs yet. They could offer even more upside than the wildly popular AI stocks like Nvidia.

See You Next Sunday!

As Predicted, The Melt-Up Continues

The Discount Newsletter — Sun, 03 Dec 2023 23:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

The bull market marches on…

Last week, the S&P 500 climbed a respectable 0.8%... and had its highest weekly close since January 2022.

The Nasdaq also continued its hot streak.

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It ended higher for the fifth week in a row. It’s now also trading at its highest level since early 2022.

What’s even more impressive is that a handful of stocks are no longer carrying the market. Many stocks are climbing.

The Dow Jones Industrial Average led the charge last week. It closed the week up 2.4%. That’s more than 3 times what the S&P 500 returned.

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Today, we’ll explain why stocks should head even higher between now and the end of the year. But we want to first welcome you to The Discount Weekly. Every Sunday, we examine the biggest issues facing traders and investors… and explain what they mean for your wealth.

Today, our focus is once again the stock market… and why we see zero reason to be bearish in the near term.

Let’s get into it…

Forgotten Stocks Are Now Rallying

For much of this story, it’s been all about tech stocks.

The leaders were giant tech corporations like Microsoft (MSFT) and Nvidia (NVDA). That’s because these stocks are at the forefront of the artificial intelligence (AI) revolution.

And these stocks have continued to perform well lately. But the best opportunities have come from other stocks… particularly areas of the market that many investors are ignoring.

Take small caps…

This past week, the iShares Russell 2000 ETF (IWM), a fund that invests in small cap stocks, rallied an impressive 3.1%. It far outperformed all three of the major indices.

Few investors saw this coming. In fact, one of the biggest concerns was that IWM would roll over soon. But it’s done the exact opposite.

Last month, IWM spiked 9.20%. And it looks like December will be even more bullish for small caps.

On Friday, IWM kicked off the new month by soaring 2.9% on huge volume.

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A big reason for the rebound by the strength in regional banks.

You can see what we’re talking about below. It shows the performance of the SPDR S&P Regional Banking ETF (KRE), which invests in a basket of regional banking stocks.

On Friday, KRE jumped a whopping 5%. It ended the week up nearly 7%.

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This is a HUGE deal. Financials make up 14% of IWM. Also, it wasn’t long ago that many traders thought we were on the verge of a full-blown regional banking crisis.

Now, these hated stocks are leading the market. If that’s not bullish, we don’t know what is…

We’ve also seen a massive reversal in speculative growth stocks.

The chart below says it all. Here, we’re looking at the performance of the ARK Innovation ETF (ARKK). This is Cathie Wood’s flagship fund. It invests in a basket of growth stocks, including Coinbase (COIN), Roku (ROKU), and Tesla (TSLA).

Last year, ARKK was the laughingstock of the investing world after it fell 67% in 2022! Many folks thought it would keep falling, and that Cathie Wood would ultimately go out of business.

But ARKK has made fools of the bears. It stopped falling in January, and is now up 55% on the year. That’s more than what the Nasdaq has returned in 2023.

And it looks like it’s headed even higher. You see, ARKK hasn’t even broken out yet! It’s just starting to emerge out of a base that it’s been building since May of last year.

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At this stage, we believe it’s only a matter of time before ARKK breaks out of this base. If that happens, expect a strong rally in speculative growth stocks over the next six to twelve months.

But that’s not the only area of the market to be watching closely…

Gold Has Woken Up in a Major Way

Last week, gold quietly rallied 3.5%, and had its highest weekly close ever.

And like growth, gold appears to be just getting warmed up. To understand why, let’s look at the long-term chart of gold.

Regular Discount readers and FREE Telegram Channel followers will recognize this chart. We’ve shared it a few times over the past few months.

We can see that gold is just starting to emerge from a cup and handle pattern that it’s been building since 2011.

This is a MASSIVE bullish pattern. It suggests that gold is likely headed much higher in the coming years.

Don’t forget to follow us on YouTube for market updates as well.

See You Next Sunday!

Santa Rally or Correction?

The Discount Newsletter — Sun, 26 Nov 2023 23:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

Stocks didn’t get the holiday “memo.”

Last week was, of course, Thanksgiving week.

The stock market was closed on Thursday, and closed early on Friday.

And yet, the bulls still showed up last week.

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The S&P 500 gained 1% on the week, while The Nasdaq gained 0.9%.

It was the fourth consecutive green week for both major indices.

Despite the impressive rally, this is STILL an environment where you want to be buying stocks.

Today, we’ll explain why in this issue. But we want to first welcome you to The Discount Weekly. Each week, we examine the biggest issues facing traders and investors… and explain what they mean for your wealth.

This week is all about the stock market. Specifically, we’re going to examine why stocks are headed even higher.

Let’s jump right into things…

Check out our website for daily news and trading services

All Evidence Points to a “Risk On” Environment

The mainstream financial media is obsessed with the indices.

And we get it…

Many investors have the bulk of their wealth in funds like SPY and QQQ. Not only that, the indices are a great way to quickly assess the health of the stock market.

But they don’t tell the whole story…

To truly understand what’s going on, you have to look below the surface. So, let’s look at some of the most important areas of the market, starting with technology stocks.

Tech is the largest and most important sector in the entire market. It makes up 29% of the S&P 500, and 50% of the Nasdaq.

Earlier this year, tech stocks led the way… before cooling off for a few months. But, after taking a little breather, technology stocks are leading the charge again.

Last week, The Technology Sector SPDR ETF (XLK) climbed 0.9% on the week. It ended the week at its highest level ever.

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But it’s not just the mega-cap tech leaders that are performing. Many groups within the sector are strong.

Software, for example, is one of the strongest industries in the market!

Last week, The iShares Software ETF (IGV) gained an impressive 1.8% higher. Like the indices, it closed the week for the fourth time in a row.

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Communication stocks have also performed phenomenally.

See for yourself. Here we’re looking at the performance of the Communication Services Sector SPDR Fund (XLC), which invests in companies like Meta (META), Google (GOOG), and Netflix (NFLX).

Last week, XLC gained 1.3%. It was the fourth week in a row that it climbed higher. It’s now trading at the highest level since January 2022.

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Consumer discretionary stocks are another “risk on” area of the market that’s performed well lately.

Take a look at this chart. It shows the performance of the Consumer Discretionary SPDR ETF (XLY), which invests in companies that sell things people “want” rather than “need.” Its holdings include Amazon (AMZN), Tesla (TSLA), and Nike (NKE).

We can see that XLY has been on the move lately, rallying 13% over the past month.

And here’s the thing…

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And consumer discretionary stocks aren’t just performing well in an absolute sense. They’re also performing well on a relative basis.

XLY has been outperforming the Consumer Staples SPDR ETF (XLP) since December.

Simply put, this is not bearish.

If the market was heading for trouble, consumer discretionary stocks wouldn’t be outperforming consumer staples. They’ve be underperforming!

If you’ve been following our work lately, you know that one of our biggest concerns was poor market breadth.

Basically, a handful of stocks have been propping up the market for much of this year. That’s not a sign of a healthy market.

But market breadth is becoming less and less of an issue by the day. In other words, participation is also widening.

The Industrial Sector ETF (XLI) gained 0.7% on the week. This was an area of the market that had recently fallen out of favor. So, it’s encouraging to see industrials performing well again.

Small caps have also joined the party lately.

Take a look at this chart. It shows the performance of the iShares Russell 2000 ETF (IWM), a fund that invests in small cap stocks.

We can clearly see that IWM recently fell below its pre-Covid highs… before quickly changing direction.

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This is what’s known as a “false breakdown.” This type of price action often produces powerful moves in the opposite direction. In other words, we could see small caps headed even higher from here in the coming months.

In short, it’s becoming harder and harder to be bearish on stocks here. The bullish evidence simply keeps mounting up.

Having said that, the market has been on an absolute tear lately. So, don’t be surprised if the market pulls back a bit in the coming weeks.

Just understand that we’re now in a dip buying opportunity. So, be ready to take advantage of a correction if we get one soon.

Don’t forget to follow us on YouTube for market updates as well.

See You Next Sunday!

Do NOT Ignore Crypto's Resilience

The Discount Newsletter — Mon, 20 Nov 2023 01:50:26 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

The market is HOT again. And it’s not just stocks…

Crypto is also on fire.

Bitcoin is up an incredible % in 2023.

It’s massively outperformed both the S&P 500 and Nasdaq… and is easily the world’s best performing asset.

Many altcoins are performing even better.

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Solana (SOL) has surged % higher in 2023. Injective Protocol (INJ) has rallied %, and Render Network (RNDR) is up %.

And that’s just to name a few.

