Did Stocks Just Go Bearish?

by Nick Hodge

We got another peek behind Wall Street’s curtain this week. 

This virus sure has been revealing. 

We’ve seen Senators dump stocks before warning Americans that a deadly pandemic was headed our way... 

We’ve seen the S&P lose 35% of its value in a month… only to recoup it and rally on to new highs despite economic numbers that were depressionary. 

And now we’ve seen a crowd of Redditors derail hedge funds via a so-called “Gamma Squeeze”, sending shares of GameStop and others to the moon, rendering fundamentals (at least temporarily) meaningless. 

You are seeing history play out before your eyes. 

Each of these things are not “the event” by themselves. They are symptoms and side effects of the larger issues at hand. 

Your government — Ds and Rs alike — created a monster. A deformed, hideous version of crony capitalism and oligopoly that has taken wealth inequality to unsustainable levels. 

The people have had it. They've taken to the streets and to the Street. 

And they’re making progress. 

Good on them for voting out the slithering senator that dumped her stocks (Kelly Loeffler). 

Good on them for beating Wall Street institutions at their own game. 

It shouldn’t be lost on you how fast banks, brokerages, and even Reddit itself combined to quell the uprising. How dare the commoners play the King’s game. 

I would encourage you, as always, to focus on you.

I haven’t made any significant moves as a result of this week’s market action, whether that's the Reddit phenomenon or the selloff we had on Wednesday. 

Things can change quickly, as we have seen over the past year, but for now I’m staying the course we’ve been on. 

What’s the Course Again?

The course is stocks can and will continue to go up in this inflationary environment.

The down days this week haven’t changed the current cycle — yet. We need a few more days to confirm. 

For now it’s still energy (including clean energy) and cannabis re-inflating. 

Gold is consolidating, which is why I’ve been selling select positions since September. But now is the time to be building positions for the next leg up. 

The dollar remains in a bearish trend while real rates are rising. 

Year over year numbers for earnings and the economy are going to start looking good compared to the lockdown-depressed numbers of Q2 last year. 

We’ve had a couple of big down days for stocks. 

I would need to see the S&P close convincingly below 3646 to start getting bearish.

Enjoy the weekend. 

Call it like you see it, 

Nick Hodge
Editor, Daily Profit Cycle

Nick Hodge is the co-owner and publisher of Daily Profit Cycle and Resource Stock Digest. He's also the founder of Hodge Family Office, the umbrella organization for his three premium services: Hodge Family Office, Family Office Advantage, and Foundational Profits. He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.

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