It’s important to look around. Listen to what friends and family are saying. See what the journalists and the economists are telling people.
And then look to do the opposite.
Now, we don’t want to be contrarian just for the sake of being contrarian. That wouldn’t make sense.
But we do want to be on our toes, so when sentiment does get skewed in any one direction, we can be in a position to profit from the ensuing unwind.
This “divergence” between what people are thinking and what is actually happening, is one of the key pillars of what we do here at TrendLabs.
But we’re not contrarians. We’re trend followers.
We just know that the reversion after these divergences can lead to some of the market’s most violent moves.
It Wasn’t Chaos
Let me take you back six months ago.
They were calling it a bear market. We saw some of the most bearish sentiment on record.
Journalists parading around as economists were feeding you stories about this imaginary “age of chaos.”
As it turns out, it was the exact opposite of “chaos.”
The market immediately went on to have one of the greatest and least-volatile six-month periods of all time.
They were wrong. Or just lying to you. Either way, it was to our benefit. So for that we are thankful.
Now, go check out their most recent fairy tales about a coming debt emergency.
They Were Wrong About This Too
We want to find where everybody’s wrong, and we want to do the opposite when it turns.
That’s what we did when they promised you all that chaos. I was right here telling you exactly which stocks we were buying.
Because that’s what this is all about…
What’s the trade?
For years they told you all that mattered was the “Fed’s balance sheet.” Allegedly, that was the only reason stocks were going up – not because it was a bull market.
Well, it actually turned out to be that it was just a bull market, and the Fed or its balance sheet were not the isolated driver that we were being told it was.
This chart from Mike Bird is making the rounds this week.
He asks and answers a good question: “Who remembers those Fed balance sheet / S&P500 charts? You don’t see those so much any more.”
This chart shows once and for all that it was not this “balance sheet” story they were feeding you.
It was just a bull market.
And it still is.
The thing is that there are lots of people out there who don’t want it to be a bull market. They actually wish it was chaos, so their conspiracy theories about the current administration could prove to be true.
Otherwise, they just look like idiots for fighting the trend just because they didn’t like the guy in charge.
That must be a hard way to go through life.
And those kinds of people aren’t in Las Vegas with me right now. They’re off alone somewhere hoping all this winning would just end soon.
Well, it hasn’t.
And Las Vegas is booming. There’s no bear market going on here, let me tell you.
I was at the Golden Knights hockey game last night, and the place was rocking.
Today, I’ll be giving a presentation at the legendary Stansberry Conference. Everyone is here this week for the big event.
I’ll be on the main stage at 2 pm. And then Happy Hour at 6 Vegas time at the Lobby Bar at Encore.
We’re talking all things finance and social media. Come say “hi” and bring your best ideas!
Stay sharp,
JC Parets, CMT
Founder, TrendLabs