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Created on: 2/2/2020 2:23:53 PM Last Update: 2/2/2020 7:37:53 PM Posted by: RTT
WARNING: This entry is 2262 days old. It may contain broken links, out-dated or misleading content. Please read on with caution.
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Dow Jones Utility index could trade like the FANGs
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 The world is changing because the US FED is considering capping the US 10 yr interest rate under the US inflation rate, or negative real interest rates forever. Further massive destruction of the US dollar purchasing power.
Previous Post: Formula for when the great stock market rally ends
In the previous post this blog said:
When valuations for the boring water company or the boring electric company is trading like your Facebook, Apple, Amazon or Netflix or Google (ie FANG) you know something is wrong.
This is when a seriously over valued market is screaming at you.
Of course the reader must understand in a world where money printing goes super nuts (Zimbabwe style) the stock market may go hyper inflationary and picking a time frame for a top is never a good idea, but we are not there yet. There is no Ben Bernanke helicopter money to the masses yet (ie MMT).
We may be there, 'helicopter money lite'. If the intention is to cap interest rates under inflation, this is a form of massive easy money (or easy debt).
Of course the effect of negative real interest rates is the US 10 yr is now broken because it does not protect you from inflation, this is interest rates suppression, or fake. The US FED has enacted this policy before, during WW2, are we in WW3? No. Yet the debt levels as a percentage of GDP suggest we are. Crazy.
This means investors will hunt for a UST 10 yr alternative, hence utility stocks with their high dividends will attract a lot more investor interest. Yes a water company may go to a P/E of 40.
This means demand for quality utility stocks around the world will be strong, and if the US dollar falls, utility stock in other parts of the world will be attractive.
A good place to hunt for Wyckoff, cycles and Gann angles.
Long term channels
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Close up of the above chart.
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Of course nothing moves in a straight line, corrections of 10% to 20% along the way are likely.
NOTE: Posts here are the lite version, more depth on each subject can be found via our RTT Plus membership.
Changes in the world is the source of all market moves, to catch and ride the change we believe a combination
of Gann Angles,
Cycles,
Wyckoff and
Ney logic
is the best way to ride the change, after all these methods have been used successfully for 70+ years.
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Investing Quote...
..“The only way you get a real education in the market is to invest cash, track your trade, and study your mistakes…. The examination of a losing trade is tortuous but necessary to ensure that it will not happen again.”..
Jesse Livermore
.."There is only one way to kill capitalism - by taxes, taxes, and more taxes"..
Karl Marx
.."What greater wealth is there than to own your own life and spend it on growing"..
Ayn Rand
.."The financial markets generally are unpredictable. So that one has to have different scenarios... The idea that you can actually predict what's going to happen contradicts my way of looking at the market."..
George Soros
...“People somehow think you must buy at the bottom and sell at the top to be successful in the market. That’s nonsense! The idea is to buy when the probability is greatest that the market is going to advance”...
Martin Zweig (The inspiration behind a number of Martin Zweig’s methods came, from Jesse Livermore).
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We at readtheticker.com hold the view that a mix of stock chart technical analysis, Richard Wyckoff, William Gann and Jim Hurst methods plus market fundamentals allows the investor to formulate a very sound market opinion. These attributes are mutually inclusive and must be weighted equally before investing or trading in any Stock, ETF, Currency, Bond, Commodity, CFD or Mutual Fund
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