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When you “foot the bill,” it means that you are left having to pay for something both unexpected and costly. .
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In this posting you get to hear me go on a MAD RANT! And yes, I already know that some readers will be offended by what I have to say here. I ask for forgiveness in advance.
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(Please note that if you right click on your computer mouse, you will be given an option to “print.”) .
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Our new “K” shaped economy: 
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We have gradually moved into a “K” shaped economy. This has already happened and I see no easy fix, although the problem will eventually create its own cure. The top 20% of Americans, those that have high paying jobs OR those who maintain a continually funded INVESTMENT ACCOUNT will get richer. The middle class is getting squeezed to death and the poor are becoming even poorer.
Top 20% of the “K”… President Trump is doing all of those things that will create the scenario for massively increased corporate profits and since stocks represent partial ownership in a corporation, then investment accounts should be especially profitable going forward. You have to combine this with the fact that ongoing stimulus is going to be coming into the markets from the Fed (effective December 12th, the Fed began a brand new QE program to the tune of an ongoing $40-Billion per month… money printing on steroids!), and from the Treasury, the Government, deregulation*, subsidies, kickbacks and from corporate stock buybacks.
IMO, a highly profitable bubble will inflate during the next few years and then pop and crash over the following few years. Perhaps it inflates until 2029 and then deflates until 2032?? For experienced investors, the market can be profitable in both directions… during bull markets and during the bigger bear markets (as in 2000 and 2008).
The bottom 80% of the “K”… A lot of money will be transferred to the rich and their corporations during good times and even more will be transferred to the rich during difficult times. The real problem is that the corporations are totally and completely taking over all control and ownership under our new de-regulated “K” regime… even our beloved public lands are about to be sold to corporations. Trump’s new appointee to head the Bureau of Land Management is on the record for wanting to sell 100% of all public land and forests to corporations.
Strong corporations send the stock market ever higher while the same conditions send the working class to new lows. The bottom 80% will work very hard to prop up and to grow the corporations. Importantly, the taxpayer will totally bail out the corporations when times are especially bad. YOU have already done this repeatedly, as in 2000 and 2008 and during Covid, but the next time it will be at an entirely new and unexpected level. And I can already see “the next time” on the far horizon, several years out.
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*DE-REGULATION occurs at the start of every financial bubble and a few years later, the newly created financial bubble leads to a crash. Deregulation was quietly announced on the morning of December 11, 2025: 
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If the government just massively prints money (and money printing started again on December 12, 2025) to cover expenses and debt and crashes, then inflation will go sky high and the working person will pay incredibly high prices for literally all goods and services. Inflation is a “tax.” The higher the inflation, the higher the “tax.” I remember seeing home mortgage rates hitting 19% back in the very early 1980’s. Inflation always comes in three waves; we’ve completed the first wave. The first wave was created by a panicked President Biden tossing endless taxpayer dollars at a pandemic caused downturn that was “V” shaped and that only lasted for a few weeks… and then by the Federal Reserve waiting way too long to raise interest rates in order to lower the high inflation levels.
To be honest, President Trump inherited a real mess. He was elected because of his slogan that only he could bring prices down and he would do so on day one. However, in my opinion, we are just now slowly entering the bigger second (global) wave and this will entirely be President Trump’s mess. It is like a tag team of short-sighted incompetence. The third wave (during the 2030’s?) might stagnate the entire U.S. and developed markets economies (emerging markets might receive some benefit from this third wave).
Again, inflation is a “tax” that YOU end up paying. You foot the bill for all of the government’s activities. Just sending the small U.S. Navy fleet toward Venezuela is costing $200-Million per month and we aren’t even in an actual war, yet. Sending the National Guard into the beautiful city of Portland, Oregon (I used to live there) which Trump calls a “hell hole,” is costing $2-Million per month (for just this one city). Yes, you are paying for that, and you are paying for much, much more. .
The government doesn’t seem to understand that people actually work very hard for their hard-earned money; the government takes tax money out of your paycheck and they then spend it… but it is not FREE money for them to spend. 
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So, this is an example of what I am talking about in this posting:
- On “Liberation Day,” President Trump placed extremely high tariffs on agriculture (you pay the tariffs) and he immediately began deporting migrating farm workers (no, you do not want to pick lettuce all day long).
- A full 50% of all family farms in the U.S. went into bankruptcy in 2025!
- Corporations moved in to buy these family farms at a discounted price.
- Trump plans to send (taxpayer funded) checks out to cover 25% of the damage that his “Liberation Day” tariffs caused, but…
- Now the partial rebate, which you pay for, goes to corporations instead of farmers.