Of course, you’re probably more interested in where crypto’s headed next.

That’s what we’re going to look into today. As you’re about to see, we think crypto climbs much higher in the coming months.

But first we want to welcome you to The Discount Weekly. Each week, we look at the biggest issues facing traders and investors… and detail what they mean for your money.

Today’s issue is all about crypto.

Check out our website for daily news and trading services

Let’s kick things off by looking at King Bitcoin…

No Dips For You

It’s no secret that BTC recently reclaimed $30,000.

This was a key psychological level that many traders and investors were watching like hawks.

Since breaking out, BTC has kept marching higher. It’s now trading at just below $37,000.

After such an powerful rally, many traders were calling for a pullback. They thought bitcoin would retest that crucial level around $30k… giving sidelined investors the buying opportunity they’ve been waiting for.

But that hasn’t happened. And that’s mega bullish…

You see, the most bullish assets are very difficult to enter. They don’t dip like many expect. Instead, they force traders and investors to chase them.

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At this stage, we wouldn’t be surprised if bitcoin tags $40k before pulling back to $30k.

And we don’t just say that because of what we’re seeing on in the chart…

Bitcoin is Going Mainstream

As you’ve probably heard, many of Wall Streets biggest players have recently applied for Bitcoin ETFs.

These ETFs would make it much easier for everyday investors - think “boomers” - to own bitcoin.

It’s a huge deal.

Each day, we move closer and closer to these funds being approved by US regulators.

When that happens, it will open up the floodgates for bitcoin. Billions of dollars will enter the cryptocurrency market almost overnight.

The market knows this. And that’s a big reason why bitcoin has been performing so well lately.

But it sure isn’t the only factor working in Bitcoin’s favor…

Down Goes the Dollar

The U.S. Dollar is also weakening…

You can see this clearly in the chart. Here, we’re looking at the performance of the U.S. Dollar Index. This index tracks the dollar’s performance against major currencies, including the euro and Japanese Yen.

After ripping hard for months, the dollar has reversed course in a major way. It’s now trading at the lowest level since MONTH.

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The sharp reversal in the dollar has taken a ton of pressure off bitcoin.

But, once again, it’s not the only cryptocurrency performing exceptionally these days.

When is Alt Season?

Certain altcoins have been on fire lately.

Solana (SOL), for example, has surged 180% over the past two months. Thorchain (RUNE) has skyrocketed 182% over the same stretch, and Fetch AI (FET) has surged 123%.

After explosives moves like this, you’d expect the market to cool off.

But the strongest altcoins barely dipped.

The resiliency of alts is further proof of how strong this market is right now.

It’s yet another reason why we think crypto’s big major move is higher.

The million-dollar question is how to make the most of this opportunity.

You can’t go wrong owning blue chips like BTC, ETH, or SOL.

But there’s even more upside owning the best alts.

Here’s how you can find those…

Buy relative strength. In other words, look for altcoins that aren’t just appreciating in USD value. You want to own alts that are uptrends versus bitcoin.

This way you get paid for buying riskier alts.

Pay attention to the narratives. Crypto is all about the “next big thing.” Every cycle, new themes emerge that capture everyone’s attention… and produce the biggest winners.

Today, the hottest narratives include artificial intelligence (AI), gaming projects, and Solana ecosystem plays.

Focus on these areas of the market to make the most of these juicy market conditions.

Focus on newer coins. Old coins come with baggage. They have a lot of “bag holders”, or people who are looking to exit their positions near break even.

These bag holders make it more difficult for older coins to pump. Every strong rally is met with an army of sellers.

New coins don’t have this problem. They’re also viewed as “new, shiny objects”… meaning a lot of people are excited about their potential.

Of course, this doesn’t mean that all old coins should be avoided. Just make sure that old coins have superb chart setups and fundamentals if you’re going to get involved with them.

Don’t forget to follow us on YouTube for market updates as well.

See You Next Sunday!

We're Buying Uranium... Again

The Discount Newsletter — Sun, 12 Nov 2023 23:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

The bulls are back in town.

After a monster performance two weeks ago, the indices put on another impressive rally off the recent lows.

The S&P 500 rallied 1.4% higher this past week, while the Nasdaq gained an impressive 2.9%.

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And once again, it wasn’t just a few stocks…

Everything from Mega-Cap tech to growth stocks showed out. We’ve also seen some epic moves in crypto…

Bitcoin rallied above $37,000, and Ethereum reclaimed $2,000 for the first time in months.

Needless to say, we’re encouraged by these big moves. And we’ll have much more to say about the opportunities shaping up in stocks and crypto next week.

But today we’re going to focus on a corner of the market that most traders and investors ignore… and that’s URANIUM.

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Uranium, also known as “yellow cake,” is what powers nuclear power plants.

And yes. Nuclear energy is a contentious topic. Many believe it's the world’s solution to climate change, since it’s one of the world’s energy rich and greenest fuel sources. Others fear it because of nuclear meltdown and waste risks.

But there’s no debate about this…

Uranium has been on fire lately.

This year, the spot price of uranium has surged 56%. It’s now trading at the highest level since 2007.

For most people, it’s very difficult to directly bet on rising uranium prices. But we can do the next best thing, and that’s own uranium stocks.

The Global X Uranium ETF (URA) is a great way to do this. This holds a basket of different uranium stocks, making it a great way for everyday investors and traders to get exposure.

This year, URA has rallied 34%. That’s more than double the S&P 500’s return in 2023.

As impressive as that is, uranium stocks are likely just getting warmed up.

We’ll explain why in this issue. But we want to first welcome you to The Discount Weekly. Each week, we examine the biggest issues facing traders and investors… and explain what they mean for your wealth.

Today, we’re performing a deep dive on uranium stocks… and they could be one of the best trades of the decade.

Let’s jump right into things…

A Sleeping Giant Has Awoken

Not that long ago, people would laugh at you if you said you own uranium.

That’s because they were dogs!

URA plunged 95% between 2011 and 2020. The industry was an absolute disaster!

This happened for a couple reasons. For one, commodities as a whole were in a bear market. The Fukushima nuclear accident also took place in March 2011, which absolutely killed investor appetite for uranium stocks.

But like many commodity stocks, uranium stocks bottomed during the COVID market crash.

Since then, they’ve quietly emerged as some of the market’s best performing stocks.

Since March 2020, URA has spiked 287%. The Nasdaq 100 ETF (QQQ) is up about 130% over the same period, while the S&P 500 is up 102% over the same period.

Uranium stocks have massively outperformed their peers this year.

The Energy Sector SPDR Fund (XLE) is down 4.6% on the year, compared to URA’s 34% rally.

Other “green” energy stocks have performed even worse.

In fact, the Solar Energy ETF (TAN) has plunged 43% in 2023! Wind stocks aren’t faring much better as the Wind Energy ETF (FAN) is down 18%.

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It’s Early Innings for Uranium Stocks

At The Discount, we see uranium stocks will continue to be outperformers for years.

And we say this for a couple reasons…

Let’s start by looking at the monthly chart of URA.

After bottoming in early 2020, URA hasn’t just bounced back. It’s entered a new uptrend… one that’s still likely in the 3rd or 4th inning.

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In fact, everything about this chart suggests that uranium stocks may have just recently begun a multi-year bull market!

Of course, you might be wondering about the broad market at large. What if the major indices enter a bear market soon?

Well, here’s the thing about uranium stocks…

They often do their own thing. Remember, they fell between 2011 and 2020…during a time when both the S&P 500 and Nasdaq performed exceptionally.

The uranium market is also tiny compared to most industries. Because of this, it can zag when the broad market zigs.

The chart below also tells us that uranium stocks will outperform the market for years to come.

Here, we’re looking at the performance URA versus SPY. When this line was falling, it meant uranium stocks underperforming the S&P 500.

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We can see that this ratio also bottomed in March 2020. Since then, it’s been trending higher. It now appears ready to begin its next leg up.

In short, this chart indicates that uranium stocks should outperform the broad market not just in the months ahead but for years to come.

To profit off this long-term trend, consider picking up shares of URA. You could also consider speculating on leading individual uranium names such as Cameco (CCJ) or NextGen Energy (NXE). We update our followers in our FREE Telegram Channel on our specific trades for the short, mid and long term.

If you are interested in crypto exposure for Uranium, be sure to check out: http://uranium3o8.com … It is the FIRST token backed by physical uranium!

See You Next Sunday!

The Melt-Up Before the Recession

The Discount Newsletter — Sun, 05 Nov 2023 23:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

Markets can change direction on a dime.

Just two weeks ago, stocks looked awful.

The indices were getting slammed. Small caps were rolling over. And many individual stocks looked poised for major breakdowns.

