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

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:

1. Lower taxes for wealthy business developers and corporations… (while passing the rising costs of goods and services onto the average American).
2. 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.)
3. 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.).
4. 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.
5. 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 

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  — 

 

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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):

1. Gold bullion
2. Private credit funding for technology companies (half floating-rate & half fixed-rate, 100% secured, paying 7% interest)
3. Bitcoin & MicroStrategy (our bitcoin ETF pays 28% interest without cutting into profit gains and MicroStrategy is cornering the market in Bitcoin)
4. 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)
5. Developed market growth stocks (growth = strong)
6. Small-cap momentum (momentum = trending strong)
7. Mid-cap momentum (cap = size of the corporation)
8. Large-cap momentum
9. U.S. Technology sector
10. Global innovative technology
11. Global artificial intelligence
12. Global robotics
13. U.S. large-cap banks (they fund new IPOs and mergers)
14. 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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MARKET CYCLE  —  TREND FOLLOWING  —  ROTATION  —  RELATIVE STRENGTH  —  DUAL MOMENTUM  — HEDGE FUNDS

Clients may take it for granted that I am bullish during a bull market.  I mean, what else would I be?  I sometimes quote my (famous) investor acquaintance, Ed Seykota, by saying:  “It is not logical to be bearish in a bull market.”

Well, most investors are still illogically bearish, and this includes professionals and major institutions and even the paid analysts that so many investors depend on.

When one “shorts” the market, they are betting, with their hard-earned money, that the market is going to fall sharply.  Right now, we have the biggest hedge fund ETF short position in the history of the universe.  This makes me very bullish because most people are always wrong… when sentiment is too bearish, it is a very bullish signal.

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And we currently have the most money, in the history of the universe, still sitting on the sidelines, waiting & wanting to move into the markets but too afraid to make the move, although it will.  This makes me long term bullish since much of the $7,250,000,000,000 will slowly enter the market over the next few years.

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Currently, most investors are still selling into any rallies (see the red area at the far-right bottom).  This makes me very bullish.

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But when the stock market drops 18% and then (“V” shaped) recovers as quickly as it just did, then the market tends to just keep moving higher (see the green vertical lines as compared to the S&P-500 over the past 55 years).  This makes me very bullish longer term.

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Currently, there are 34% more home sellers in the United States than there are home buyers.  This will lower home prices, which will lower inflation (because 55% of inflation is being caused by high home prices), which will allow the Federal Reserve to finally be able to lower interest rates, which will be extremely stimulative for the entire stock market, including the very undervalued small-cap stocks.  Lower yields would also offer lower rates on new home mortgages, so that stimulation would put somewhat of a floor under home price losses with, perhaps, strengthening home prices showing up again sometime in 2026.

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SUMMARY:  I’m watching provisions in Trump’s “Big Beautiful Bill” and how it affects U.S. investments by U.S. citizens and by overseas investors; I’ve probably read more about the bill than have most members of Congress.  There is certain to be a battle getting approval for the bill because Trump’s program would increase the U.S. deficit by a whopping $5.8-Trillion (which defeats any legitimate purpose of DOGE… which is now to continue under the leadership of Peter Thiel).

The economy (and housing) is starting to weaken.  Stocks lead the economy… stocks were weak, but they are steadily getting stronger.  And now it is the lagging economy’s turn to weaken as stocks now get stronger.  It is likely that six months from now, in the late Fall, both stocks and the economy will be strong at the same time and remain strong for an extended period.

So, I remain bullish.  I am still bullish on U.S. stocks but have also added Developed Market stocks to our mix (such as Euro area, Northern Europe, UK and Japan).  The USDollar, despite its recent weakness, is still within the walls of its bullish trend channel, but I still also hold gold bullion which is “anti-dollar.”  Artificial intelligence and innovative-disruption stocks will lead the way higher over the next few years.  Big banks will gradually be funding new (IPO) Initial Public Offerings of innovative new baby companies, and both will profit.  Growth stocks will continue to beat value stocks over the next few years, until they fall out of grace in the 2030’s.  Of course, we will continue to get zig-zagging (often Trump caused) volatility and occasional downdrafts.