- President Trump recently surrendered many of the tariffs, for instance, the tariff on soybeans. China has now agreed to buy only 5% of what they purchased BEFORE the tariffs were placed on soybeans. They are on track to actually purchase only 1% of what they were purchasing each month. Going forward, YOU will have to bail out
farmerscorporations each and every year. - ALL of this will be paid for by you, the taxpayer… you will pay higher food costs plus you will bail out the
farmerscorporations. You lose twice and the corporations win twice. You will foot the bill.
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But you say that with tariffs, we are going to be able to eliminate the government’s gigantic deficit while closing down the IRS and eliminating all federal income tax. President Trump tells us that we are “bringing in trillions and trillions of dollars and we will end all Federal income tax.” What are the actual facts?
- The national debt is $39-Trillion. This does not include the $100-Trillion needed to continue to fund Social Security and Medicare for the next decade. The government has already collected this “entitlement” money from you and me, out of our paycheck, but they then spent it on other things. So it is fair to say that the national DEBT is actually $139-Trillion.
- Yearly Federal income tax receipts are $5-Trillion.
- Current interest on the Federal debt is $1-Trillion per year, 20% of the total budget. This cost is growing rapidly.
- Trump’s added tariffs (minus the already pre-existing tariffs) are only bringing in $125-Billion extra per year (not trillions and trillions!).
- Trump plans to send $2000 to each taxpayer (rather than responsibly paying down debt). This comes to a $250-Billion total cost which is 2x what his new tariffs actually brought in… so your partial rebate will be paid for by YOU and then you will get to pay taxes a second time on your rebate because your own rebate will be counted as new income.
- And down the road a bit, this is going to create another rating agency downgrade for the United States, possibly in late 2026 or early 2027 and this will cause a big bump in the road for the stock market.
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As I’ve been writing, although we have several years left to this gigantic “roaring 20’s” style bull market, there will be the mother of all bear markets arriving when it finally ends (so please invest now!!!!!). This future bear market will clean out the system and reset prices, so some good will come out of it. But guess who will bail out the corporations (and the government?) when this future crash hits? Did you guess that it will be you, the taxpayer? (Just as it was you bailing out the corporations during the de-regulated “bubble pops” in 2000 and again in 2008.) You will foot the bill via higher costs and/or higher taxes. YOU will foot the bill.
How do you escape or mitigate all of this? Other than (somehow) getting a high salaried job, there is only one answer. Fund an investment account now, stop wasting money, and just keep shoving money at your investment account. And fund your IRA or ROTH or SEP each and every year! If you are middle class but you have an investment account, then you are striving toward being in the “lucky” top 20%. I know that this posting sounds morose, but do you and your family honestly want to be struggling?
Investment accounts allow you to hedge your life. If gas prices go up, hitting your wallet, you will own some profitable gas stocks that will offset the loss. If food goes up in price, hitting your wallet, you will own some profitable agriculture stocks that will offset the loss. If your home utilities go up in price, hitting your wallet, you will own some utilities. If rents go up in price, you will own some REITs, receiving rental income. If the coming gigantic money printing debases your USDollar holdings, REALLY hitting your wallet, you will own some bitcoin. And gold is all powerful when it comes to mitigating any and all inflation.
We have to create our own financial security and we have to hedge our life going forward. .
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Recent AI generated bitcoin (crypto-currency) prediction: 
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Per the chart below, MarketCycle’s simplified (proprietary) inflation indicator started showing inflation rising again effective August 2025 (see purple circle below). One of the important things that MarketCycle has discovered is how to accelerate economic data. If the rise in inflation continues, the Fed may see inflation rising via their own in-house indicators sometime around February or March of 2026, unless… What could alter this inflation thesis, turning the below (blue) line down again?
- The Supreme Court shooting down tariffs, and this just might happen. If they do so, then the money would have to be repaid to the U.S. corporations (again, via your hard-earned tax dollars). This would likely cause some ‘bumpiness’ to the first half of 2026 (made worse by President Trump gaining control of the independent Federal Reserve, a scenario that has never happened before).
- AI is, by its very nature, highly deflationary. AI will cause lower worker wages and it will cause a greater number of fired employees: both deflationary and unfortunate. AI says that artificial intelligence may eliminate/replace 30% of all jobs in the United States by 2030. A recent Senate study has just come to the same conclusion. My personal guess is that this might actually take ten years. AI already has an IQ of 120 in a world where the average citizen has an IQ of 100. Moore’s Law tells us that this AI IQ will double every two years, forever.
Inflation is rising again (note the purple circle): 
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During the next 10 years, these jobs are relatively safe from AI replacement: 
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2026 end-of-year S&P-500 projections from leading institutions (Yardeni often nails it and Tom Lee has the same 7700 end-of-year target for 2026). I normally do not give end-of-year forecasts because it cannot be done, but if I had to give a price for December 31, 2026, I think that I would agree with the 7700 number… but, as always, it would not be gained without some zig-zagging volatility along the way.