We also have seen broad bearish sentiment out there, and rightfully so.

The global economy is showing dire signs of slowing down, which can and will have a significant and widespread impact on markets, retirements and individuals’ livelihoods.

But that aside… we are not here to be right.

We are here to make money.

Check out our website for daily news and trading services

The recent drawback in stocks has been downright ugly. In fact, there was little to be bullish about.

We even caught the short (and we are now long) near the top of the SP500 in our FREE Telegram Channel.

But, as always, the market fooled the majority…

That’s right. The market just pulled a complete 180.

Last week, The S&P 500 climbed nearly 6%, while the Nasdaq surged 6.5% higher.

Many big, important stocks performed even better.

Microsoft (MSFT), for one, spiked nearly 7% last week. More importantly, it had its highest weekly close ever.

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Nvidia (NVDA) also has a strong showing.

It rallied 11% higher on the week… just as most traders were getting bearish on the name.

This is a huge deal.

Microsoft and Nvidia aren’t just two of the world’s largest stocks. They’re also poster childs of artificial intelligence (AI), which has been the dominant bullish narrative this year

In short, it’s hard to be bearish on the broad market if they’re performing well and into major support from a technical standpoint.

And it wasn’t just the mega cap tech leaders that bounced back…

Many stocks participated in last week’s rally. In fact, all eleven major sectors in the S&P 500 closed the week higher.

Real estate, which has been a major underperforming lately, led the way. It gained nearly 9% on the week! It was one of seven sectors that climbed more than 5%.

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You can’t ignore this type of price action. It could represent a major change in character for the stock market. We’ll explain why in a minute.

But we want to first welcome you to The Discount Weekly. Each week, we look at the biggest issues facing traders and investors… and explain how they impact your portfolios.

Today, we’re going to examine the impressive snap-back rally in stocks… and explain why it could have legs.

Let’s dive right into things…

Stocks LOVE This Time of the Year

If you’ve been reading The Discount, you know we place a ton of importance on “seasonality.”

This is the notion that stocks follow predictable patterns around the calendar year.

Historically, September has been the worst month of the year for stocks. On average, the S&P 500 has fallen more than 1% during the month.

This year, stocks fared even worse. The S&P 500 fell 5.1% in September. Then, it fell 2.2% lower in October.

The good news is that we just entered the best time of the year for stocks. Historically, the S&P 500 has performed best from October through January.

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In other words, it would be perfectly normal for stocks to finish the year now that the worst seasonal period of the year is behind us.

But that’s not the only factor working in the market’s favor…

The Dollar Is Rolling Over

The dollar just reversed course in a big way.

Take a look at this chart. It shows the performance of the U.S. Dollar Index. This index measures the dollar’s performance against a basket of currencies, including the euro and the Japanese yen.

Last week, the Dollar Index fell 1.4%. That might not sound like much.

But this is a major move for the dollar. In fact, last week was the dollar index’ worst weekly performance since July.

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That’s an encouraging development.

As we’ve explained before, stocks don’t like it when the dollar is rising. It’s much more bullish when the dollar is trading sideways or falling… like it is now.

Buyers Are Coming Back Into the Bond Market

The bond market is also showing signs of life.

Take a look at this chart. It shows the performance of the iShares 20+ Year Treasury Bond ETF (TLT) since it was launched in 2002.

We can see that TLT has recently erased all of the gains since its inception. This coincided with the worst bond market selloff in history.

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TLT is now trading back at the same price it did more than 20 years ago.

This is also a major psychological level. You would expect buyers to step in here. And that’s starting to happen. Last week, TLT rallied alongside stocks… jumping 3.9%.

Here’s why this is important…

Bond prices trade inversely with interest rates. In other words, interest rates decline when bonds rally.

So, rates could be headed even lower if buyers continue to enter the bond market.

If that occurs, the stage could be set for a major stock market rally.

Don’t forget to follow us on YouTube for market updates as well.

See You Next Sunday!

The Stock Market Bottom is Near...

The Discount Newsletter — Sun, 29 Oct 2023 22:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

Stocks continue to get pummeled.

Last week, we explained how stocks were taking it on the chin.

Since then, it’s only gotten worse.

This past week, the S&P 500 fell 2.5%. That’s after falling 2.4% the week before.

The world’s most important index is now down more than 10% from its summer highs. It’s now trading at the lowest level since May.

Check out our website for daily news and trading services

The tech-heavy Nasdaq index isn’t faring any better. It’s dropped 11% from its July highs.

Naturally, this selloff has spooked a lot of investors.

But we must remember that the best buying opportunities occur when “there’s blood in the streets.”

So once again, we’re going to examine whether stocks are “screaming buy” here or if they’re headed even lower from here.

But we want to first welcome new readers to The Discount Weekly. Each week, we look at the biggest issues facing traders and investors… and explain how they impact your portfolios.

Today, we’re going to assess the damage that’s been done to the stock market. We’re also going to say a few words on gold, which has held up well as of late.

Let’s start by sifting through the rumble….

The Leaders are Falling

Last Sunday, we explained how the “The Magnificent Seven” were holding up the entire stock market.

Once again, this term refers to Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), Nvidia (NVDA), Tesla (TSLA), and Meta Platforms (META).

For much of 2023, these stocks have carried the market.

Not only that, they’ve masked weakness below the surface. You see, your average stock has struggled this year.

We can see this many ways…

For one, the Invesco S&P 500 Equal Weight ETF (RSP) is down 5% on the year. Unlike the S&P 500, RSP gives equal weight to every stock in the S&P 500… giving us better idea of how most stocks are performing.

The S&P 500, for comparison, is still up 7% on the year, even after the recent selloff. This is possible because mega cap tech stocks have an outsized impact on the performance of the S&P 500.

It Get’s Worse…

And that’s hardly the market’s only issue.

Just four out of the eleven sectors that make up the S&P 500 are green on the year. Real estate and utilities - the two worst performing sectors - both down more than 10% in 2023!

This is not what to see if you’re a stock market bull.

During healthy bull markets, many stocks across different industries perform well… rather than just a handful of giant stocks.

Unfortunately, the mega cap tech leaders are no longer being spared…

Take a look at this chart. It shows the performance of the NYSE Fang Plus Index. This index tracks the performance of ten large and mega-cap tech stocks, including Apple, Microsoft, Amazon.

This index fell 2.4% last week, which was the second week in a row that it’s closed in the red.

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This is a major problem for several reasons.

Apple and Microsoft make up 46% of the technology sector, which is the most important sector for both the S&P 500 and Nasdaq. Meanwhile, Google and Meta account for 46% of the communications sector.

In other words, the year’s top performing sectors could soon be in real trouble.

If that happens, the stock market could be in major trouble.

The Silver Lining

The “silver lining here” is that the generals are usually the last stocks to get taken out.

In other words, the market could be closer to a bottom than most traders and investors realize. Of course, we want to see signs of a bottom forming before getting aggressively long stocks again. And we just don’t have those yet.

We’ll be actively discussing and notifying member in our FREE Telegram Channel when and if we are going long on the SP500.

This chart below shows the area we are watching on the SPY (ETF proxy for the SP500)…

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Having said that, alternative assets like gold and bitcoin present interesting opportunities. Both have held up remarkably well as of late… and could be headed even higher from here.

To understand why, let’s take a look at gold’s long-term chart. We can see that it looks incredibly constructive on its monthly chart.

In fact, gold appears to be building out a massive cup and handle pattern. A confirmed breakout of this pattern would signal much, much higher prices for the yellow metal.

So, consider picking up some gold for the long haul.

It could act as a highly profitable hedge for the near and long term, should stocks remain under pressure.

P.S. - If you are interested in LIVE Trading, Monday - Friday mornings, we have a LIVE Day Trading Room with over 50+ professionals, intermediates and beginners. Give it a test drive 7 Days for $7 here.

See You Next Sunday!

Crash Mode Activated?

The Discount Newsletter — Sun, 22 Oct 2023 22:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

The stock market is starting to unravel…

Last week, the S&P 500 closed the week down 2.4%. The tech-heavy Nasdaq dropped 2.9%.

And it’s even worse below the surface.

On Friday all eleven sectors closed the day red. And just two sectors closed the week higher, as consumer defensive and energy stocks eked out small gains.

Now, it shouldn’t be a complete surprise that stocks are struggling.

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As we’ve explained in past issues, stocks are dealing with some serious headwinds currently.

For starters, interest rates keep marching higher. Last week, the yield on the U.S. 10-Year Treasury hit the highest level since 2007!

The U.S. Dollar Index also remains incredibly strong. And the conflict in the Middle East appears to be intensifying.

Of course, fear often precedes opportunity.

