Investors Have Many Causes for Concern Right Now
A series of negative catalysts are stacking up against the market’s upward momentum.
It’s been an unbelievable 17 months for the market since concerns over the COVID-19 pandemic crashed the market in March of 2020.
The panic that the worst health crisis in more than a century created led to the market seeing some of the largest single-day drops in history.
But since that time, the market has been on an incredible bull run – with the S&P gaining more than 73% since the March 2020 lows.
A horde of new retail traders looking for something to do during lockdowns – often armed with stimulus checks – is given a lot of the credit for the market’s resilience for nearly a year and a half now.
But the strong economic recovery since the start of the new year has also played a major role, and investors have piled into the stocks that are poised to make the biggest comebacks.
With the S&P 500 now sitting once again at all-time highs, several factors are coming into play that have a lot of investors worried about a significant pullback – myself included.
Let’s take a look at what’s brewing on Wall Street, and how you can protect yourself moving forward.
Where’s the money?
After a year and a half of strong upward movement, it seems a perfect storm is brewing that could cause a big reversal for the market.
I’m always a little wary of hitting new all-time highs. When the market has been running as hot as it has been over the last year and a half, it’s only natural for investors to take profits and for the market to sell off a bit before attracting new buyers.
Throw in the fact that several factors seem to be working against the market’s bull run right now, and you’ll get an idea of why so many investors are nervous right now.
To start, there’s the resurgence of the virus that caused the crash of 2020. The Delta variant of COVID-19 is sweeping across wide sections of the country and threatening to put a damper on the economy’s recovery.
Economists are also concerned about signs of slowing growth in several key economies around the globe, including the U.S. and China. That in turn has hurt prices of important raw materials and oil in recent weeks.
And then there’s the worry over rising inflation and the impact it will have at the Federal Reserve. The Fed has already signaled that it intends to begin tightening its monetary policy and raise interest rates in the near future. The stronger-than-expected inflation we’ve been seeing could force their hand sooner than may expected.
While that seems like enough to convince anyone that a pullback is coming, there’s one more thing you should be aware of.
One that could kick the whole thing off…
How do I get some?
During post-election years, August has typically been one of the worst months for the market, ranking the worst for the Dow and second worst for the S&P 500.
In the last 25 years, only eight times has the last week of August seen a gain. The rest have been down weeks.
While the market got off to a good start yesterday, if we see any selling pressure in the rest of the week, it could lead to some panic selling, considering everything the market has working against it right now.
And that could just be the start of a bigger fall.
It’s still too early to know just how deep a pullback we could see, but I would advise caution before planning any new investments this week. I certainly wouldn’t be putting a lot of money into new positions right now while we wait to see what the damage is going to be.
That said, there is still one trading strategy I’m confident in using in any market condition…
Weather any market with S.C.A.N.
In volatile market conditions like these, it’s more important than ever to be nimble in your trading and seek quick gains from the wild movements in the market.
And there’s one tool that I rely on to help you do just that…
Using the incredible power of my S.C.A.N. system, I’m able to track the largest money inflows and outflows in real-time – giving me invaluable insights on which stocks are poised for huge movements.
Earlier this month, Project 303 subscribers had the chance to bank an 87.5% profit in just a single day thanks to the trade S.C.A.N. helped me to identify.
I advised them to buy a particular call on CVS Health Corporation (CVS) that was getting greater than usual interest from the market’s largest institutions.
And just a day later, Project 303 subscribers were already celebrating having hit our profit target.
Following the biggest money flows works in any market condition, even during a pullback.
So, no matter what the Fed, the pandemic – or anything else, for that matter – throws our way, my S.C.A.N. trading algorithm will continue to serve as our compass through the markets.
Want to learn more? Click here for everything you need to know.
In the Spotlight: It’s that time of year…
The autumn months are almost upon us.
But while the weather is still sweltering hot, one company is already taking advantage of the excitement of the fall season – and raking in a ton of money in doing so.
It seems to happen earlier and earlier every year. The return of pumpkin flavored beverages to the menu of Starbucks Corporation (SBUX).
While it may seem like a trivial thing, fall-flavored beverages are big business.
The “PSL” is Starbucks’ most popular drink. In fact, estimates for global sales are nearly $500 million per year.
With SBUX rolling out their PSLs and new cold options on menus starting today – the earliest it has ever done so – I’m expecting big things from their third quarter results. This is a name to keep an eye on for their next earnings report.