And we will eventually get the big bear market that is always promised at the end of ALL secular bull market cycles (as in the technology based Dot.com bust in 2000), and that will offer additional profits because it will finally be the correct time to “short” the market.  Again, a “short” is a bet that markets will drop.  But at that “end-times” event, we will be the rare short holder and most of the market participants will be euphorically bullish and buying on every dip, as the market drops (and drops and drops) over a, perhaps, two year period.  But that is not now and it is not soon.

Although everyone else is highly negative, I’m so (patiently) bullish that I’m almost giddy!

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Thanks for reading!

MarketCycle Wealth Management is in the business of watching over the investments in your brokerage account.  The entire process is easy.  We try hard to earn our keep. 

The REPORT website can be visited via the connecting link on the main website.

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MARKET CYCLE  —  TREND FOLLOWING  —  MOMENTUM  —  RELATIVE STRENGTH  —  HEDGE FUNDs

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My last few blogs have been long, so as the pendulum swings, this one will be somewhat shorter.

We are in a secular stock BULL market that started in the Spring of 2009.  Historically, they last for around 20 years.  Secular stock market cycles are long cycles that determine the prolonged strength or the weakness of the markets.  When we are in a secular stock BULL market, the bullish periods will be exceptionally strong and the bearish periods will be less significant.  This current secular BULL cycle likely ends in the Fall of 2028 or the Spring of 2029… I’ll know when we get closer to the end.

We are also in a concurrent and overlapping cyclical stock BULL market that also likely runs until the Fall of 2028 or the Spring of 2029.  Cyclical stock BULL markets run for around 6 years and this one started in the Fall of 2022, at the bottom of the 2022 bear market.

20-year secular bull cycles usually contain three 6-year cyclical bull market cycles plus two bear markets.

The two cycles, secular and cyclical, may end together in late 2028 and both would move in unison into a combined secular AND cyclical bear market which, if history proves to repeat yet again, the combined bearishness could end in a monster bear market crash.  Perhaps the worst in history.

Crashes can be more rapidly profitable than can be any bull market.  I made most of my personal money by shorting the entirety of the crashes of 2000 and 2008.

But right now, a super-strong and unstoppable bull market continues higher; I expect the final couple of years of this bull market to be parabolically strong with a market emphasis on artificial intelligence, robotics and innovative technology… sort of a super-copycat of the late 1990’s Dot.com technology bubble.  If I am correct, people will be obtaining margin loans and mortgaging their house to get hold of extra money to invest in the stock market; a dangerous pursuit because these same people will get themselves trapped in the eventual bear market.

What will cause the next giant bear market?  Massive U.S. government debt (Trump and the Republican Congress members are well into the process of passing a gigantic debt increase, mostly for tax savings for the top 5% and for military weapons, via Trump’s “Big Beautiful Bill.”  This follows Biden’s out-of-control spending habits).

A headline from today’s CNBC financial website:

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So, how will we fund our debt?  It is normally done via the U.S. selling Treasury bonds.  But now, nobody wants to own U.S. Treasuries.  I am writing this article on May 21st and today’s Treasury Auction was a complete dud and the stock market, that was flat, dropped 800 points on the Dow within minutes of the auction.  Treasury bonds are essentially loans given to the U.S. government.  Right now, nobody wants to loan the U.S. government any money.  Most of MarketCycle’s client accounts own NO Treasuries.  So, to fund our rapidly growing debt/deficit, the U.S. will “print money” and buy its own debt via a “not talked about” Quantitative Easing process… which will work… until it doesn’t.

This process of “printing money” to buy our own debt, coupled with Trump’s tariffs (which are entirely paid for by U.S. corporations and U.S. consumers) will create high inflation.  High inflation makes the cost of servicing the debt rise and rise and rise to eventual unpayable levels.  Specifically, this is what will cause the coming debt-ridden bear market.  Unpayable debt and inflation that would be impossible to stop without the Federal Reserve raising interest rates beyond 20%.  Yes, that is what I believe.  I saw rates go to 19% in 1981.  My first home mortgage was at 16%… and I was too dumb (and unstoppable) to understand that 16% is problematic.