So… is a major buying opportunity setting up in stocks? Or will the market continue to struggle?

That’s what we’re going to examine here today.

But we want to first welcome you to The Discount Weekly. Each week, we dive head first into the biggest issues facing traders and investors… and explain how they impact your portfolios.

Today, our focus is once again stocks, specifically our concerns about the market.

Let’s jump right into it…

Even the Generals Are Getting Shot

If you’ve been following the market lately, you’ve probably heard about “The Magnificent Seven.”

This relatively new term refers to Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), Nvidia (NVDA), Tesla (TSLA), and Meta Platforms (META).

These stocks have carried the market this year. In fact, they account for 98% of the market’s gains in 2023.

Needless to say, this is NOT a sign of a healthy market.

During a healthy bull market, many stocks are doing well. There’s more participation.

The good news is these stocks have done phenomenally this year. Nvidia, for one, is still up 183% on the year, while Meta is up 156% on the year.

The incredible strength of these huge stocks has masked a lot of the market’s issues.

Our concern is that these tech leaders, or what many call the “generals,” could get taken out next.

Take a look at this chart below…

It shows the performance of the NYSE Fang Plus Index. This index tracks the performance of ten large and mega-cap tech stocks, including Apple, Microsoft, Amazon.

We use this index to quickly gauge how the world’s most important stocks are performing.

Below, we can see that this important index may have recently put in a “double top” patterns. This means that the index failed to reclaim its late 2021 highs.

That alone is concerning.

But the NYSE Fang Plus Index is also starting to lose momentum. Since the summer, it’s put in a series of lower highs. And it’s been unable to reclaim its 10-week (50-day) moving average.

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In short, mega cap tech stocks are starting to look toppy.

If they break down from here, that will put tremendous pressure on the indices. And there’s a good chance that happens.

To understand why we say this, let’s look at a few individual charts. First up is Nvidia.

After leading the market for most of 2023, Nvidia has stalled out in a big way.

It now appears to be putting in a “head and shoulders” topping pattern. If NVDA breaks down from here, it could easily “fill the gap” that dates back to May.

That’s 23% lower than current prices! So, we’re talking about a ton of potential downside.

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This is a big deal even if you don’t own shares of Nvidia.

Remember, Nvidia was the stock to own for much of 2023. Because of this, its performance can tell us a ton about investor sentiment.

Tesla - another popular barometer of risk appetite- is faring even worse. You can see what we mean below.

Last week, Tesla broke down in a big way… falling 16% after sharing poor quarterly results.

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If these stocks don’t turn around soon, the entire stock market could be in major trouble.

Market Breadth Continues to Deteriorate

It’s not the big stocks that are flashing danger.

Small cap stocks are also struggling in a big way.

You can clearly see this below. This chart shows the performance of the Russell 2000 ETF (IWM).

IWM has massively underperformed both the S&P 500 and Nasdaq this year. It’s now pressing against a key support that dates back to 2020… just before the Covid market crash.

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If this level breaks, small caps could be in serious trouble. Unfortunately for the bulls, there’s a good chance that IWM rolls over from here.

To understand why, take a look at this chart of the iShares Microcap ETF (IWC), which invests in “microcap” stocks.

Here, we can see that IWC has already taken out its pre-COVID highs.

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That makes sense. Microcaps are the smallest stocks in the entire market. They’re even riskier than small caps. So, it would be perfectly normal for them to “lead” the market lower.

In closing, stocks are looking more vulnerable by the day. So, exercise caution if you’re looking for long opportunities.

You might even want to consider dollar cost averaging into some hard assets like gold or bitcoin… which are both holding up much better in the current environment.

Don’t forget to follow us on YouTube for market updates as well.

See You Next Sunday!

We're Buying Bonds & Gold

The Discount Newsletter — Sun, 15 Oct 2023 22:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

The war drums are beating…

And the investing implications couldn’t be bigger.

As we all know, a major conflict has broken out in the Middle East.

And no one knows how this will all shake out.

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Unfortunately, all signs point to things getting worse before they get better.

This isn’t a situation that investors or traders can afford to ignore.

If this conflict escalates, expect volatility to come back in a big way. You may even want to start preparing for a full-blown market crash.

In short, this isn’t the time to be complacent. The good news is that there are simple ways to shield your wealth.

We’ll share two of our favorite strategies in a second.

But we want to first welcome you to The Discount Weekly. Each week, we dive head first into the biggest issues facing traders and investors… and explain how they impact your portfolios.

Lately, our focus has been the stock market. But we’re going to turn our attention to bonds and gold today.

Throughout history, bonds and gold have been considered “safe haven” assets. They’ve performed well during times of widespread turmoil…

And that makes them interesting bets during today’s uncertain times.

So, let’s take a closer look at what these two important markets are saying right now, starting with bonds…

Bonds Have Been Taking a Historic Beating

If you’ve been paying attention to markets lately, you know interest rates have been soaring.

Consider the U.S. 10-Year Treasury yield. It’s nearly tripled over the past two years, breaking out to its highest level in a year a few weeks ago.

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This is a huge deal.

Interest rates are the price of money. When they increase, everything from buying a house to financing a new business gets more expensive.

That’s why so many strategists are worried about the pace of rising interest rates after not only a historically low interest rate period in 2020-2021, but a historically low interest rate period that lasted several DECADES since the 1980’s.

Neither the U.S. economy nor the global economy are built for this environment.

Bonds are also the world’s biggest asset class.

The global bond market is estimated to be worth around $133 trillion! It’s far bigger than the global stock market, and orders of magnitude bigger than the crypto market.

In other words, the entire global economy could be in serious trouble if the bond market continues to crack.

That said, bonds may be approaching a major bottom.

To understand why, take a look at this chart. It shows the performance of the iShares 20+ Year Treasury Bond ETF (TLT) since it was launched in 2002.

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The TLT ETF invests in long-term Treasuries. Many investors use it as a benchmark to assess how bonds as a whole are performing.

Below, we can see that TLT has been under immense pressure lately. It has fallen more than 53% since March 2020.

This is a truly historic selloff. By many accounts, this is the worst rout for Treasuries ever!

The “good news” is that bonds are likely close to a bottom. We say this because TLT has pulled back into a key level of support.

In short, we see more opportunity in bonds, than risk. At some point in the near future, bonds could reverse course as investors run for shelter.

If that happens, bonds could be an excellent hedge for your portfolio. But it’s simply too early to make any sort of bottom call. However, we’ll be sure to let you know when that buying opportunity presents itself.

To see exactly how we’re playing this opportunity in TLT, be sure to join us in our FREE Telegram channel here today.

Time for Gold to Shine Again?

We’re also closely monitoring gold.

Last week, gold woke up in a big way.

On Friday, the SPDR Gold Shares ETF (GLD), which tracks the price of gold, jumped 3.2% on its heaviest volume in months.

It closed the week up 5.4%, and is now trading back above its 50-day moving.

It’s far too early to tell if this is the beginning of a much larger move for gold, but we certainly wouldn’t be surprised if that transpires.

As we’ve explained before, gold is one of the world’s most trusted safe haven assets.

For many centuries, investors have taken shelter in gold when they’re nervous about the economy… financial system… and even their own paper currencies.

And there’s a lot of fear in the air right now.

We also like what we’re seeing in gold when we “zoom out.” You can see what we mean below. Here we’re looking at a monthly chart of gold.

We can see that it’s been building out a massive cup and handle formation. It’s likely only a matter of time before this pattern breaks out to the upside.

Global uncertainty isn’t the only major tailwind working in gold’s favor currently.

The U.S. government also continues to spend money like it’s going out style.

Check out this chart. It shows the explosive increase in the national debt over the past century or so.

It’s gone parabolic. This, of course, happened because the U.S. government has gone on a drunken spending binge.

Sadly, this trend is only going to accelerate.

Take a look at this chart. This one includes projections from the Congressional Budget Office (CBO).

We can see that the total U.S. public debt outstanding is projected to rise from about $35 more than $50 trillion by 2033.

This explosive surge in U.S. debt is highly inflationary. During environments like this, you want to own hard assets like gold.

So, it shouldn’t come as a surprise that gold’s been outperforming Treasuries in recent years.

In fact, GLD recently broke out of a massive long-term base versus TLT. This kind of move suggests that gold will continue to outperform Treasuries for years to come.

That’s part of the reason why we like gold even more than Treasuries going forward.

Of course, it’s far too early to go “all-in” on gold. But we like what we’re seeing, and believe the current conditions make right now a perfect time to start accumulating long-term gold positions.

See You Next Sunday!

