If They Idiot-Proof This Market, Someone Will Make a Better Idiot

[] The markets rebounded as we moved deeper into earnings season. Investors have been speculating that we could see a strong Bear market rally. [View in browser]( [View in browser]( [] [Godesburg's Haven Investment Letter]( [] [Godesburg's Haven Investment Letter]( [] [Garrett Pic] Market momentum is Green. The S&P 500 held above its test line today at 3,700. The bulls held after solid earnings from Goldman Sachs (GS). But the aftermarket is very bullish, following great numbers from Netflix (NFLX) and United Airlines (UAL). Can we now push to the 3,800 level or higher? Dear Investor, Now comes the part in the market show where I remind everyone of the obvious: The economy is not the market - and the market is not the economy. Last Thursday, a cartoonish drop happened after we learned that the Consumer Price Index came in higher than expectations. The 3,500 level for the S&P 500 became a strong rally point for buyers - and a profit-taking point for individuals that have shorted this market since the index hit its 200-day moving average in August. While the bottom likely isn’t in - this latest round of earnings can fuel additional short covering and buying among funds and retail investors. I closed my last short position - a hedge trade on an Inverse QQQ ETF (PSQ) early Monday morning. That was frustrating - as I’d turned a 45% gain into a 20% loss by holding over the weekend. But I was able to make up for it by trading those improving sectors in energy, utilities, and financials. I expected this market to break down in the final hour on Tuesday. That would repeat the short-term pop we witnessed on October 3-4. But as the 4:15 tick came for options trading to end on index ETFs, late bullishness emerged. Momentum is gaining steam. This could be a fantastic 10-day run. The Bear Market Rally is On After the bell, Netflix (NFLX) reported. After a horrifying downturn earlier this year, Netflix is now on the move. Shares popped more than 15% this afternoon. The company has added 2.41 million new subscribers. Then United Airlines (UAL) reported stronger-than-expected earnings. Both are critical. These are consumer-demand-driven earnings reports. Americans are still prioritizing streaming channels - and they’re still willing to pay more for the right to watch dramatic retellings of Jeffrey Dahmer. (I don’t get this at all…) Meanwhile, travel looks robust. Even though airfare is rising, Americans are still traveling. This isn’t surprising to me. But, unfortunately, this trend can continue until it stops. Politicians and Federal Reserve members can’t grasp where all this inflation comes from. Remember that Americans still have a lot of money left over from the COVID stimulus cycle. Also, keep in mind that wages continue to rise. But also keep this in mind. The Fed Funds rate is 3.0%. The Consumer Price Index sits at 8.2%. That means that the real interest rate in America sits at NEGATIVE -5.2%. Think about this for a moment. When all of those central banks in Europe set their Funds rate in negative territory - they did so to push consumers to take money out of the bank and spend it. You get the same result here when the Fed rate is below inflation. So - don’t be surprised to see Americans buying and spending. They recognize that their money today is worth more than it will be in the future. Eventually - this bleeds over into credit - which continues to swell among consumers. It can continue until it stops. Until there is a credit bubble. This makes me increasingly bullish on the SPDR S&P 500 Retail ETF (XRT). I may also look at trading calls or call spreads on Abercrombie & Fitch (ANF) tomorrow. This stock has traded well in positive momentum conditions - and could rally to $20.00 per share if capital continues to flow into the market. Finally As I noted, this level of consumer spending can continue as long as it can… And then things could go wrong. The President is now pushing lots of student loan forgiveness. This will - obviously - create new money entering the system. Student loan forgiveness is - by definition - inflationary. Meanwhile, we’re granting an 8.7% increase in COLA standards next year for 70 million people around social security. All of that money is inflationary. But while all this is happening, the average worker is seeing their real wages decline. I just read this and wanted to share it with you. Real wages for Americans against inflation have now fallen for 18 consecutive months. This is one reason I believe we have not seen a bottom yet. Enjoy your day, [Garrett signature] Garrett {NAME} [] [Garrett Pic] Market momentum is Green. The S&P 500 held above its test line today at 3,700. The bulls held after solid earnings from Goldman Sachs (GS). But the aftermarket is very bullish, following great numbers from Netflix (NFLX) and United Airlines (UAL). Can we now push to the 3,800 level or higher? Dear Investor, Now comes the part in the market show where I remind everyone of the obvious: The economy is not the market - and the market is not the economy. Last Thursday, a cartoonish drop happened after we learned that the Consumer Price Index came in higher than expectations. The 3,500 level for the S&P 500 became a strong rally point for buyers - and a profit-taking point for individuals that have shorted this market since the index hit its 200-day moving average in August. While the bottom likely isn’t in - this latest round of earnings can fuel additional short covering and buying among funds and retail investors. I closed my last short position - a hedge trade on an Inverse QQQ ETF (PSQ) early Monday morning. That was frustrating - as I’d turned a 45% gain into a 20% loss by holding over the weekend. But I was able to make up for it by trading those