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Right now things are good in the markets; where should we invest?  Below is what the market itself is telling us to hold (and this is primarily where MarketCycle’s client accounts are positioned, although I am not suggesting that you should do the same):  innovative technology, mega-cap technology, financials (large banks), consumer services and small to mid-cap utilities.  Momentum stock ETFs would hold primarily those sectors just mentioned, and particular momentum ETFs are often winners (but some are poorly designed).  We should also add “crypto” into the mix.  REITs may not do as well as during past bull markets.  Industrials should (eventually) get stronger again as the new administration in the White House backs further away from their destructive tariffs.  At the end of this final super-bull market, energy will also get strong, just as it did during the Dot.com bubble bull market.

Invest in assets that generate outsized profits (Chart courtesy of Datatrek):

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Artificial intelligence, which offers humans astounding benefits along with accompanying terrifying consequences, will soon be the big (big!) money maker and its profit potential will continue to be under-estimated.  My opinion is that the creation of artificial intelligence is unstoppable… sort of a modern “manifest destiny.”  (Chart courtesy of Morgan Stanley.)

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Certain “momentum” ETFs are often a good method for catching the best assets during the best times, although they have to be watched carefully during downturns.  MarketCycle always holds a minimum of 25% momentum stocks in our portfolios.  (Chart courtesy of Alpha Architect.):

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That’s it… thanks for reading!

MarketCycle Wealth Management is in the business of managing your money through the market cycles.  There is a contact tab on our website, but I can be reached via:

StephenAust@MarketCycleWealthManagement.com

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MARKET CYCLE  — DUAL MOMENTUM  — TREND FOLLOWING  —  RELATIVE STRENGTH  — HEDGE FUNDS

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In my first incarnation, when I was in practice and steadily seeing patients, I would do an exam and then give a report of my findings, attempting to make sense out of the presenting chaos & confusion, backing up everything that I reported with proof.  It was the “proof” that allowed patients to understand that I knew what I was doing and to trust me.  And it is proof that I am constantly searching for as I attempt to make sense out of the current market chaos & confusion.

[There is a PDF & print function at the bottom of this blog, on the website.]

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The stock market hates one thing and one thing only:  chaos & confusion

For better or worse, we suddenly live in a world of chaos & confusion, all created by the daily changing whims of one man that wants to ‘dictate’ even the tiniest detail.

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This first chart shows the global level of economic chaos & confusion.  (Chart courtesy of the conservative Bloomberg Economic Research)

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This next chart below comes from the highly respected conservative publication, The Economist.  This is the #1 publication used by hedge funds in their decision making.  The chart shows President Trump’s approval rating on the economy.  I have gone for the past two decades without being the least bit political in my writings, but now politics is the thing that I have to deal with on a daily basis.  My first thought upon awakening each morning is:  “What bad thing happened while I was sleeping?”

The first three months; Trump’s approval rating on the economy.  (Chart via The Economist):

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Let’s first look at what the market environment would be like if things were normal.

Earnings are good.  Jobs are good.  Taxes are low.  The Fed wants to be accommodative.  Inflation is low (although now rising again because of tariffs).  Margin has not been called in and margin is still being used at surprisingly low levels.  Markets are very oversold on a daily and weekly basis.  New lows on the NYA are now bullish.  The VIX is now giving a bullish signal.  MarketCycle’s proprietary “short-term-buy” indicators have now triggered “bullish.”  We are still in a secular bull market and despite the recent hit (explained below) the United States is still the powerhouse of the globe.

We were due for a stock market pullback because of overbought conditions and we got that right on cue in February and early March of this year.  The (S&P-500) stock market was correcting and then bottoming perfectly at 5500, and the pullback was over and done with.

But then:  Donald Trump spoke in early April… and the world came unglued and it fell apart. 

Surprisingly, 90% of Trump voters do not have brokerage accounts, so they have not yet been hurt by Trump’s actions.  Only 10% have brokerage accounts, although they are giant portfolios, and these people have easy access to him, even if they have to buy it.