Markets Could Break All-Time Highs

The Discount Newsletter — Mon, 09 Oct 2023 00:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

Stocks may have just bottomed…

If so, stocks could rip hard in the coming weeks… and take many investors by complete surprise.

We know this because fear has STILL running rampant.

Check out our website for daily news and trading services

The graphic below says it all. You’re looking at the CNN Fear Index, one of today’s most popular sentiment indicators.

As we explained last week, high reading indicates euphoria. A low reading tells us investors are scared.

Last Sunday, the index showed a reading of 28.

During the week, this indicator slid into “extreme fear” territory… before ending the week at 29.

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This means investors are still quite nervous… even though stocks closed the week very strongly.

On Friday S&P 500 jumped 1.2%, erasing damage from earlier in the week.

The world’s most important index closed the week up 0.5%, knocking its first green weekly close in a month.

The tech-heavy Nasdaq 100 fared even better. It gained 1.8% on the week, good for its second consecutive positive weekly gain.

These aren’t monster movers by any stretch of the imagination. But it’s a start…

In fact, the market could be setting up for a strong rally.

We’ll explain why we’re bullish on stocks in the near term in a minute. But we first want to welcome you to The Discount Weekly. Each week, we examine the biggest issues facing traders and investors… and explain how they impact your portfolios.

This week’s focus is once again the stock market… specifically why stocks could be setting up for a powerful bounce.

Let’s start by looking at some charts…

First up is the S&P 500.

Notice how it reclaimed its August 2022 highs last week. That’s a big deal.

As we’ve explained before, those summer ‘22 highs are a major “line in the sand.” So, it was encouraging to see bulls defend this level the past two weeks.

And that’s not the only positive takeaway from this chart.

The S&P 500 is also back above its rising 40-week moving, as well as its 200-day moving average. This tells us that the longer term uptrend for stocks is still intact.

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The Nasdaq 100 ETF (QQQ) weekly chart is even more constructive.

Not only did Nasdaq get their second consecutive weekly green candle, it also appears to be painting a “bull flag” pattern.

This consolidation pattern forms during uptrends. If successful, they break out to the upside… kicking off the next leg up.

In other words, the QQQs could be setting up for a big move higher.

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Having that, we’re still waiting on confirmation. But we could get that “buy signal” soon…

We say that because the market’s most important stocks are acting well.

You can see what we mean below. This chart shows the performance of the Technology Sector ETF (XLK), which invests in large technology stocks like Apple (AAPL) and Microsoft (MSFT).

Last week, XLK rallied 2.6%... making tech the second strongest sector in the market after communication stocks.

More importantly, XLK now appears to be painting a bull flag… just like the QQQs.

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If tech stocks break out to the upside, it’s going to be hard to be bearish on stocks.

After all, tech makes up 28% of the S&P 500 and 49% of the Nasdaq.

At the same time, semiconductors are holding up quite well. See for yourself…

Like the QQQs and XLK, the Semiconductor ETF (SMH) appears to be printing a bull flag here. An upside breakout in semis - one the most important “bellwether” industry groups - would be a huge win for the bulls.

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In summary, the market is looking the best it has looked in weeks. But that doesn’t mean you should dive head first into the markets.

Interest rates are still surging… and a major military conflict has broken out in the Middle East.

In other words, it wouldn’t surprise us if the market changed on a dime in the coming weeks.

Don’t forget to follow us on YouTube for market updates as well.

See You Next Sunday!

Is the Worst Behind Us?

The Discount Newsletter — Sun, 01 Oct 2023 22:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

Is the worst behind us?

Many investors are wondering this, and for good reason…

After all, stocks have been under major pressure lately.

The S&P 500 has fallen 8% since July, while the Nasdaq 100 has slid more than 9%.

Check out our website for daily news and trading services

The good news is that the bulls are showing up again.

Last week, the Nasdaq 100 closed up 0.1%. It was its first positive weekly close for the first time since late August.

The S&P 500 ended the week slightly down. But it closed Friday above its lows, and it managed to close above a key weekly level that dates back to August 22.

Many important sector and industry groups also rebounded last week.

The Consumer Discretionary ETF (XLY), which invests in stocks like Amazon (AMZN), Tesla (TSLA), and McDonald’s (MCD) ended the week up about 0.03%.

Semiconductors - one of the most important “bellwether” industry groups we track at The Discount, also performed well. The Semiconductor ETF (SMH) rallied 2% last week, good for its best performance since August.

Software stocks - another important group - also ended the week on a good note, as The Software Sector ETF (IGV) gained 0.2% on the week.

These obviously aren’t huge numbers. But it’s always encouraging when “risk on” groups like consumer discretionary and semis outperform the broader market.

In fact, the price action action that we saw last week could be setting the stage for a strong end-of-the-year rally.

We’ll explain why in a minute. But before we do that, we want to welcome you to The Discount Weekly. Each week, we examine the biggest issues facing traders and investors… and explain how they impact your portfolios.

Today’s issue is once again about the stock market… specifically why a strong year-end rally could be setting up. Let us explain…

The Market Is Entering one of the Strongest Periods of the Year

If you’ve been reading The Discount, you know we’re big believers in “seasonality”, or the idea that the stocks follow predictable patterns around the calendar year.

And last month was the worst month of the year for stocks. Historically, stocks have more than 1% on average during the month of September.

But it’s now October. And that means that stocks have just entered one of the strongest periods of the year.

Historically, the stock market has performed very well between October and January.

Of course, seasonality is just one piece of the puzzle. But there are other factors that suggest the stock market may be close to putting in some sort of bottom.

Sentiment has Been Reset in a Major Way

The stock market is an emotional rollercoaster.

It swings based on how fearful and greedy investors are feeling.

And after the market’s red-hot start to the year, many investors were starting to feel euphoric. Many became convinced that artificial intelligence (AI) would save stocks from high inflation, rising interest rates, and a possible recession.

The problem is that it’s hard to make money in stocks when everyone is bullish. That’s one of the reasons why the stock market stalled out over the summer.

Thankfully, investor sentiment has been reset in a major way. The graphic below says it all. Here, we’re looking at the CNN Fear Index. .

A high reading on this index indicates euphoria. A low reading occurs when the majority of investors are scared.

We can see that we’re now deep into fear territory. We’re actually bordering on Extreme Fear levels.

This is a pretty big deal.

Back in July, this indicator was much higher, signaling rampant greed.

In other words, the recent pullback in stocks has reset investor sentiment. It has wiped out a lot of the excess that we were seeing when leading AI stocks like Microsoft (MSFT) and Nvidia (NVDA) were hitting new all-time highs.

Having said all this, we’re not going to “all in” on stocks just because seasonality and sentiment have become more favorable.

As traders, we still need to see price action turn more favorable, and that just hasn’t happened yet.

It’s Too Early to Call a Bottom

The stock market is still a mess.

Remember, the S&P 500 didn’t close last week in the green. It just rallied off the lows.

The Technology Sector ETF (XLK), which is the biggest and most important sector, also ended last week down.

In short, it’s far too early to call any sort of bottom in stocks. We simply need to see more.

This is why we think the next couple weeks will be critical for the market. If the bulls show up, we could get that power end-of-the-year rally in stocks. If they don’t, expect market conditions to remain difficult.

To see how we’re playing these market conditions, be sure to join our free telegram channel

We also realize that messy market conditions like this can be frustrating. If you’re not careful, you can get really hurt trade this.

But there are ways to prevent this. Here are a few simple things anyone can do to survive the current market conditions.

Don’t Let Boredom Destroy Your Account

Don’t let many traders get bored in market conditions.

They get impatient and feel like they need to “do something.” And that can lead to disaster.

Forcing trades during poor market conditions can cause you to catch falling knives, or stocks that are still in strong downtrends.

You can also get chopped to pieces by taking small losses over and over again on poor setups.

To avoid these issues, wait for the market to start trending higher again before jumping back in. This approach will make your trading less stressful and more profitable.

Don’t Give into FOMO (Fear of Missing Out)

Social media is an endless source of FOMO.

Every day, traders are bragging out big wins they captured.

If you’re sitting on the sidelines, this can drive your nuts. It can lead you to chase green candles when you really should be waiting for the right “fat pitch” to come across your plate.

The best way to avoid succumbing to FOMO is to exercise discipline. In other words, develop a plan and stick to it.

It sounds so simple, but it works. Take it from experienced traders.

So, don’t get too upset if a stock makes a big move without you. There’s always another opportunity to take advantage of.

We also recommended tuning out most social media posts where other traders are bragging about huge gains. Instead, stick to your own system.

It’s also important to understand that different traders have different styles. And very few styles don’t work all the time. There’s a time and place for everything

Consider swing trading. This is a popular approach where you a stock and hold it for a few weeks or months. It’s a great way to make money, but it usually only works when the broader market is also climbing.

