I’m going to add something to the website that should be pretty exciting.  As you know I use the Greedometers for trading. Because central banks allowed more reality to happen than usual in May, I was able to use the Greedometers to make a 60% return –in May alone. Central bankers are going to be busy over the next 1-2 years trying to stop another really inconvenient reality. I’m not sure they have enough ammo and credibility left. Indeed over the next 1-2 years if central bankers do not have sufficient ammo & credibility remaining we’ll see the largest crash since 1929.

To squash the legions of trolls out there I am going to show how large returns can be made during a protracted stock market crash. I am going to put $25K in two accounts and post the statements. Account 1 will use leveraged ETFs only. Account 2 will use options. The goal for account 1 will be to turn $25K into $50K over the course of this protracted crash.  The goal for account 2 will be to turn $25K into $1M over the course of this protracted crash. The biggest risk is not that I/the Greedometers will be wrong. The biggest risk we face is this:

  • surprise Trump Tweets of impending marvelous trade deals and more reckless unfunded tax cuts that further rob from our future by virtue of loading our national balance sheet with yet more long term debt
  • surprise press leaks from White House officials of something yummy (hello Larry Kudlow)
  • surprise announcements and leaks from Fed Chair Powell that something yummy  is coming
  • surprise announcements and leaks from NY Fed Prez Williams that something yummy is coming
  • surprise announcements and leaks from St Louis Fed Prez Bullard that something yummy is coming
  • surprise announcements and leaks from the ECB that something yummy  is coming
  • surprise announcements and leaks from BoJ that something yummy  is coming
  • surprise announcements and leaks from PBoC that something yummy  is coming

To be clear, the Greedometers and the SPX forecast they generate are going through the process of baking in:

  • the Fed dropping the Fed Funds rate to 0 over the next year, stopping QT
  • a China-US trade deal
  • the ECB enlarging QE and following Japan’s lead by buying the stock market with freshly printed money
  • the BoJ installing a new turbo charger on their QE printing press and buying even more of every financial asset there is in Japan.
  • the SNB (Switzerland) following BoJ.
  • the PBoC putting short sellers in jail, dropping interest rates, dropping reserve ratios for banks, printing yuan and buying its own stock market.

What?  You thought the stock market was a reflection of corporate earnings and growth prospects. Poor poor investor. The U.S. has not had capital markets with price discovery in 20 years.

 

Look for a new page to be added with details on these two $25K accounts and the progress towards large returns via the Greedometer algos.