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A (slightly altered) recent email to a client in response to his question: 
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In late-October, MarketCycle saw risk levels increasing; the market fell in November. Then we saw risk abating and the market rose in the first half of December; it rose because of the super-strong seasonals of the normal “Santa Clause Rally” that will continue into January of 2026. We are watching risk levels closely as we enter 2026 because the improvement in indicators was less than was the December price gain. Our risk indicators are not based on emotions or “feelings,” they are mathematically calculated and based on certain conditions that occur before every single bigger market drop, and this requires decades of experience.
Since most corrections going forward (for the next few years) will be very temporary and “V” shaped, we will have a higher threshold before we put any hedge on accounts. I do expect that we will see one relatively fast bear market between today and the final “pop.” The current buzz in the press & podcasts is that the AI trade and crypto are both now dead. This is a literally fantastical concept, like saying, back in the late 1990’s, that the Internet and computers weren’t going to last… and now, of course, you can hold a miniaturized super-computer in your hand. 
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I’d like to end by saying that it is my personal belief that, once the system is flushed out, that we will head toward a much better and saner world, re-built by the youth of the world, appropriately named “Generation Alpha”… and I’m still bullish! .
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That’s it… thanks for reading! .
MarketCycle Wealth Management is in the business of navigating your account through rough waters. Money can be made in both bull markets and in the bigger bear markets and actually, bear markets can be even more profitable. I (almost) doubled my money during each of the past few bigger bear markets, and now I want to help you. .
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MARKET CYCLE — INVESTING — TREND FOLLOWING — RELATIVE STRENGTH — HEDGE FUND
Shattered
All charts were posted on October 28th and published on November 1st. This posting is mostly pictures and charts, so it is shorter than it seems. There is a PDF and print function at the bottom of this posting, on the website.
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It is an exciting time in the markets… well, at least for me it is. I feel as if I have an inside peek at what will happen during the coming years, although I treat each day’s and each week’s analysis as if I could be entirely wrong.
I’ve been watching a particular chart of the Chinese stock market, shown below, for the past 10 years. I created the chart in 2015 and drew the suspected trendlines out into the future. On October 27, 2025, China FINALLY shattered through its extreme long-term bear market trendline (see the purple circle below, middle-right) and the breakout has held. Chinese stocks are extremely undervalued considering the extreme size of its economy and the giant monetary stimulus that they are planning to release, plus the most recent Trump-Xi trade negotiations are behind us for the next 6 months (next planned meeting is in April of 2026).
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The below Performance Chart shows the gains of the S&P-500 (in red) compared to the Chinese stock market (in blue) since the beginning of this current Secular stock bull market in late-2008. Obviously, until now, the U.S. stock market was the only place to be invested. What we need to understand is that the investable market is now broadening out to include developed markets and China.
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I have created around 200 (all similar) relative strength charts, covering all assets, that I can rapidly scroll through that show relative strength based on the trend direction of just one line on the chart (as shown below). Relative strength tells us how strong one asset is as compared relative to another. In the case below, we see how strong China is as compared to the S&P-500. When the line is moving DOWN, as it is currently doing, then the China stock market is projected to be stronger than is the U.S. stock market over the intermediate term (several months or possibly longer). I have to admit that a year ago I did not expect to see this much positive momentum in China, but it partly has to do with the weakening of the U.S. economy over the past 10 months while China’s economy is strengthening.
On this chart… line down = China up.
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In the United States, the S&P-500 will very likely reach more than 7000 before year’s end. There might be some near-term volatility and chop… the shown blue dashed trendline channel is too narrow to be of much longer-term importance. The true trend channel cannot be seen on this one-year long chart.
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Originally released on January 1, 2025, these are the end-of-year S&P-500 “projected targets” given by the major U.S. institutions; most will likely be wildly wrong. FundStrat Research and Ned Davis Research, both of which I subscribe to, projected 6600 but we are already over 6900 as I post this article.
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The USDollar is still holding within the walls of its BULLISH 12-year trend channel, but it warrants careful watching. The USD is slow moving; it ultimately may just gyrate sideways within a range of 89 to 115 for several more years into the future.
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October 31st Bloomberg headline quoting Bank of America’s head strategist, Michael Hartnett:
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Gold is also suddenly taking a breather; it might gyrate sideways over the coming months, creating a series of higher lows within a fairly tight range as it did earlier this same year. It tends to jump higher and then slide sideways and then jump higher and then… But over the long-term, it will likely churn much higher. [Goldman Sachs projects that gold will move higher to hit $4900 by year’s end.] When we look back ten years from now, gold might be seen as the strongest and safest long-term asset. It is moving generally higher under activity that will remain favorable for gold… debasing the USDollar, increasing government debt, increasing market volatility, deregulation of assets and slowly increasing general inflation.
