Banks Fold, Tech Holds

The beaten-down stocks heading higher… [Morning Reckoning] March 21, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Banks Fold, Tech Holds Baltimore, Maryland March 21, 2023 [Greg Guenthner] GREG GUENTHNER Good Morning Reader, Investors are obsessed with this bear market. Everyone wants to know when it will officially end and when they can go back to blindly buying stocks. They’re distracted by every possible piece of bearish news. Once-ignored economic numbers are now the focus of tedious news reports, leading to wild intraday price action as traders jockey for position. Throw a fresh bank crisis in the mix, and we’re left with a choppy mess – and more than a few confused market watchers. Banks are failing. The financial news is more bearish than ever. Plus, we have to deal with the Fed this week… again. While the market is currently expecting a 25 basis-point hike, investors will likely hang on Powell’s every word at tomorrow’s presser. They’ll grasp for any potential change in tone now that banks are on shaky ground. Will Jerome release the doves? Or, will he hold the line? Either way, the noise is just getting louder. Yet despite the endless string of issues facing this market, you can still find positive developments bubbling up under the surface of the major averages. You just have to know where to look… In early March, we were fixated on several key do-or-die levels for stocks. Yes, there’s still plenty that needs to go right before we can sound the all clear and ride the averages back to their highs. But several beaten down groups are beginning to perk up while the S&P chops along in no-man’s land. [Has World War III Just Begun?]( NATO sends tanks to Ukraine… Russia prepares for a winter offensive… [Is the beginning of World War III?]( [Click here to learn more]( I’ve just released an urgent message with my thoughts. But more importantly, I’m offering to send you an [exact playbook]( on what I see playing out in the world and what you need to do to prepare. [Simply click here now to watch my short message and to see how to claim a copy completely free of charge.]( [LEARN MORE]( Streaking Semiconductors The semis were dowside leaders in 2022. But we’ve discussed in detail how this important tech group snapped back to life in January. The VanEck Vectors Semiconductor ETF (SMH) jumped more than 20% to kick off 2023 in style. Where they go from here, we noted, would be incredibly important to the health of this market. It just so happened that as many tech snapback tech names fizzled in February, SMH remained stubbornly strong. No, most semiconductor stocks did not streak higher in February or early March. But they didn’t give back a huge chunk of those January gains – unlike many other tech names that became a little too hot to kick off the year. In fact, SMH posted the most constructive consolidation of the bunch. It was able to cling to those June and August 2022 pivot highs and set up another test of its year-to-date highs just above $250. That’s where it’s resting as I type. While many tech subsectors – and the Nasdaq Composite, for that matter – endured sharper pullbacks last month, semis are staying constructive and attempting to lead us out of this mess. [chart] We highlighted NVDA’s strong post-earnings performance as one of the key reasons SMH held steady during recent market weakness. Now, we can add another big name to the outperformer list as Advanced Micro Devices (AMD) broke out and streaked to new 7-month highs last week. Strength is spreading through the semis. A clean breakout here could lead to the next leg of this powerful rally. [Urgent Notice From Paradigm CIO Zach Scheidt!]( [Click here to learn more]( Hi, Zach Scheidt here… I’m the Chief Income Officer at Paradigm Press. With inflation raging (and showing no signs of coming to an end any time soon), almost everyone in America is feeling the pain in a big way. Which is why, several months ago, I set out on a big mission… my goal was to create a [complete, step-by-step plan to surviving and beating inflation]( one that anyone could take advantage of. Today, after hundreds of hours of research, I’m revealing all of my findings. [Simply click here now to see how to survive America’s deadly inflation crisis](. [LEARN MORE]( The Bitcoin Bulls are Back Remember Bitcoin $25,000? We’ve been sweating a $25K breakout ever since crypto began to consolidate its strong January rally. The idea is simple: If Bitcoin can hold a move above $25K, it would break free from its 2021-22 bear market and embark on a new uptrend. But it’s never that easy – especially when it comes to crypto. Bitcoin looked coiled and ready to break higher in February. Then, it proceeded to tumble toward $20K before sharply reversing and posting its “official” breakout move. After surviving yet another crypto gut-check, Bitcoin has exploded higher, topping $28K for the first time since June 2022. [chart] I’ve long argued that Bitcoin is a tech trade. If it walks like a tech stock and talks like a tech stock, it’s a tech stock! Crypto behaved exactly like the tech growth stocks during last year’s meltdown – and it rallied with them in January. Now, something a little different is happening. Bitcoin is hitting nine-month highs, while tech growth names are still stuck in neutral following their sharp January rallies. The Bitcoin faithful believe crypto is rallying because it’s a safe haven during the current bank turmoil. I’m not so sure. After all, this base breakout has been brewing since before we got the first whiff of Silicon Valley Bank going down in flames. Perhaps the recent turmoil is a good excuse for some buying here – but I don’t believe it’s the full story. Even so, we should continue to watch this relationship develop to see if we truly get a decoupling. So far, Bitcoin has built a formidable lead, with the tech-growth stocks in Cathie Wood’s Ark Innovation ETF (ARKK) falling woefully behind over the past couple weeks. Will Bitcoin drag its former bull market cousins back onto their feet? We’ll know soon enough. In the meantime, the crypto-adjacent stocks are going streaking. Despite the noisy market backdrop, the Bitcoin adjacent names are blasting off along with the red-hot semis. If you’re searching for strong momentum plays that aren’t flinching during the ongoing bank drama, this is where you should begin your search. Let me know what you thought of today’s article… and if you want any more topics covered by emailing me [here](mailto:feedback@dailyreckoning.com). Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com [Response Requested]( 1/1000th of an ounce of gold available As a Morning Reckoning reader, Jim Rickards is offering you 1/1000th of an ounce of gold when you upgrade your account. It will come in the form of a “Gold Back” - a new type of gold currency that’s starting to spread across America ([click here to view](. If you have not responded to Jim’s offer yet, and want to know how to claim yours… Please click the link below for details. [Click here to learn how to claim your new Gold Back Currency<]( Thanks! Amber Anderson Customer Service [LEARN MORE]( In Case You Missed It… Sean Ring, Editor The Moral Consequences of Hyper-Inflation Have Come Home to Roost [Sean Ring] SEAN RING Dear Reader, Happy Thursday from beautiful Northern Italy! There are times I wish I was unaware of what’s going on in the world. Especially since last Sunday. I won’t lie. The thought of Meghan and her ginger nut Prince becoming paupers lit me up like a Christmas tree. I was so excited to use this meme. It’s devastating that it’s no longer valid. It would’ve been so delicious. Ironic, even. And I lived in England long enough to understand irony. What happened with respect to SIVB and Signature Bank was idiotic economically. But in a much more important and real sense, it was immoral. In this Morning Reckoning, I’m putting in print part of one of my favorite speeches by a professor I wish I knew better. [Biden Just Signed Death Warrant On Your Freedom]( [Click here to learn more]( If Biden’s Executive Order 14067 comes to pass, a former advisor to the CIA and Pentagon is predicting legal government surveillance of all US citizens; total control over your bank accounts and purchases; and indefinite Democrat control past 2024. He says Covid was a trial run for how to control a population. Dems will use their “pandemic playbook” to silence any dissent. [Click here to see exactly what to do before it happens](. [LEARN MORE]( I’m No Priest, But… Professor Joseph Salerno of the Mises Institute gave a speech years ago about the moral breakdown of society in the face of inflation called “[Easy Money, Easy Morals]( I can’t encourage you enough to listen to the whole thing. It’s only 30 minutes, but if you play it at 2x speed, you’ll get done in 15 and lose none of the value. Professor Salerno gives a great account of Weimar Germany, which eerily mirrors what America is going through right now. Sure, there’s no hyperinflation yet. But the moral consequences have long been evident. Professor Salerno said: “At some point, people lose confidence in the value of the money. The price continues to rise at ever rapid rates, even more quickly than the government can print money up. So even in the middle of this massive inflation, people experienced a shortage of money. They didn't have enough money as much as they needed to buy goods and services. It destroyed people's bank deposits and pensions. If someone had a pre-war pension of 200 marks per month, which was very comfortable, they couldn't even buy a meal by 1920. Workers didn't want to hold money for a week. So they began to demand to get paid three times a week, and then every day, and then three times a day, and had their fiancés and wives at the factory gates to get the new money, rush out to buy things as quickly as possible. Teachers and professors, who were traditionally paid monthly in Germany quit their jobs, because if you had to wait a month for your income, that income was worth 1,000,000th of what it was worth prior. So they quit their jobs and became taxi drivers and waiters. Farmers refused to pay you to sell you an egg, even for a whole wheelbarrow full of marks. Those people that were able to get the new marks as they were printed up by the banks were the ones that benefited. They got it before the prices rose. And they spent it… they bought up hotels, they bought up land. You had so-called joint ventures in Germany, which put together coals, banks, hotels, electricity. These were not very productive and, and in fact, collapsed. They were put together by paper money. On the other hand, this was based on the looting of the savings of the people on pensions who had no access to this new money right away. The middle class were getting paid every two weeks or every month. So you had this nouveau riche, these newly rich that began to rush out and, and spend the new money, because they knew it was going to depreciate, on ostentatious examples of conspicuous consumption. Who were the victims? The middle class, the small businesses, the pensioners… they were all wiped out. And what about the effects on moral values? Obviously, it no longer paid to be thrifty and to save for your future and your child's future. So, thrift, such an important value in the capitalist economy, went by the