Immediately after “Liberation Day,” the market began to fall.  A better name may be “Obliteration Day” because $10-Trillion was wiped out in the global stock market in just 2 days.  This is what $10-Trillion looks like:  $10,000,000,000,000.  That’s a lot of digits.  Almost nobody imagined the ridiculously high level of tariffs that would be rolled out… IE, 47% on Vietnam.  This massive two-day drop was caused by fear, but also because the entire world, which mostly owns U.S. stocks, immediately SOLD all of their U.S. assets, bonds and stocks and currencies… and they moved everything back home.

Trump’s tariffs = U.S. down and everyone else up.  It is like telling everyone to take their money out of the U.S. and to just leave.  The entire planet is angry at the entire United States.  A friend that recently flew to the U.S. from Europe, on a normally crowded airplane, was the only person on the plane.  Nobody wants to come here.  Visitors are now being stopped and even detained at the airport.

U.S. exceptionalism in the markets ended in an instant, with one proclamation.  Nobody wanted to own our stocks, so they fell sharply.  Nobody wanted our bonds (which means that nobody wanted to loan us money) so they fell sharply.  Nobody wanted to hold the U.S. Dollar, so it fell sharply.  Normally if bonds go down then the Dollar goes up, but not this time because both fell in unison.  This is a unique and temporary phenomenon, it won’t last, but it was strong initially and it indicates that nobody on the planet currently wants to deal with this new and profound chaos & confusion.

So, after “Liberation Day,” U.S. markets went down and almost crashed… but Trump flinched, as I knew he would, and he backed off of his doomsday plan.  He has now seen that breaking things simply for the sake of breaking things is often a mistake.  My wish is that he will somehow remember that he almost crashed the markets.  He seems to anchor to certain beliefs and then he tries desperately to confirm his beliefs rather than challenging them.  That is a big mistake and we are the ones that would have to pay the price.  We’ll literally pay the price because Trump’s tariffs and Trump’s need to force lower interest rates would result in sky high prices for every single thing that we all ‘consume.’  If implemented, these high tariffs would literally be the biggest tax hike in history and it would be placed almost entirely on the shoulders of hard-working Americans, rather than on the rich.  Tariffs are a regressive tax.

But somehow I hold the opinion that Trump will back off even further and we’ll all be saved from obliteration.  He’ll find some way to “save face” by saying that he “won” and that he got “great things never seen before” out of his “art of the deal.”  And then he’ll take credit for the stock market jumping higher again.  If he backs off and only sets tariffs at a general 10% level, and if he doesn’t find a way to fire Jerome Powell from heading the Federal Reserve, then the stock market may immediately leap higher and investors will have to be already invested in the markets in order to receive that profit.

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So, back to the real world, minus any crazy stuff coming out of the White House.

In the short term, the S&P-500, as a proxy for the markets in general, is attempting to bottom and then move higher.  It just needs to get above the dashed green lines on this chart to suggest that the bull market has resumed. 

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The S&P-500 might still want to retest the 4800-ish area once more.  A retest wouldn’t be the end of the world since approximately 50% of all corrections normally include a retest.  Again, a “retest” means that the correction low is (approximately) hit twice, in a “W” shape, rather than the bottom being “V” shaped.  If a retest occurs, then the Fed might lower interest rates at their (Wednesday) May 7th meeting in two weeks, especially with inflation decreasing in the latest CPI & PPI reports, and this could have the effect of rocketing markets higher again.  If there is no attempted retest of 4800, then the Fed would have no reason to lower interest rates in May and they would likely wait until June.

Worst case scenario, if we get a “Trump Tariff Recession,” and I do not currently expect to see this, then the S&P-500 might want to very temporarily move down to 4500 before then rapidly moving higher.  This also wouldn’t be the end of the world and we would still have a chance to recover back toward 6000 by the end of this year, especially with the Federal Reserve then actively and aggressively lowering interest rates, which is very stimulative for the economy.

