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^ON-TAP

🌟You Sunday Rundown🌟

• 🚨 The Threat of a Reverse Market Crash!

• 🗳️ 2024 Election Prediction 📊🔮

• 📈 Stock Picks 💼

^{MACRO-ECONOMIC INSIGHTS}

Understanding the Threat of a Reverse Market Crash

In the world of finance, where optimism often prevails, the concept of a reverse market crash lurks in the shadows, presenting a potential economic nightmare. Let us unravel the intricacies of what a reverse market crash entails, why it could be a real and detrimental possibility, and why the prevailing belief that lowering interest rates will have a cure-all effect might be a dangerous oversimplification.

What is a Reverse Market Crash:

A reverse market crash is not your typical financial downturn; instead of a standard market crash where you have an abrupt decline in equities like the Great Depression, it’s the opposite. Equities, real estate, and equivalent capital markets surge to the upside in value.

The Danger of Unchecked Bullish Sentiments:

In the face of such a scenario, understanding the role of psychology in market dynamics is essential. Today, despite houses selling for double their normal prices, people still buy real estate. Though $NVDA is a fantastic company during a recession and a time in history where interest rates are 7%, housing affordability is low, the cost of general life expenses is at its highest, and the general view of inflation, we believe $500/ share is a bit overvalued. The point is that the American people don’t seem to care much, or at least the media makes it seem like most of the USA is bullish on assets.

Think of the psychology of the world. If we are bullish now when the economy and Federal Reserve have given us every reason not to be, what happens when we actually get something to be bullish about? Do we become bullish on steroids? How does demand increase when the price is already at all-time highs? How do we save if expenses go higher but interest rates on our savings accounts go lower?

Making sense?

Why Lowering Rates May Not Be The Answer.

The belief that lowering interest rates will magically restore normalcy is trending. However, this optimism is a fragile construct built on the psychology of the masses.

The common narrative suggests that if interest rates are lowered, the housing market will rebound, stocks will surge, and all will return to normal. Yet, the reality is far more complex. Market behaviors are deeply entwined with the psychology of investors. Lowering rates may indeed fuel bullish sentiments, but it also drives prices higher. The demand grows, creating an illusion of prosperity, while in reality, it widens the wealth gap.

Powell's Dilemma:

In our opinion, Federal Reserve Chairman Jerome Powell faces a delicate and difficult task. While conventional wisdom might advocate for rate cuts to stimulate the economy, the reality is more complicated. Powell must carefully consider the potential consequences – an inflated market, soaring prices, and an ever-widening wealth gap. Perhaps, instead of lowering rates, holding them steady or even considering an increase could be the antidote to stabilizing a ballooning economic bubble.

How Do We Grow Wealth During This Nonsense?

Our long-term readers know we believe in having multiple investing accounts with different risk levels. This includes a typical Roth IRA or equivalent with REITs, index funds, and gold and a separate account for buying specific equities. As an investor, engaging in swing trading and hedging during a market cycle can be helpful. Other great options are dividend stocks, assuming you have the capital to expand.

The key is diversification, not just in the companies you invest in but where you place your money. For example, during a bullish trend, keeping 90% of your investments in the S&P 500 is great. However, when the future becomes uncertain, it's wise to take advantage of a savings account with a 5% interest rate or allocate 10% of your cash to dividend-paying stocks that perform well during a recession. By minimizing risk, you can still benefit from growth while limiting potential losses.

Choosing the Economic Savior: A Pivotal Theme in the Next Presidential Election

Both Republicans and Democrats are changing their views on economic issues because people want practical solutions. People want the economy to improve, have more money, and lower prices. They want a leader who can fix the country's financial problems.

The president can't fix everything, but they can influence policies and inspire confidence. There are two main promises being made: one is about being responsible with money, creating jobs, and sharing wealth fairly, and the other is about lowering taxes, helping businesses grow, and letting the free market work.

Voters are struggling with economic hardship and looking for a leader to help. The election is not just about political parties but about who can bring back a strong economy, Trump or no Trump.

We are not here to talk about which party is correct or not. In all honesty, WE DO NOT CARE who you vote for. The fact is whoever wins, let's pay it works out.

^Stocks

Stocks On Radar 🎯

$PLTR

We were long-term buyers and added this at $14, given in our newsletter and again in the trade alert group. Dips may be supported near $15.30. This a great swing level, and from an investor's perspective, $15 is a good entry for the promising future of this company.

As an investor in this company, it’s psychologically tough to be bearish. Though, we preach preparedness. I would not short this company, but in terms of adding additional shares, if $15 starts to act as mid-term resistance, then our next area of value is near $8.

$TSLA

Shorter timeframe: As long as 220-225 holds, we may trade higher into 250-260s. Mid-term 250-60 could act as hard resistance ‘if’ we get there. On the contrary, regarding the shorter time frame, if 220-225 slips and becomes resistance, we could see 200, then 170.

If a bearish trend develops, it wouldn't surprise us to see 220 slip or resistance near 250 to continue the similar trend from the last year or so.

 $AMZN

We would be interested in an equity swing with $AMZN near 125-129 (if this trades), with our stop loss being on a daily close to under 120. Our upside target would be 170.

Weekly E-mini Levels

If we continue to hold 4500-4510, with 4480 being an extension, then we could trade up to 4480. If you are bearish, it would be best to see a few closes under 4480, which is challenging since it is a short week or a rejection near 4600 this week or the next.