Weekly Stock Market Forecast

This week we have a stock market forecast for the week of 4/18/21 from our friend Bo Yoder of the Market Forecasting Academy. Be sure to leave a comment and let us know what you think!

The S&P 500 (SPY)

SPY Daily Chart - Stock Market Forecast

If you were not clear about how directly the impact of the Fed’s expansion of the money supply affects the S&P 500 (analyzed here using SPY), this daily chart will fix that.

The market is levitating into what appears to be a “blow-off top,” as it becomes absurdly overbought.

But don’t fall into the trap… Continue reading "Weekly Stock Market Forecast"

What Is Cryptocurrency Anyway?

When you take your first look at cryptocurrencies like bitcoin, it can make your head swim. I know it did mine. But in this article, we’ll break down cryptocurrencies into bite-sized chunks so you can understand them just as well – or even better -- as the cash in your wallet.

First off, if you didn’t get a chance to do a deep dive into my first article of this three-part series on blockchain and cryptocurrencies, no worries. This article will get you up and running on like a crypto pro in no time. (But do take a spin around that article when you get a sec – it’s a good blockchain primer without all the jargon.)

So, let’s get started!

Cryptocurrency is a type of currency category that you’re most likely comfortable with already: Digital currency. Pretty much without exception, most money these days is digital currency.

After all, when you check your bank balance online, you’re looking at a digital representation of your money. And that’s digital currency.

In fact, you could look at cryptocurrency as a distant cousin of your online bank account, digitally speaking.

But unlike your bank account, cryptocurrencies have some unique and exciting features that make them interesting. Here are two important ones. Continue reading "What Is Cryptocurrency Anyway?"

World Oil Supply And Price Outlook, April 2021

The Energy Information Administration released its Short-Term Energy Outlook for April, and it shows that OECD oil inventories likely peaked at 3.208 billion in July 2020. In March 2021, it estimated stocks dropped by 19 million barrels to end at 2.932 billion, 32 million barrels lower than a year ago.

The EIA estimated global oil production at 93.47 million barrels per day (mmbd) for March, compared to global oil consumption of 96.0 mmbd. That implies an undersupply of 2.53 mmb/d or 78 million barrels for the month. That implies non-OECD stocks dropped by 59 million barrels.

For 2021, OECD inventories are now projected to draw by net 149 million barrels to 2.877 billion. For 2022 it forecasts that stocks will draw by 1 million barrels to end the year at 2.876 billion.

OECD Global Oil Inventories

The EIA forecast was made incorporates the OPEC+ decision to cut production and exports. According to OPEC’s press release April 1, 2021: Continue reading "World Oil Supply And Price Outlook, April 2021"

Stock Market: What Happens When Rates Rise?

The broader indices have been in a blistering bull market for a year straight, only accelerating from November 2020 into April 2021. The rally has been largely uninterrupted, with minor blips in September and October of 2020 before reaching new all-time highs after new all-time highs by mid-April. The initial rally was narrowly focused on technology and the stay-at-home economy stocks. With the improving vaccine prospects, November saw a sea change with broad market participation with value stocks breaking out with huge moves to the upside. To boot, Washington's massive stimulus is being priced into the markets via fiscal and monetary stimulus. All three major indices (S&P 500, Nasdaq, and Dow Jones) are at all-time highs and continue to break into uncharted territory in what seems like a daily basis.

Stocks are overbought and at extreme valuations, as measured by any historical metric (P/E ratio, Shiller P/E ratio, Buffet Indicator, Put/Call Ratio, and percentage of stocks above their 200-day moving average) or technical metric (Bollinger Bands and Relative Strength Index - RSI). Valuations are stretched across the board, with the major averages at all-time highs and far above pre-pandemic levels. A rise in rates due to inflation could be lurking in the shadows of this frothy market.

If/When Inflation Hits

If the Consumer Price Index (CPI) continues to push higher, The Federal Reserve may be compelled to entertain the idea of raising rates finally. Although interest rate risk disproportionally impacts fixed-income investments such as bonds and annuities, stocks will undoubtedly be impacted as well. This is especially true for highly leveraged companies such as tech and super-charged growth companies. Even the prospect of higher rates hit the Nasdaq in March for a sharp decline, albeit that decline was quickly erased. This is a case in point of how quickly the markets can turn negative with the hint of rising rates which may be exacerbated in an already frothy market. Continue reading "Stock Market: What Happens When Rates Rise?"

ETF Play For The End Of The Pandemic

Imagine the pandemic ending. Well, I am sure you have already done that, maybe even a few times over the last 12 months.

The pandemic ended through whatever means, and now it is 'safe' to go live your life, similar to how we all did before last year.

What do you do? What do others do?

Maybe go out and party? Go on a vacation? Relax and over-indulge a little in some activities during the pandemic you couldn't or didn't want to do?

Well, perhaps, in a nutshell, be a little 'sinful'?

What you consider sinful may be different than others, but most likely, you're relaxing or celebrating will likely involve alcohol, to some extent. And it's not hard to see how a lot of other American's will be partaking in a drink or two the day the pandemic officially comes to an end. Continue reading "ETF Play For The End Of The Pandemic"