improving sectors in energy, utilities, and financials. I expected this market to break down in the final hour on Tuesday. That would repeat the short-term pop we witnessed on October 3-4. But as the 4:15 tick came for options trading to end on index ETFs, late bullishness emerged. Momentum is gaining steam. This could be a fantastic 10-day run. The Bear Market Rally is On After the bell, Netflix (NFLX) reported. After a horrifying downturn earlier this year, Netflix is now on the move. Shares popped more than 15% this afternoon. The company has added 2.41 million new subscribers. Then United Airlines (UAL) reported stronger-than-expected earnings. Both are critical. These are consumer-demand-driven earnings reports. Americans are still prioritizing streaming channels - and they’re still willing to pay more for the right to watch dramatic retellings of Jeffrey Dahmer. (I don’t get this at all…) Meanwhile, travel looks robust. Even though airfare is rising, Americans are still traveling. This isn’t surprising to me. But, unfortunately, this trend can continue until it stops. Politicians and Federal Reserve members can’t grasp where all this inflation comes from. Remember that Americans still have a lot of money left over from the COVID stimulus cycle. Also, keep in mind that wages continue to rise. But also keep this in mind. The Fed Funds rate is 3.0%. The Consumer Price Index sits at 8.2%. That means that the real interest rate in America sits at NEGATIVE -5.2%. Think about this for a moment. When all of those central banks in Europe set their Funds rate in negative territory - they did so to push consumers to take money out of the bank and spend it. You get the same result here when the Fed rate is below inflation. So - don’t be surprised to see Americans buying and spending. They recognize that their money today is worth more than it will be in the future. Eventually - this bleeds over into credit - which continues to swell among consumers. It can continue until it stops. Until there is a credit bubble. This makes me increasingly bullish on the SPDR S&P 500 Retail ETF (XRT). I may also look at trading calls or call spreads on Abercrombie & Fitch (ANF) tomorrow. This stock has traded well in positive momentum conditions - and could rally to $20.00 per share if capital continues to flow into the market. Finally As I noted, this level of consumer spending can continue as long as it can… And then things could go wrong. The President is now pushing lots of student loan forgiveness. This will - obviously - create new money entering the system. Student loan forgiveness is - by definition - inflationary. Meanwhile, we’re granting an 8.7% increase in COLA standards next year for 70 million people around social security. All of that money is inflationary. But while all this is happening, the average worker is seeing their real wages decline. I just read this and wanted to share it with you. Real wages for Americans against inflation have now fallen for 18 consecutive months. This is one reason I believe we have not seen a bottom yet. Enjoy your day, [Garrett signature] Garrett {NAME} [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information please visit [our disclaimer page here](. [] Sent to: {EMAIL} [UNSUBSCRIBE]( [] © 2022 Godesburg Financial Publishing, Inc. DISCLAIMER: COMMUNICATIONS FROM GODESBURG FINANCIAL PUBLISHING (GFP) ARE FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY – NOT INVESTMENT ADVICE: GFP and all the services it offers are for educational and informational purposes only and should NOT be understood to be securities-related offers or solicitations. None of GFP’s communications should be considered or used as personalized investment advice. GFP recommends that you speak with a licensed professional before making any investment decision. RESULTS PRESENTED ARE NOT NECCESSARILY TYPICAL OR VERIFIED: GFP communications may include information regarding the historical trading performance of gurus in their services (all verified by a third party), as well as testimonials of non-employees depicting profitable investments and trades that are believed to be true based on the representations of the persons providing the testimonial of their own free will. Please be aware that the claims regarding investing or trading results of non-employees are not tracked by GFP nor can they be verified. As always, past performance is not necessarily indicative of future results. Therefore, results presented in this email should NOT be considered TYPICAL. Actual results can and will vary based on everything from experience, ability, risk mitigation practices, and market volatility... to the amount of money exposed in the investment or trade. Investing and trading are speculative and carry serious risk. You may lose some, all - or possibly more - than your original investment or trade. GODESBURG FINANCIAL PUBLISHING IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER: GFP, including its owners and employees, are NOT registered as securities broker-dealers, brokers, or any sort of registered investment advisors with the U.S. Securities and Exchange Commission, any state securities regulatory authorities, or any self-regulatory organizations. GODESBURG FINANCIAL PUBLISHING EMPLOYEES MAY HOLD SECURITIES DISCUSSED: If a writer holds any securities in a communication, it will be disclosed along with the information on the potential investment or trade. HIR, its owners or employees, have not been - or ever will be - paid by the issuer of a security mentioned in our services or communications. GFP, its owners and employees are paid entirely or in part from commissions based on sales of their services to subscribers. For more information please visit [our disclaimer page here](. 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