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Gradually and over time, there are a lot of retail buyers (red line below) and Central Bank buyers of gold (gold = blue line below) that will be forced to play catch-up, possibly driving gold prices higher for many years. Over the coming decade, I expect gold to eventually go much higher than most people could even imagine. The U.S. Government is the one Central Bank that is not buying more gold, we hold a lot already. Instead, the U.S. is buying (and seizing) crypto currency.
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Whenever gold temporarily weakens, bitcoin often takes the lead and moves higher; bitcoin and gold are sort of like a tag team. One does well while the other one rests and then they switch. Like gold, bitcoin also tends to move higher, then sideways, then higher, then…
After a bit more near-term turmoil, bitcoin may soon head higher again, perhaps to $150,000(??). MarketCycle’s client accounts hold twice as much gold as we do crypto and this is because crypto is twice as volatile as is gold.
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Bonds have also recently shattered through their 6-year long bear market trendline and bond volatility is finally back in the low-risk area. This allows us to add bonds back into portfolios, with high-quality corporate bonds being (unusually) less risky than are government bonds. Again, see the purple circle:
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Most professional investors now believe that the Fed will not lower interest rates at its next announcement meeting in December, but they may be forced to do so if the employment situation worsens. It is not just tariffs; even though AI is still at its beginning stages, it is adding to job losses at a more rapid rate than most people anticipated and Federal Reserve Chairman Powell fully understands this.
Headline from this week’s Fortune:
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The all-important corporate earnings are still climbing higher. Stronger corporate earnings = stronger corporate stocks = stronger stock market.
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And finally, MarketCycle’s sensitive inflation indicator, that turns a ton of data into one simple line on a chart, is now turning higher again (blue line below). It is designed to make early calls about the path of inflation, before other investors see what’s happening. Inflation is generally caused by tariffs, debt and money printing; we have all three in abundance.
Gray line = Fed… blue line = inflation… they should almost be running in sync, and they are not because the Fed is always late to respond. The purple circle shows the recent turn-up in inflation. This means that the Fed should actually stop lowering rates unless the jobs numbers worsen… but they won’t ask for my opinion.
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SUMMARY: I remain a broken record… I am still bullish… I am still bullish… I am still bullish!
That’s it and thanks for reading!
MarketCycle Wealth Management does this: We use our decades long experience to navigate your investment account through rough waters while following secular macro themes. Over the longer term, the stock market ultimately moves on themes, trends, momentum and factors… not on individual stock selection.
The great Peter Lynch didn’t “buy stocks,” he bought one factor: momentum.
And Warren Buffett didn’t “buy stocks,” he actually bought one factor: large-cap quality-value.
MarketCycle is affordable and we try hard to earn our keep. We often know things ahead of the crowd that most others simply miss. MarketCycle listens to a lot of smart people and we subscribe to some of the most elite research advisories, but we ultimately make decisions based on our own clear and accurate indicators coupled with an experienced understanding of global-macro and market-cycles… and a lot of common sense.
Yes, we are accepting new clients, and you will never see a better time to invest than right now.
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MARKET CYCLE — TREND FOLLOWIING — RELATIVE STRENGTH — DUAL MOMENTUM — HEDGE FUNDS
Powell Announces Start of Profitable AI Bubble
In the Fall of 1996, Federal Reserve Chairman Alan Greenspan unwittingly announced the start of the first “Technology Bubble” by saying that we were entering: “A period of irrational exuberance.” That highly profitable Dot.com bubble inflated for another three years before popping… subsequently sending the market (slow-motion) crashing for two years.
And now, in the Fall of 2025, Federal Reserve Chairman Jerome Powell has just unwittingly announced the start of our second (AI) “Technology Bubble” by saying: “By many measures, equity prices are highly valued.” My prediction is that this new highly profitable bubble will also inflate for another three years before popping. That “pop” will also send the stock market “slow motion” crashing over a two-year(?) period.
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Who made the most money during the Dot.com bubble? (It will be the same in the coming AI bubble.) Numerous studies show that it was the buyers of mutual funds ETFs; the buyers of individual stocks generally lagged even the S&P-500 because the market moved higher on “themes,” not individual stock earnings and hype.
When an individual invests using individual stocks, once they reach a total of 5 or more stocks, they make (only) the same amount of profits as does the S&P-500… they normally do not outperform. And if they hold less than 5 stocks, then their risk of ruin increases dramatically. It isn’t that unusual for an individual stock to lose 25% or more in a single day, but an ETF could never, ever lose money like that; watching the downside is every bit as important as is watching the upside.
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We are currently in an overlapping Secular stock bull market and a Cyclical stock bull market. Bullish long term and short term cycles have merged. No wonder the market just keeps grinding higher. Double strength, and we are not yet done.