Don’t forget to follow us on YouTube for market updates as well.

Automated Journaling via Coin Market Manager

See You Next Sunday!

The Stock Market is Cracking...

The Discount Newsletter — Sun, 24 Sep 2023 22:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

The stock market is starting to crack…

Last week, the S&P 500 fell 2.9%, while the Nasdaq 100 slid 3.5%.

The major indices are now 6% and 7%,, respectively, since topping out in late July.

This alone isn’t reason to panic. After all, pullbacks are perfectly normal… especially since the stock market got off to such a hot start in 2023.

Check out our website for daily news and trading services

But the indices also don’t tell the whole story. And the stock market looks even weaker upon close inspection.

The chart below says it all. Here, we’re looking at how the eleven different sectors in the S&P 500 performed last week.

They all ended the week deep in the red. Even defensive sectors got slammed as consumer staples, healthcare, and utilities stocks closed the week down 1.7%, 2%, and 2.1%, respectively.

In other words, there’s been nowhere for investors to hide!

Today, we’re going to explain what this means for the stock market.

But before we do that, we want to welcome you to The Discount Weekly. Each week, we examine the biggest issues facing traders and investors… and explain how they impact your portfolios.

This week’s issue is all about stocks… and why it’s currently under so much pressure.

One of the biggest headwinds facing the market currently is “seasonality.” This is the idea that the stocks follow predictable patterns around the calendar year.

If you’ve been keeping up with us at The Discount, you know why this is important…

Last month, we explained how the stock market was about to enter the worst month of the year for stocks.

Since 1928, September has been the weakest month of the year for stocks. On average, stocks have fallen about 1% during the month of September. No other month even comes close.

This is why we told Discount readers last month to brace for a bumpy road ahead. And that’s exactly what happened.

Unfortunately, seasonality isn’t the only major headwind facing the stock market today.

Interest rates are also surging.

See for yourself. This chart shows the yield on the U.S. 10-Year Treasury. We can see that it just broke out to the upside after trading sideways for the past year.

“Breakouts” like this often signify the beginning of a new uptrend.

In this case, we wouldn’t be surprised if visits 5% or even slightly higher in the months ahead.

A major breakout like that would have MAJOR ramifications for both the stock market and the economy.

Remember, interest rates are the cost of money. When they rise, everything from buying a house to a new car gets more expensive. It also becomes more expensive for businesses to borrow money.

To complicate matters, the recent spike in interest rates lately could be the start of a much, much bigger move.

Take a look at this chart. It shows the performance of the 10-Year Treasury yield, only this time the data goes all the way back to the 1980s.

We can see that interest rates steadily fell for nearly four decades. This is because bonds were in a “secular bull market”

And because bond prices and interest rates are inversely correlated, rates fell during this period. It’s how zero interest-rate policies and negative interest-rate policies came to be.

Unfortunately, the days of easy money appear to be over. As you can see below, the U.S. 10-Year Treasury Yield recently broke its four-decade downtrend… potentially signaling the beginning of a long-term bond bear market.

Now, we know this is a lot to digest. But the main insight you should take from this is that we could be entering a period where interest rates rise significantly over the long-term.

It’s important to maintain a long-term perspective.

But we’re also interested in taking advantage of short and medium-term trading opportunities. So, it’s important to trade the charts in front of you.

In this case, we can see that the S&P 500 has already pulled back sharply. It’s now testing its late 2022 summer highs.

This is an area where buyers could potentially step in and produce a short-term bounce opportunity.

“But When and Where Exactly?”

Don’t forget to follow us on YouTube for market updates as well.

Automated Journaling via Coin Market Manager

See You Next Sunday!

This Will Be Our 2008 Collapse: Part 2

The Discount Newsletter — Sun, 17 Sep 2023 22:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

It’s going to get worse.

… much worse.

Two weeks ago, billionaire investor Jeff Greene warned that a wave of defaults could soon slam the commercial estate market…

And real estate investors will have nowhere to hide.

Check out our website for daily news and trading services

According to Green, commercial office space isn’t the only corner of the market staring down the barrel of a loaded gun. “Every aspect of real estate is going to get whacked.”

Everything from retail to the apartment segment is in trouble… and that’s not likely to change anytime soon.

According to Green, we’re still only in the “first inning” of this crisis.

Greene isn’t someone you can afford to ignore. He became a billionaire by buying credit default swaps during the last housing bubble. In other words, he saw the last major crisis long before most investors.

Of course, Greene’s warning shouldn’t surprise regular Discount readers.

On July 23, we explained how the commercial real estate (CRE) was barreling towards a major crisis.

If you missed that issue, here’s a quick recap…

In short, CRE is one massive powder keg.

Today, there’s 1 billion square feet of empty office space in the United States. If you stacked all that empty space in a single office tower, the building would stand 48,000 stories tall!

That’s a big problem.

This year, $175 billion in office debt is set to mature, while another $150 billion in debt will mature.

By the end of 2024, $1.4 trillion worth of commercial real estate debt needs to be refinanced.

One of the biggest issues facing CRE today is the rise of remote work.

Thanks to technological advances like video conferencing, employees no longer go into the office. They can work from home.

In the U.S., about one-quarter of all employees work from home.

Because of this, companies require far less office space than they used to.

That’s sent office vacancy levels to historic levels.

According to Green, the straw that could break the camel’s back is commercial real estate.

The U.S. Consumer is on their Last Legs

Last month, U.S. employers cut 75,000 jobs. That’s the most job cuts in three months. It’s also a 267% spike from the same month a year ago.

Large spikes in job cuts often occur just before a recession sets in.

We saw that play out in the early 2000s after the dot-com bubble popped… and again during the early stages of the 2008 global financial crisis.

The American consumer has also been burning through its savings at a rapid clip.

The chart below says it all. Here, we can see that median household savings levels have dropped considerably - across income levels - since 2021.

This is happening because there was a massive increase in spending during the pandemic.

Of course, the government is no longer mailing out “stimulus” checks to everyday Americans. To make ends meet, many people are dipping into their savings.

You don’t have to be an economist to see that this isn’t sustainable.

Unless this trend reverses soon, the economy could run into major problems… hhc create more issues for the increasingly distressed CRE market.

Commercial Real Estate is Starting to Crack

In April, Brookfield – one of America’s largest office space owners – defaulted on a $161 million loan.

Then in July, Starwood defaulted on a $213 million commercial loan for an office building in Atlanta… after the city’s vacancy rate hit 22%.

More recently, the Vella Group defaulted on a $79.1 million loan tied to four industrial and office properties in Los Angeles.

And that’s just one segment of the CRE market!

Another $22.7 billion worth of retail properties are also under distress, as well as $13.5 billion of hotels.

The “Smart Money” Sees the Writing on the Wall

Last month, Bloomberg reported that JPMorgan, Goldman Sachs, Capital One, and M&T Bank are among key huge firms looking to offload their CRE holdings.

JPMorgan, for one, is looking to sell a $350 million loan backed by the HSBC Tower in Manhattan, while Capital One is trying to reduce its exposure to the troubled New York office market.

There’s just one problem…

No one wants to buy what they’re selling!

Still, investors should get used to headlines like this.

Roughly $1.5 trillion in CRE debt needs to be refinanced over the next three years.

To make matters worse, interest rates keep climbing…

Below, we can see that the yield on the U.S. 10-Year Treasury Yield has spiked over the past several months… rallying from 3.3% in April to 4.2% today.

If the 10-Year yield breaks above 4.3%, it could easily rally 5% next.

That would exacerbate problems for the economy and CRE, which are both floating on a sea of debt.

So, what should you do about this?

Well, we’re not looking to short CRE just yet at The Discount. That’s because this crisis is looking more like a slow-motion train wreck… than a flash crash (for now). Many CRE stocks have also been hammered already, with many trading at multi-year lows.

Our focus is instead on protecting our wealth over the long run, and cashing in on shorter term trends with swing trades.

We like to diversify in terms of time frames.

Long Term
Mid Term
Short Term

There are several asset classes that we simply buy on discount and hold them. Hence “The Discount”.

We do view everything as a trade, so eventually we take profit, but the long-term trades we don’t stress over the month-to-month.

Our mid-term trades have been outstanding with recent wins ranging from 100% to +400%.

If you remember our weekly “The Inverted Yield Curve: Harbinger of Gloom & Doom”, you will have insight into how we time the market with our long term trades. If you have a 401k or long-term investments, this is a must read.

Also, the yield curve has been inverted for over 14 months now. So, the time to get defensive may be approaching rapidly.