We are getting much closer to the end of this market correction.  We are in a normal correction that happens once every couple of years, but still within the confines of a SECULAR BULL MARKET THAT LIKELY WON’T END FOR ANOTHER 3.5 YEARS.

The market could go higher from here, or it could retest the April lows before then going higher.  The market is down today as I post this blog (faintly yellow vertical highlighted line to right) because Trump spent the Easter weekend droning on and on about trying to find a way to fire Fed Chairman Jerome Powell, which he legally cannot do even though he is the one that originally put Powell in as Fed Chairman.  Actually, Trump is setting up the sales-pitch that any further downside will be caused by Powell’s reluctance to lower interest rates (in the face of low but now increasing inflation).

Note, there is a chance that the S&P-500 holds at the 5100 level.

Short term technical analysis… chart posted at 10:30 AM EST on April 21st, 2025:

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That big two day drop shown above (and red dot, far right below) when viewed through the lens of history, reveals that a big downward drop like we recently experienced has always led to giant bull market gains.  (Chart courtesy of Bespoke)

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And the (S&P-500) pullback to 4800 touched the exact bottom of the intermediate term (arithmetic) bullish trend channel before bouncing higher again.  (I originally drew this red dashed line back in 2022 which was 2.5 years ago.)

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And we remain well within the boundaries of the secular trend channel, which is very bullish longer term.  I still believe that we will follow the purple dashed line higher…  and I still expect this bull market to go to astronomical levels before it ultimately ends in a debt-fueled inflationary crash several years from now.  My goal is to make any crash highly profitable for MarketCycle’s clients.  We made a fortune during the giant bear markets of 2000 and again in 2008.  Crashes can be much more profitable than bull markets.

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Regardless, in the very long term, and despite any bear markets and crashes, stocks go up and up and up and up.  Over the very long term, owning stocks is a no-lose proposition.  The dark blue line shows the past 200-year profit line for anyone owning the U.S. stock market.

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Currently, investor sentiment is so fearful that it is now extremely bullish.  Extreme fear indicates that everyone has already sold and only buyers are left.  (Chart courtesy of Bloomberg Research)

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The stock market (blue line) will eventually follow the bullish “smart investors” (green line) who are now actively buying stocks.  (Chart courtesy of Jim Paulsen)

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It is highly unusual that interest rates (green line) would move higher while the USDollar (blue line) is falling.  This indicates that foreigners are already tired of Trump’s chaos & confusion and they are taking their money and going home.  (Chart courtesy of Standard Chartered Research)

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Foreign ownership of U.S. bonds and stocks has plummeted and the U.S. was temporarily damaged by this.  (Chart courtesy of DataStream)

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The money that has been removed from the United States has moved to other countries.  MarketCycle also moved some U.S. funds in client accounts to other developed market countries and held in the Euro.  (Chart courtesy of Goldman Sachs)

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And a lot of money has moved into gold.  MarketCycle’s highest allocated individual asset has been gold for several years now.  Most advisories and institutions and hedge funds do not hold gold, and I don’t understand why.  I made a 1000% gain via 2x gold from 2001 to 2011 before selling and waiting for the next gold bull market which MarketCycle caught with perfect execution.  In my opinion, gold will reach incredibly high levels by the late 2030’s… I mean REALLY high levels.  MarketCycle’s client accounts own actual gold bullion safely held in the vaults of the Royal Canadian Mint, where we get tremendous tax savings if we ever sell and we can take physical possession of the gold during an emergency.

Central Banks, such as the Federal Reserve, must know something because they are hoarding physical gold at an almost parabolic pace. (Chart courtesy of Yardeni Research)

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SUMMARY:  MarketCycle is still bullish.  The market has likely bottomed, barring any incredibly dumb proclamations by our leader.  Most of us have grown tired of the chaos & confusion, but the market is becoming numb to the noise and the market will soon ignore it and move higher, likely at the same time that Trump also grows tired of all of this.  

