Hey There Income Hunters,
What a week!
A perfect V-shaped recovery after Monday’s mini-meltdown.
It was another ideal “buy the damn dip” opportunity …
Hedge fund flows have been a key driver during the S&P 500’s incredible 4%-plus move in just the last month …
You see, fund managers cannot afford to sit and watch their competitors ringing the cash register.
And, really, can you?
However, FOMO drives much of the decision-making process and that is a dangerous strategy …
Today, I am going to share what caused this psychological shift and its impact on the market going forward.
QE and Fiscal Policy on All Cylinders
Jerome “J-Pow” Powell and Janet Yellen have done an incredible job tapping into the risk-taking psychology of investors.
An eye-watering $2 trillion dollars of stimulus for the markets in six months is pretty amazing:
Playing the momentum game has become the only game in town…
Valuation just doesn’t matter because the Fed and fiscal stimulus have created a speculative mentality of just keep buying the damn dip.
Missing the Forest for the Trees
I call this the Great Money Illusion.
And it’s wild to see some hedge fund managers get sucked into the same game as retail investors.
The danger for fund managers is they are now caught in trading the narrative.
What I mean is, they are following the crowd — and that is never a healthy long-term strategy …
Right now, you have the politicians, corporations and the media cheering on the markets, because the markets are where the money is.
Capital inflows to equities in the past six months dwarfed all the years since the 2008 financial crisis:
In other words, this has become an extremely crowded trade.
Don’t Play the Consensus Game
To be a consistently successful trader, you have to be ahead of the consensus narrative.
You want your vision to be the upcoming consensus narrative.
You want to have the position first — before everyone is starting to talk about it — and then get out first as it becomes crowded.
You want to have access to the inside intelligence of what Washington is really doing — not what they’re saying.
You want to know the Fed’s agenda and exploit it, not naively believe our central bank is doing what’s right for you.
Here is the inside scoop …
A lot will change in the next couple of months. The Treasury has used up its excess funds in the Treasury Government Account (TGA) at the Fed.
Yes, some inflationary buckets within the consumer price index will lessen in the months ahead, but others will increase and inflation will remain elevated.
The Fed will have no choice but to begin tapering in the fall.
The key is to be better prepared, with the straight dope and the right trading strategies that put you ahead of the crowd and in positions where you can maximize your return on capital.
In short …
This event will give you the tools and the truth so you can stay ahead of the crowd …
- You can learn how to trade hedge fund — without the performance pressures…
- You can have access to the inside intel from the experts who have operated on the inside.
- And can speak directly to pro traders who turn current events into the day’s best trade ideas.
Bring It Home
If you have been reading Power Income for any length of time, you know I have been saying the US is near the end of our long-term debt cycle.
I also have also been saying the tide would turn by the end of Q3 or into Q4…
We are not far off now and within six weeks there will be a change in the narrative, and you need to know the news ahead of the crowd.
Hope to see you in the room. Until then …
Live and Trade With Passion,