It’s the first Wednesday of the month… and that means a new Monthly Market Insight with Mike and Chad!
Go ahead and click on the video thumbnail below to see everything that has been covered.
We went through their forecast from last month and got some new insights for you as well.
For example, Mike Carr was right to be cautiously bullish early last month. Afghanistan’s double whammy and an aggressive new strain of Covid rocked markets mid-month … but they came back straight away. In August, the S&P 500 rose 2.9% at yesterday’s close, the biggest monthly gain since April.
But Mike’s call for this month is where you really want to pay attention… Check it out below…
Mike says we are looking at the barrel of market conditions that we have only seen twice in 100 years.
The last two times? 1929 … and 2000.
Do you notice a pattern? Of course you do. These are two of the most damning dates in financial history.
Here is the summary …
There is a frightening divergence between the real economy and the prices of financial assets.
A new wave of Covid lockdowns, forced evictions, inflation and many other forces are starting to ease the real economy.
Meanwhile, the easy money is set to push stocks and house prices to an explosive high in the coming months.
We can already see it on the housing market …
My home in Palm Beach has grown almost 20% since I bought it in February.
On a 15% down payment basis, I achieved a return on investment of 120%… in six months… on the housing market.
Terrible? Yes too.
This stuff is not supposed to happen …
When this is the case, many investors who have not studied history tend to get carried away by the mania and end up making stupid mistakes.
An economist I worked with described it as a feeling of “going to financial heaven”.
He fools the masses into believing that they have reached a kind of fiscal nirvana.
Fortunately, no one knows more about the financial story than Mike Carr.
This is a market period that you are really going to want to lean into and be very careful with. Do the right things and you can make a fortune quickly (I can attest to that).
Do them wrong and you can get burned.
Look at the outlook – it’s all there.
This is something that we will probably be touching a lot in the coming weeks.
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Editor-in-chief, True masters of options
Card of the day:
Multi-year summits in sight
By Mike Merson, Editor-in-Chief, True masters of options
(Click here to enlarge the image.)
Inventories and home prices aren’t the only places where we see excess …
This year, the crypto market has been equally subject to the Federal Reserve’s easy money policies.
But today I want to highlight one outlier in particular. This is Ethereum (ETH), and to do that we are going to look at the ETH / BTC chart.
This chart represents the price of ETH against Bitcoin (BTC) as a ratio. If the chart goes up, ETH outperforms BTC. This has been the case for much of 2021.
Note the break of the blue downtrend line at the end of March. When this happened, ETH continued a 173% run against BTC until early May, when the entire crypto market fell 50%.
And now, over the past month, we’ve seen ETH break down of them major downtrend lines –– the pink and blue lines at the top right of the chart.
Let’s just say the ratio follows a similar course this time around. This would place ETH / BTC at a level of 0.12 – its highest level since the end of the 2017 bull market. If BTC stayed at today’s levels, that would equate to a price of around $ 5,200 per ETH.
But this pair of ratios will not increase in a straight line. Which is more likely, in my opinion, that BTC will hit at least $ 100,000 during this time. This puts the price target for ETH once this race is over closer to $ 12,000 per ETH.
At the moment, there is no way to play the price of ETH with options in the stock markets. The Grayscale Ethereum Trust (OTCMKTS: ETHE) – the only pure ETH game available – is not available as an option.
But it trades at a slight discount to its net asset value… which makes it an attractive method of gaining exposure to equities to this trend.
Editor-in-chief, True masters of options