board. People no longer carefully planned their investments. They simply bought anything because they felt that the prices were going up the next day. So people no longer look to the future. They suddenly became very interested in immediate gratification to get anything and get it now. Productive work was discouraged because most people had left the factories and spent all their time hunting for bargains, trying to get rid of their marks. Even sexual morals changed. Women's dowries were wiped out. Now, you laugh about that, but dowry had a very important function in the old culture. It was a way of signaling to a prospective suitor that the woman's family was virtuous, had thrift, they worked hard, had family commitments to one another. Now, the women became discouraged of ever accumulating dowries in the future and ran off with their boyfriends. And the term boyfriend was not used in polite society in Germany in the 1920s! Prior to the hyperinflation, it was a scandal for an unmarried middle-class girl to have a “boyfriend.” Everybody sought after this ostentation, this luxury. And that replaced the goal of having a good and solid family name… Of being sober in your investments. And finally, the people who were looked up to are the unscrupulous gamblers and profiteers who now got to the top of the social structure, where the old families and the old wealthy who worked hard and were good examples to the rest of the populace, were now at the bottom. Now, there is a direct link between inflation and the breakdown of morality, an even more direct link. Let me just explain it in the following way. By bringing about a thoroughgoing social revolution, it really does destroy the middle class and the productive rich. But by destroying money itself, it destroys everyone's ability to plan for the future and leaves them no recourse, but to seek immediate gratification. Moreover, whether we like it or not, men and women live in a world where they cannot live or flourish physically and spiritually without property. But remember, property is not merely a collection of material things. It refers to those things that are judged valuable in serving human wants and desires. But in the modern world, you can never know what the value of property is in a specialized economy of mass production unless you know its money value. So in a real sense, valuable property is an extension and a definition of an individual's very personality.” [“Biden Blackouts” coming this winter?]( [Click here to learn more]( A former advisor to the CIA and Pentagon just made this dark prediction: Calamity Joe’s sabotage of the Nord Stream pipeline [His Evidence Here]( was suicide. In the next 75 days, Americans will face fuel shortages… …widespread blackouts… …empty grocery shelves… …up to $1000 energy bills… …drained retirement accounts, and… …a massive crime wave. This former CIA advisor says most Americans will suffer this winter. But a few will WIN big from the turmoil. [Here’s how to be one of them](. [LEARN MORE]( Oh, The Realization I know what you were doing while you read that speech. In your head, you thought about your dwindling purchasing power. And that’s despite having more money in your bank account than you may have ever had before. You now see why smart people have abandoned noble causes (like teaching) for worthless, but higher paying roles like “influencer.” You visualized today’s nouveau riche, with their Birkin bags and Cartier bracelets. Fear of Missing Out (FOMO) is now a hasty, but understandable way of investing in cryptocurrencies and NFTs. Broke, but shapely young women getting their funbags out on Only Fans suddenly makes perfect economic sense. And those who merely show a bit of skin on Instagram are saints by comparison. And worst of all, you know exactly who those unscrupulous gamblers and profiteers are. They’re people you formerly admired and respected. Venture capitalists, investment bankers, corporate lawyers, former House speakers, and now, entrepreneurs with the right bank accounts. But don’t take my word, or even the good professor’s. Have a look at this: [tweet] This era’s story – like Weimar Germany’s – is all about inflation and the way it distorts incentives. Before you go, let me disabuse you of one notion. You can’t save everyone. We’re far past that point. But you can save yourself, as my colleagues and I have written many times before. Concentrate on that. Head to the [Daily Reckoning]( to catch up on the ways to get ahead of what’s coming. And if you didn’t read the Rude this morning, my good friend and colleague Byron King talks to you about real deposit insurance: the rock-solid kind. He’ll show you why “pounds in the ground” are far superior to “Biden Bucks.” Until next week, take care. Let me know what you think of these recent events and how they’re affecting you and your faith in the system by emailing me [here](mailto:feedback@dailyreckoning.com), I’d love to hear your thoughts. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Greg Guenthner] [Greg Guenthner, CMT,]( is chief strategist at Forge Research Group. He has spent the better part of the past two decades developing long-term and short-term strategies with a single goal in mind: to help everyday investors generate outstanding returns and control their financial futures. Greg’s charts, analysis, and insights have appeared in Marketwatch, Forbes, Yahoo Finance, and many other financial publications. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. Please read our [Privacy Statement.]( If you are having trouble receiving your The Daily Reckoning subscription, you can ensure its arrival in your mailbox by [whitelisting The Daily Reckoning.](