Don’t forget to follow us on YouTube for market updates as well.

Automated Journaling via Coin Market Manager

See You Next Sunday!

Is the U.S. Dollar REALLY in Trouble?

The Discount Newsletter — Sun, 27 Aug 2023 22:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

Is the U.S. dollar really in trouble?

Its status as the world’s reserve currency is certainly in serious question.

And very few investors are ready for what lies ahead.

Thanks to our partners this week at Coin Market Manager

In their eyes, the dollar will always be king and king maker.

But global reserve currencies like the dollar have a “shelf life.” They come and go.

The last five reserve currencies lasted 94 years. The dollar is in Year 103.

To be fair, other analysts have been warning of the dollar’s demise for many years… and in some cases decades.

But efforts to knock the dollar from its throne have kicked into high gear lately.

If you haven’t guessed already, we’re talking about “de-dollarization”.

This is the idea that the dollar’s role in the global economy will decrease over time.

Regular Discount Weekly readers know this theme all too well.

We did a “deep dive” on the subject back in June. If you’re new to The Discount, you can check out that issue here.

We also have a free Telegram Channel where we booked 100-400%+ on longs this entire recent bull run and just nailed the top with SPY and SMH Puts now up over 50-70%. All of our long, mid and short term trades called out and updated in real-time - for free.

In short, we believe the dollar is under assault. Its dominant position in the global financial system will only decrease from here.

This is one of today’s biggest issues, and not just for investors.

Everyone who holds dollars will be impacted by de-dollarization. It doesn’t matter if you’re heavily invested in stocks, real estate, bonds or cryptocurrencies.

Since publishing that issue, this trend has accelerated.

Just last week, Brazil’s President called on the BRICS - a global trade group - to establish a common currency for trade and investment.

The hope is that a common BRICS currency would reduce dependency on the dollar and reduce vulnerabilities, which might have something to do with America “weaponizing” the dollar in recent years.

The group has also discussed settling more trade in their own national currencies, which could also deal a blow to the U.S. dollar.

If successful, it would have profound implications on the global economy.

Today, the dollar accounts for 58% of central bank currency reserves. It’s unrivaled, although it did account 73% of global currency reserves in 2001.

The dollar also dominates the commodity trade.

Practically oil sales - the world’s most important commodity - are settled in U.S. dollars. That’s where the name “Petrodollar” comes from.

In short, the dollar is still king. But the seeds for a very different future are being planted…

A Growing Number of Countries are Moving Away From the Dollar

The BRICs alliance was established in June 2009.

Its name is an acronym for its original member countries: Brazil, Russia, India, China, and South Africa.

These countries make a huge chunk of the global economy. China, for one, is the world’s second biggest economy.

But the alliance is about to become much more economically important.

Last week, the BRICS announced that it would be adding six new members to their alliance - Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the United Arab Emirates (UAE) - in 2024.

Together, the newly expanded BRICS will soon account for nearly $31 trillion, or about 29%, of the global economy, as measured by Gross Domestic Product (GDP).

Once expanded, the group will also account for 46% of the world’s population.

Eventually, BRICS could easily account for more than 50% of the global population. And there are a couple reasons why…

For one, many of its members are still developing nations, meaning their populations are still growing rapidly. Not only that, other countries have expressed interest in joining.

Not only that, the addition of Saudi Arabia, Iran, and the UAE to the BRICS will more than DOUBLE the oil output of the alliance to 43% of global production.

That last point is huge…

Remember, oil is by far the world’s most important commodity. It’s a $2.1 trillion market, making it ten times the size of the global gold market.

And remember, almost all of the world’s oil sales are currently settled in the U.S. dollar. But major efforts to change this are underway…

In January, Saudi Arabia’s Finance Minister explained how the oil-rich nation country was open to trading in currencies beside the U.S. dollar. That’s something it hasn’t done in five decades.

If the BRICs start settling oil in a common currency or even their own national currencies, demand for dollars could collapse.

Of course, that doesn’t mean that the U.S. dollar is headed to zero… like many folks are saying.

It should continue to play a major role in global trade for decades to come.

But its share of the global trade pie could shrink… meaning the dollar could lose value relative to other global currencies.

In other words, don’t expect this trend to play out overnight. It will unfold over the course of decades.

In other words, it’s not time to short the dollar just because the de-dollarization movement is ramping.

Expect the Dollar to Strengthen in the Near Term

We actually see the U.S. dollar heading higher in the coming months.

To understand why, take a look at this chart. It shows the performance of the U.S. Dollar Index over the past year.

This index measures the dollar’s performance versus a basket of other major currencies, including the euro and Japanese yen.

For much of the past year, the U.S. Dollar Index has been falling. But it’s made a stunning reversal in recent weeks.

In the process, it broke the downtrend that it’s been in since late 2022. It’s also reclaimed its 200-day moving average.

This price action suggests the dollar could be headed higher in the coming months.

If that plays out, risk assets like stocks and cryptocurrencies could struggle.

But we don’t expect the dollar to climb forever. Long term, de-dollarization efforts will chip away at the dollar’s market share in trade, investment, and global reserves. And that should cause the dollar to lose value relative to other currencies.

It’s crucial that you’re prepared for this. And one of the best steps you can take today is to start accumulating hard assets…

Now, this could be a false breakout. If so, our free Telegram Channel members will be updated in real-time.

But whether it is now, a few months or a year down the line, we expect a massive move for the dollar as deflationary and recessionary pressures continue to build around the globe.

Own Hard Assets

Hard assets like Gold, Silver, and while still unproven long term, the most popular finite digital currency: Bitcoin.

They have fixed supplies. Unlike the Dollar, Euro, Japanese Yen, or Chinese Yuan, they cannot be created from thin air.

Thanks to our partners this week at Coin Market Manager

This scarcity makes them extremely valuable in a period of rapidly depreciating paper currencies.

And we like them as long-term holdings for a simple reason..

If and when another currency replaces the dollar, it will still be fiat money… meaning its value can be destroyed by whoever is in charge of it.

Join Us in Our Free Telegram Channel

We have many more tactical trades for the long, mid and short term that we are monitoring every day and/or already positioned in.

We update everyone in our free Telegram Channel on trades we are taking, currently in, and keeping our eye on.

We will also be launching The Discount Portfolio soon. Here you can track all of our long term, mid-term, and short-term trades in real-time, with common-sense and detailed analysis for each position we take.

A service that anyone, from beginner-to-advanced, can easily understand and take advantage of.

Be sure to subscribe via email, if you haven’t already, to receive the notification when our portfolio service launches.

Don’t forget to follow on YouTube for video breakdowns and news.

For now, stay tuned and have a great rest of your weekend.

See You Next Sunday!

Time for "The Big Short" on Stocks?

The Discount Newsletter — Sun, 20 Aug 2023 22:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

Stocks are tumbling.

Over the past month, the S&P 500 has fallen 5%. The tech-heavy Nasdaq 100 has slid 8% over the same period.

Many of the market’s most important stocks have got hit even harder.

Apple (AAPL) has dropped 12% from its recent highs.

Microsoft (MSFT) has fallen 14%. And Tesla (TSLA) has nosedived 29% over the past few weeks.

Thanks to our partners this week at Coin Market Manager

The recent sell-off blindsided many investors. But it shouldn’t have…

As you’re about to see, stocks are following a predictable pattern. If history is any guide, the next few weeks could be tough sledding.

But that doesn’t mean you should panic. Soon, a major buying opportunity could present itself… one that both traders and investors will want to take advantage of.

Before we explain why, we want to welcome you to The Discount Weekly. Each week, we examine the biggest issues facing traders and investors… and explain how they impact your portfolios.

Today, we’re going to tell you exactly why stocks are under pressure. We’ll also have an important update on bitcoin to share with you as well.

But let’s begin by looking at stocks.

History Does Not Repeat Itself, But It Often Rhymes…

Stocks follow patterns.

If they didn’t, no one would bother with technical analysis.

The reason for this is pretty simple.

Human nature hasn’t evolved much over the past century.

People still tend to panic sell stocks when they’re falling rapidly. They also tend to chase stocks when they’re rising rapidly.

This is how fear and greed impact our decision making.

Of course, booms and busts aren’t the only kind of pattern that markets follow.

The stock market also tends to follow a predictable pattern around presidential cycles.

The chart, which is based on more than a century’s worth of trading data, says it all.

You’re looking at the Dow Jones Industrial Average has historically performed across the four-year presidential cycle.

In our case, Joe Biden became the 46th president of the United States in 2021. So, we’re in Year 3 of this cycle.

Historically, this has been a good time to own stocks. But that doesn’t mean the gains are evenly distributed across the year.