Of note, we are likely to get one more cyclical bear market between now and the final end to this super-bull.
When the current technology bubble finally pops, the stock market and economy will then move into an overlapping Secular BEAR market and a concurrent Cyclical BEAR market. We will switch from 18 years of double strength to 10+ years of double weakness. (Secular bears can also be exploited for profits.)
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Where do I see current strength? Gold, silver, fixed-rate corporate BONDS of almost any duration, most stock sectors (even the healthcare sector appears to be turning higher), most cap sizes (with small-caps & mid-caps now showing as much strength as large caps), developed market stocks held in Euros, IPOs, growth stocks and momentum stocks.
Gold miners show GREAT strength, but I would personally prefer to hold gold over gold miners because pure gold offers better diversification and protection. And over the next few years, silver may prove to be even more powerful and important than is gold… but I would still hold more gold than silver because it offers better portfolio protection. By the late 2030’s, gold may hold an extreme value of perhaps $25,000 per ounce. Yes, I am serious. Starting back in the year 2000, I personally started collecting brilliant-uncirculated 150-250 year old European gold coins when gold was still $250 per ounce and it was a much less expensive hobby (and yes, they are in a security storage unit, not in my home).
Utilities and real estate are both defensive sectors, and we hold both via “active” ETFs, and they offer some protection when the general stock market is falling. Gold and bonds also offer protection during any downside for stocks. I currently, and for the first time in my life, prefer high-quality corporate bonds over Treasury-bonds. Treasury-bonds may be down for the count because no foreign country currently wants to loan money to the United States Government.
Bitcoin currently has weak breadth and weak momentum. Downside support is at $100,000; next upside target is at $150,000. By 2029 Bitcoin and Ethereum may both be higher than people can currently imagine.
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Way back in October of 2011, when I was the only one announcing the official start to this Secular stock bull market, I started predicting a technology bubble that would culminate in a huge tech bubble in the later years of the 2020’s with the final three years being, by far, the strongest. I repeatedly stated that it would likely end in 2029, but then Trump came along to speed things up, so I now think that it will be even more parabolic but that it ends, perhaps, one year earlier, in 2028. Historically, Secular stock cycles have been 18 years long, but that isn’t etched in stone, so we will continually watch for the signs of a major top. My goal is to nail the date of this top, just as I did with the prior two major peaks in 2000 and 2008.
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President Trump’s economic plan is to:
- Lower taxes for wealthy business developers and corporations… (while passing the rising costs of goods and services onto the average American).
- He wants to completely deregulate corporations and financial institutions so that they can grow unencumbered. (This is exactly what caused the Great Financial Crash of 2008.)
- He wants to flood the economy with money in order to force growth. (This will cause a massive increase in our government’s debt level.).
- He wants freely flowing fossil fuel energy (regardless of any environmental problems) in order to supply cheap energy to corporations and to AI data centers.
- He wants to artificially lower interest rates toward 0% in order to offer money (cheap loans) for corporate expansion and for home purchases and for IPO creation. (0% interest rates + tariffs = inflation.)
These five things will super-inflate the stock bull market. Unfortunately, continually over-inflating the economy and the market can only end with one outcome.
And what smart and very easy thing could President Trump do to help to shore up the U.S. Government? We have 147-million troy ounces of gold in Fort Knox. In the past it was given a book value of $42 per ounce and this price has never been updated! If Trump were to sign an executive order that simply raises the worth of this stored gold to its current price of $3855, then we instantly have a whole lot of money. We would pull an instant $650-billion out of thin air. It could be used to shore up the USDollar without a single ounce of the gold disappearing. Somebody should tell him.
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From the highly respected (and expensive) Ned Davis Research:
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The path of inflation is likely to follow the path of the stock market higher through (roughly) 2028 before falling again during the final big bear market. The DARK BLUE line below shows inflation from 1974-1982 and the LIGHT BLUE line shows the tracking of current inflation. The two lines continuing to track each other would fit perfectly with my long-held prediction.
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Gold moves higher when people are worried about the condition of the world, like now. This next chart shows the price of gold from the start of the 2024 election cycle year; it has moved up from $2000 per ounce to more than $3855 on September 30th… a roughly 90% gain in just two years, which is unprecedented. (MarketCycle accounts generally still hold a 20% position in gold and silver.):
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Despite the constant chatter about of a weakening USDollar, the below 15-year trend-channel chart shows that the USDollar is still moving within the walls of this BULL market trend channel… and just below this is super-strong support @ 89 (orange dashed line). I drew this chart way back in 2021 and projected it into the future.