Strength is being found in smaller utilities and momentum consumer staples; both are defensive sectors and are mostly non-tariff.  Healthcare stocks are showing some strength, but not as much as the Wall Street hype would suggest.  Crypto is showing renewed strength and it broke above overhead resistance just this morning.  Private credit is still strong.  Big bank stocks are not affected by tariffs and they are showing strong relative strength.  Small and mid-cap innovative technology is showing renewed strength and they are less affected by tariffs.  Big tech is not yet showing outsized strength, but when they do, they are likely to really pop higher.  Gold just keeps getting stronger and it is way up today.  As mentioned above, developed market stocks now are showing strength and going forward, investment accounts may want to hold as much as 15% in developed market stocks held in Euros (EUR), particularly in a developed-market-growth ETF.  United States stocks will still rule supreme over the longer term, regardless of what I wrote above.  We have to remember that getting above the two green dashed lines on the short-term chart (above) is of the utmost importance for the continuation of the bull market.

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So, the Report of Findings:  The patient has a minor injury that will “self-heal.”

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“You will remember these troubles as no more than waters that have flowed by during the night.”    Job 11:16

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Thanks for reading!

MarketCycle is in the business of managing your investment account.  We try hard to earn our keep.  The process is easy.  There is a contact tab at the top of our website; it costs nothing to talk.

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MARKET CYCLE  —  TREND FOLLOWING  —  RELATIVE STRENGTH  —  HEDGE FUNDS  —  

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It’s a brave new world and I’ve been fiddling around with using artificial intelligence programs.  When ChatGPT, the popular artificial intelligence, was asked to explain what a market correction is… this is the answer that it gave (but I had to fix its grammar):

MARKET CORRECTIONS PREVENT MARKET BUBBLES

• When stock prices rise too quickly, they can become detached from fundamentals (earnings, revenue, economic conditions).
• Corrections help to deflate excessive speculation before it turns into a full-blown bubble and subsequent crash.

THEY SHAKE OUT WEAK HANDS

• Corrections often drive out short-term speculators who may have entered the market for quick gains.
• This allows long-term investors to buy quality stocks at better prices.

THEY PROVIDE BUYING OPPORTUNITIES

• Many investors view corrections as a chance to buy fundamentally strong stocks at a discount.
• For long-term investors, buying during downturns can improve portfolio returns over time.

THEY HELP RESTORE MARKET BALANCE

• Stock prices can become overextended due to investor optimism or momentum-driven trading.
• Corrections help reset valuations closer to fair value.

THEY ARE A NATURAL PART OF MARKET CYCLES

• Historically, the stock market experiences a correction of 10-19% roughly once every 12-18 months.
• While they may feel unsettling, they are expected; corrections do not necessarily indicate a prolonged bear market.
• Corrections play a crucial role in maintaining a healthy, functioning market.

THEY REINFORCE INVESTMENT DISCIPLINE

• Investors who stay disciplined during corrections (rather than panic selling) often see long-term gains.
• Corrections serve as a reminder to maintain a diversified portfolio and to stick to a well thought out plan.
• Long-term investors who stay focused on fundamentals, rather than short-term price movements, are usually rewarded over time.

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I’d like to personally thank ChatGPT for that since s/he somehow seems to be alive.  And I’d like to close with this chart that shows the pullback frequency that we should learn to expect throughout our entire investing life… and yet the stock market still has a distinct & strong upward bias. (Chart courtesy of NDR Research):

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How does the stock market respond AFTER the correction bottom?  This final chart shows the historical percent of profits 3, 6 and 12 months after the correction bottom; complete recovery of all losses within two months (or less) and then ongoing profit gains over the next 10+ months.  (Chart courtesy of LPL Research):

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That’s it… thanks for reading!  Sorry, but no correction details this month as we are reserving this information for clients only via our regularly emailed MarketCycle Updates.

MarketCycle manages investor’s portfolios.  The process is easy and affordable.  There is a contact tab at the top of our website.

Our paid subscriber service, The REPORT, can be reached via the link on this website.

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MARKET CYCLE  —  HEDGE FUND  —  TREND FOLLOWING  —  RELATIVE STRENGTH  —  INVESTMENT MANAGEMENT