Historically, stocks start Year 3 off hot. Most of the gains during the first half of the year… before topping out over the summer.

And guess what?

That’s exactly how 2023 has played out.

The S&P 500 rallied 17% during the first six months of the year, while the Nasdaq 100 had its best start to a year ever. Typical Year 3 stuff.

Our free Telegram Channel 100-400%+ on longs this entire bull run (and we also just nailed the top with SPY and SMH Puts now up over 50-70%).

We see this play out over and over again.

It’s because the sitting president will enact all sorts of pro-growth policies during the second half of their term.

The idea is that the current president will have a better chance of getting reelected if they boost the economy.

In this case, the Biden Administration introduced the Inflation Reduction Act and the CHIPS and Science Act last year. These two laws directed billions of dollars to industries like electric vehicle (EV) infrastructure and semiconductor manufacturing

Biden has also promised to wipe out billions of dollars in student loan debt, freeing up a ton of spending money for young Americans.

Now, you might not agree with these policies. But it’s hard to argue that they haven’t provided a near-term boost to both the economy and stock market.

Of course, the sugar high from these policies eventually wears off.

That’s why we often see the market pull back in the second half of Year 3 in the presidential cycle… which just recently entered!

In short, the stock market is currently following the presidential cycle to a tee.

And that’s not the only factor working against stocks…

Welcome to the Summer Doldrums

We’re also entering one of the worst seasonal periods of the year for stocks.

This chart shows the average monthly returns for the S&P 500 dating all the way back to 1928.

Historically, August is one of the weaker months for the stock market. But it’s nothing compared to September.

On average, stocks have fallen about 1% during the month of September. It’s the worst performing month by far.

When you consider where we’re at in the presidential cycle and seasonality, the next few weeks could be quite challenging for the stock market.

So, don’t be surprised if the indices head lower from here.

But that doesn’t mean the bull market in stocks is over. Beginning in October, stocks enter the strongest seasonal period for the stock market… as stocks typically perform strongly from October through January.

In other words, a major buying opportunity could arrive later this year.

The Crypto Corner

Stocks aren’t the only assets getting hit hard.

Crypto is also coming off a major selloff.

Thanks to our partners this week at Coin Market Manager

Here, we’re looking at the weekly chart of bitcoin.

For several weeks, bitcoin was basically doing nothing. It even reached extreme levels of low volatility.

Historically, periods of suppressed volatility like this has preceded big moves. In this case, bitcoin’s big move was to the downside.

This past week, bitcoin crashed 11%. What’s worse, bitcoin broke the uptrend that it’s been in since January.

The good news is that bitcoin didn’t keep crashing after its initial selloff and now it’s at major support.

Bitcoin is now trading at just over $26,000.

Bulls really need to see this level hold. A weekly close below $24,300 would be a major cause of concern. It could signal much lower prices for bitcoin.

What are we doing to profit off these moves and cyclical trends?

We update everyone in our free Telegram Channel on common sense trades we are taking, currently in, and keeping our eye on. We banked over 100-400%+ on plays this entire bull run and nailed the top with SPY and SMH Puts recently as well - those are up over 50-70%.

We will also be launching The Discount Portfolio soon. Here you can track all of our long term, mid-term, and short-term trades in real-time, with common-sense analysis for each position we take. A service that anyone, from beginner-to-advanced, can easily understand and take advantage of.

Be sure to subscribe via email, if you haven’t already, to receive the notification when our portfolio service launches.

Don’t forget to follow on YouTube for daily and weekly video updates.

Have a great rest of your week!

See You Next Sunday!

Could Rising Energy Prices Break the Economy?

The Discount Newsletter — Sun, 13 Aug 2023 22:00:00 +0000

Welcome to The Discount 💰 Dive deep into financial markets with us every week.

Could Rising Energy Prices Break the Economy?

Energy prices are spiking again.

Over the past month, the price of gasoline has spiked 15%.

Crude oil has jumped 11%. We’ve also seen a massive surge in the price of heating oil.

This is clearly bad news for everyday Americans.

Thanks to our partners this week at Coin Market Manager

Higher energy prices means it costs more money to fill up their car. The cost of heating and cooling your home also increases.

This also has huge ramifications for the stock market.

We'll tell you what those are in a minute. We’ll explain why we think energy prices could head even higher from here… and how to profit off that.

But we want to first welcome you to The Discount Weekly. Each week, we pull back the curtain on the biggest issues facing traders and investors… and explain how they impact your portfolios.

This issue is all about the energy market… a corner of the market that far too many investors ignore.

That’s a huge mistake, in our opinion.

The global oil market alone is worth $2.1 trillion! It’s ten times the size of the global gold market, and far bigger that market for base metals like copper, zinc, and aluminum.

The Energy Market Has Woken Up From Its Slumber

For much of 2023, energy prices were either falling or trading sideways.

But they’ve started creeping higher again.

Below we can see that the price of oil stopped falling in May. Since then, it’s rallied 30%.

And that could just be the beginning…

You see, oil’s chart is quite bullish. It’s pointing to higher prices.

Of course, that doesn’t mean oil is headed straight up from here. It’s already closed higher for six weeks in a row.

But this chart has all the characteristics of a bottoming pattern. So, the jury is still out if this is just a dead cat bounce.

And it’s not just oil..

Natural gas also looks bullish.. Below, we can see that natty gas has put in series of higher lows and higher highs over the past few months. It’s trending higher.

Did Inflation Already Bottom?

Rising oil and natural gas prices are a huge deal… and not just because of their direct impact.

You see, fuel is a major operating cost for any business that has to move goods from Point A to Point B. Iit doesn’t matter if they sell televisions, sofas, or watermelons.

If their shipping costs increase, they’re going to pass them along to consumers. They’ll increase prices.

In a nutshell, higher energy prices have a ripple effect. They can lead to higher prices for all sorts of goods and services.

That’s why it pays to watch energy prices. They can tip you off to rising inflation before it shows up in government statistics.

The data backs this up… .In the chart below, we’re looking at the Brent crude oil price versus 5-year forward inflation expectations.

These two variables basically move in lockstep. They’re highly correlated.

In plain English, inflation should pick up if energy prices keep climbing.

This may already be starting to play out…

Last month, the official inflation rate came in at 3.2%... after coming in at 3.0% in June. This marked the first month since June 2022 that inflation climbed month over month.

An uptick in inflation is the last thing bulls want to see.

It would present major problems for the economy.

The Economy Can’t Stomach an Uptick In Inflation

Today, many Americans continue to live paycheck-to-paycheck. Most couldn’t afford a $1,000 “emergency”... like an unexpected trip to the doctor.

To make ends meet, Americans have gone balls deep deep into credit card debt. In fact, U.S. credit card balances have skyrocketed since the pandemic.

All told, Americans are now more than $1 trillion in credit card debt.

You don’t have to be a genius to understand that this isn’t sustainable.

If energy prices keep rising, the U.S. consumer is going to be under immense pressure. It could even lead to a full-blown recession, which would clearly create problems for the stock market.

But it’s not all bad news. Investors and traders can directly profit off rising energy prices by owning energy stocks.

Over the past month, energy has gained more than 5%. It’s been the best performing sector in the S&P 500 by far.

This represents a major change in character for the sector.

During the first half of 2023, energy stocks fell 5.5% while the market climbed 17%. Utilities were the only major sector that performed worse

How to Profit Off Rising Energy Prices

At The Discount, we think the back half of 2023 looks much different for energy stocks.

To understand why, look at this weekly chart of the Energy Sector ETF (XLE).

XLE just recently broke the downtrend that it’s been in since late 2022. This is bullish price action. It suggests that energy stocks could head even higher from here.

And here’s the thing about energy stocks…

They need help from the broad market to perform well. Last year, energy stocks gained 66% while the S&P 500 fell 18%.

This is largely because of the nature of the energy business. Energy is also a tiny component of the S&P 500. It makes up 4.3% of the index. Tech, for perspective, makes up 28% of the S&P 500.

So, consider picking up some energy stocks during corrections, as a way to profit off rising energy prices.

“But DG, which Energy Stocks should we pick?!?”

We will be launching The Discount Portfolio soon. Here you can track all of our long term, mid-term, and short-term trades in real-time, with common-sense analysis for each position we take.

A service that anyone, from beginner-to-advanced, can easily understand and take advantage of.

Until The Discount Portfolio launches, we update everyone in our Telegram Channel on trades we are taking, currently in, and keeping our eye on.

Be sure to subscribe via email, if you haven’t already, to receive the notification when our portfolio service launches.

Don’t forget to follow on YouTube for video breakdowns and news.

For now, stay tuned and have a great rest of your weekend.

See You Next Sunday!