If the USDollar (USD) temporarily breaks through its long-term trend channel and hits 89, and it may, then it is likely to then bounce higher again, back into the (then broken) trend channel. A falling USD is what President Trump is promoting, but the market participants will ultimately determine the price of the USD. Strong countries generally have strong currencies and this counterbalances any chaotic USD weakening activities of the current administration. A tug in both directions ultimately, over time, pulls the USD (gyrating) sideways, as it has already been doing for the past decade.
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After being bearish during all of 2008 and early 2009, during the Financial Crash, I have been BULLISH on stocks since the first week of April in 2009, only two weeks off of that bear market bottom. I remain bullish today.
Because I have not actually met the vast majority of my clients, I still look at everyone’s photo once each week in order to remind me whom I am working for (some clients just won’t send me a photo, but I’ve managed to find most of them on social media!). Because of my self-imposed reclusive hermit lifestyle, I tend to remain invisible… but I definitely still care!
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Cartoon hint: Dracula is driving the white car…
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MarketCycle Wealth Management was started so that we could help to navigate your investment portfolio through the coming bubble and subsequent crash… both of which can be highly profitable for one that understands the nuances of complex market action. CONTACT US if you think that we can help you! (HINT: We can!)
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MARKET CYCLE — TREND FOLLOWING — ETF — SECTOR INVESTING — RELATIVE STRENGTH — DUAL MOMENTUM
My Crazy Thoughts
Written on August 31st, 2025.
It is crazy how there are too many good things to invest in. This is a rare opportunity and you just have to pick and choose from a long list of potential assets. The difficult multi-year concentration, with only the top 7 mega-cap technology stocks outperforming, has suddenly moved toward strength spreading out far and wide. A multitude of sectors and assets and regions and cap sizes are all now doing well.
As I recently wrote to clients in a private MarketCycle Update, the market was (and still is) presenting with signs of a near-term period of temporary weakness. August and September are often weaker months for the economy and stock market, and if not, then October is usually the difficult month. Perhaps the S&P-500 wants to pull back toward 6200? That isn’t bad; it is a routine pullback. We WILL move higher again… to new record highs. The stock market ALWAYS has to let off steam when it gets a bit too hot (like now), and this is a good thing. Pullbacks lead to new highs.
So, pullbacks are a normal part of investing in a bull market. Protection partly comes from our portfolios being diversified in such a way that all assets are in their own bull market and yet they do not all move in unison! IE, gold is currently in a bull market and stocks are currently in a longer-term bull market, and they move independently of each other.
One wants to ignore temporary “V” pullbacks… but to absolutely avoid the big bear markets.
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Intermediate term STRENGTH IS FOUND IN: growth stocks, momentum stocks of all cap sizes, AI, robotics, innovative-technology, Bitcoin, Ethereum-blockchain, financials, industrials, small-cap stocks (which will benefit from the Fed lowering interest rates this Fall and all through 2026, plus they are a great anti-tech position that can go up when tech drops), gold & silver, private credit and developed market stocks (which will benefit as the USDollar drops a bit lower in the near-term, before recovering in the intermediate-term). Newly increasing strength can be seen in REITS, healthcare (non-pharmaceutical)… and perhaps China (if it can break above its strong, long-term overhead bear market trendline).
REITS, for a host of reasons, look promising; they are not only defensive in nature, but they are severely oversold. They go up when interest rates are lowered (coming soon, courtesy of Trump) and they go up when higher inflation is created (also coming soon, courtesy of Trump). They pay tax-advantaged interest. They have a (price-to-earnings valuation) P/E of 16x in a world where big tech has a P/E of 29x. REITS and healthcare and financials all have low P/Es of 16x, meaning that they are undervalued. REITS, healthcare and financials (plus utilities and most technology) suffer almost no impact from President Trump’s tariffs.
Potential NEW BUYS?
- REITs (Real Estate Investment Trusts) are the #1 recent buy suggestion from BlackRock, centered in residential and global data centers. [Note that BlackRock is not the same company as BlackStone, and they do behave differently.] Avoid private-equity REITS; they are ill-liquid and their total collapse, in a few (4???) years, may help to cause the next big super-bear market, just as collapsing fraudulent home mortgages accelerated the Financial Crash of 2008. Home prices may dramatically drop during the coming super-bear market (and fixed-rate mortgages may be quite low again), with prices recovering fully during the 2030’s. Because of the strong potential for stagflation in the 2030’s, avoid floating-rate mortgages like the plague. If you buy your home at the bottom of the next bear market (in 4-ish years?), because of the strong tax incentives, NOBODY should ever pay cash for a house… let the bank buy your house for you whenever interest rates are low. Perhaps a fixed-rate, no points, 15-year mortgage when both prices and rates are cheap? After all, this is, by far, the biggest expense of your lifetime and if you need or want to get out, it can act as if it is an ill-liquid investment. In the meantime, renting is always a good choice, and renting is easy to get out of.
- Healthcare sector (minus pharmaceuticals and biotech) is the #1 recent buy suggestion from Goldman Sachs (and Warren Buffett). Aging demographics throughout the developed markets helps to backstop this investment.
Near term, large-cap technology may show some weakness over the coming weeks. And Crypto may show some near-term weakness. Frankly, the strongest asset that I see right now is gold. The strongest asset, when the big super-bear market arrives in a few years, will likely be gold and not crypto, despite what the entire world currently believes.
Inflation seems to be holding at the 3% level which I predicted a couple of years ago. Nobody will remember that. President Trump artificially pushing rates toward 0% could raise the inflation level toward chronically higher levels, well above 3%. During the 2030’s, I’ve been predicting killer inflation levels, creating severe stagflation. INVEST NOW! Delay your need for instant-gratification (of buying things) by just a few years, then buy them cheap at the bottom of the coming super-bear market!! If I am correct, then sometime around the year 2030, everything is going to be dirt CHEAP (before prices rise higher than ever during the 2030’s decade).
Right now, we are in the early stages of a very profitable multi-year bubble formation. Trump wants to artifically move interest rates toward 0%, regardless of the higher inflation that he will cause. Deregulation (literally “anything goes”) is moving at lightning speed. Investors are becoming immune to President Trump’s non-stop shenanigans. There is money sloshing around everywhere you look; tons of it. Zero rates will create very low margin borrowing levels for investors (and low fixed-rate mortgages). It will force “savers” away from bonds and into the stock market. Low rates create great market-boosting stock buy-back conditions for corporations (who want to raise their stock price by buying and then eliminating their own stock shares, making all remaining shares more valuable). These are all very strong tailwinds that will drive the stock market higher!
A relatively new client recently asked, “Will we be able to see the final top in this bull market just before the bubble pops?” My strongest investing ability is seeing tops and bottoms forming. Clients sometimes call to argue with me at the time, but over the past 35 years, I have been continually right about major tops and bottoms… almost always to the exact week and sometimes to the exact day. And I say this with no humility… I mean “with all humility.” lol
So, yes, likely near-term weakness, but I am still CRAZY BULLISH!
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MarketCycle Wealth Management is in the business of managing your investment account so that you can be positioned in the strongest assets and so that you can avoid the big downturns that damage investment portfolios. We try hard to earn our keep. There is a CONTACT tab at the top of our website.
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MARKET CYCLE — HEDGE FUNDS — MOMENTUM — RELATIVE STRENGTH —
Manifest Destiny
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The stock market is showing incredible internal strength. It was weak and has now strengthened. Usually when the stock market has been weak but then improves, the economy itself (and home prices and the consumer) then becomes temporarily weaker as stocks rise up off of their bottom. That is happening now: stronger stocks, weaker economy; the two do not move in tandem.
And then there is Trump.
President Trump naturally spent the weekend threatening high tariffs again and he (temporarily) followed through on Monday with attacks on some of our closest allies (and the Dow stock index is down over 600 points as I type this today). Frankly, I just wish that he would concentrate on his golf game; he certainly doesn’t understand how tariffs or the economy work. Volatility, with drawdowns, is the result in the near-term… but it won’t last; the stronger stock market will eventually win.
Trump’s “Big Beautiful Bill” just passed and is now signed into law… and please don’t shoot the messenger: The rich get lower taxes and more loopholes; the poor get higher taxes and higher food & health care costs and more hurdles to jump. Hungry poor children lose their school lunch assistance. Hospitals and clean energy suffer under the new bill. Trump gets endless money to build prison camps for legal naturalized citizens and illegal migrant workers, not just in the Everglades of Florida, but his stated plan is to build them all across the country. Social Security itself was weakened by the bill since the tax cut for some seniors comes directly out of the Social Security system’s coffers… but if you work after qualifying for Social Security, and if you earn too much, you are penalized. Of course, the deficit quickly goes up by another $3.3-Trillion; the United States is now $37-Trillion in DEBT.
-$37,000,000,000,000
We may get some near term (tariff caused) economic weakness & turbulence plus continued weakness in home prices and consumer spending… with weakness ending in the late Fall of this year? Below is a weekend quote from President Trump. I don’t know about you, but I can’t figure it out. I do know that when push comes to shove (if the stock market suddenly drops), Trump will cave in on tariffs, continuing the TACO trade. Please remember that tariffs are NOT paid by the foreign country… they are ultimately paid by YOU in the form of higher prices. And we have to remember that tariffs haven’t really happened yet… July 9th is the deadline… or is it August 1st? (Quote courtesy of Fortune via Yahoo News):
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Tariffs impact stock sectors differently, with the below sectors on the left being the safest in a “tariff world.” REITs and financials (banks) and gold & crypto would also be on the left. MarketCycle’s client accounts are strongly leaning toward the (green) left on this chart (Chart courtesy of Apollo Global):
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Everything that is needed for the stock market to run higher is now in place since corporations no longer need to worry about regulations or any damage to our environment. And the super-bull market will now broaden out and pick up speed and, in my opinion, it will eventually go parabolic for longer than people would currently believe possible.
We are in the final few years, the strongest years, of a 20-year secular stock bull that started 16.5 years ago. The current period will mimic 1997 to 2000, where Internet stocks went sky high and generated outstanding profits.
And the bear market that always follows at the end of all 20-year secular bull periods is a real killer. The last example was the Dot.com Crash in 2000 which was followed by 10 years of weakness (and the crash was copied again in the Financial Crash of 2008). If I am right, the coming crash at the end of this decade may totally reset both politics and the economy (and maybe the U.S. even just defaults on its debt or we allow the Federal Reserve to “buy” all of our debt and permanently hide it in their non-audited books?)… a chance to start over, including a new gold backed digital currency since the U.S. owns most of the world’s physical gold; a chance to do things differently and better. Crisis leads to opportunity.
During the next few years, it will be innovative technology and particularly AI & robotics and crypto & blockchain (and inflation assets) that will lead the way to great profits. By 2028 the stock market may be moving parabolically higher and this might even cause people to (dangerously) take out second mortgages on their homes and to borrow money from brokerage houses in order to toss the money at the stock market.
There will be some bumps along the road, perhaps a temporary larger pullback in 2027, but investors just need to hang on until the very end. My job is to spot the end times and then to switch gears AT THE RIGHT TIME in order to profit from the destined big bear market that will then be due.
Technology is fairly immune to tariffs and interest rates and inflation. Technology has been leading the market higher, BUT it is still in the early stages of its ascent. Innovative technology, just now at the middle of its “S” curve cycle, is likely to be a particularly strong asset during the coming few years. AI and robotics technology are both extremely important, as are the smaller utilities that run AI data centers and the big banks and private credit companies that fund the new technology startups. Effective July 1st of this year, the market is suddenly broadening out while the USDollar is less strong, which means that we now have an opportunity to successfully buy innovative & disruptive technology in all cap-sizes and from all countries, including Japan and Asia.
Interestingly and hard to believe (and fact checked) Amazon literally just created its millionth robot (imagine, Amazon now has 1,000,000 factory robots!). Meta has just hired a giant “who’s who” list of AI builders. It’s happening, so one might want to buy into the stock market and just hold on! (Chart courtesy of TechCrunch)
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I personally believe that the need to create an intelligence is built into our DNA and, as a sort of “manifest destiny,” it cannot be stopped. So, going forward the BIG story will be artificial intelligence (and robotics). The rush into AI will likely push the stock market to unbelievable heights over the next few years. AI & robotics will be a key factor during the remainder of our lives (and beyond), no matter how the stock market reacts to the AI & robotics trade in later years. I now use AI every day of my life.
This important chart below shows the potential of what may be THE great technology super-bull that is still in its early stages. My bet is that the “AI trade” goes parabolic for a profitable and prolonged period. Going forward, every time that someone on Wall Street declares that we are in an AI technology bubble and that we should “watch out,” just laugh and ignore them… they have no clue as to how big a bubble can become. In my opinion, this AI bull will be big.
The current wave may prove to be the big one… we’d currently be just about where the question mark is. (Chart courtesy of Benedict Evans, a technology expert based out of London):
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In general, MarketCycle’s client accounts hold the following positions (there may be some accounts that are too small to hold all positions and custodial trusts for minors and corporate accounts cannot hold any “esoteric” positions):
- Gold bullion
- Private credit funding for technology companies (half floating-rate & half fixed-rate, 100% secured, paying 7% interest)
- Bitcoin & MicroStrategy (our bitcoin ETF pays 28% interest without cutting into profit gains and MicroStrategy is cornering the market in Bitcoin)
- Managed futures (long-short global interest rates, global currencies and commodities, but does not hold stocks… a great diversifier and a big help during inflationary periods)
- Developed market growth stocks (growth = strong)
- Small-cap momentum (momentum = trending strong)
- Mid-cap momentum (cap = size of the corporation)
- Large-cap momentum
- U.S. Technology sector
- Global innovative technology
- Global artificial intelligence
- Global robotics
- U.S. large-cap banks (they fund new IPOs and mergers)
- U.S. small-cap to mid-cap utilities (they supply energy to AI data centers)
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That’s it, thanks for reading!
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MarketCycle Wealth Management, for a low fee, manages brokerage accounts for the general public… in the United States and globally. There is a contact tab at the top of our main website. We strive to earn our keep.
Our REPORT site can be reached via the connecting link on our website.
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