I hope you’ve had a great week. Today’s note will be a little shorter than usual given all the exciting stuff we’ve been working on here at the Academy in the past few days. One of these was of course our brand new monthly Checklist Report for October which our Trading Club members received on Wednesday. There’s been a whole lot to discuss given the many setups and major shifts in the investment landscape that we are monitoring closely.
Whilst I cannot possibly share them all here with you today, I hope to offer some further insights in my next few posts once our paying Trading Club members have had first access to the information (of course, if you wish to gain immediate access to this week’s video, plus our latest monthly Checklist Report, head to the sign-up page to become a member today).
The one thing I want to get across today, regardless of which side of the paywall you sit on, is the downturn in our Business Cycle Checklist this month - which has turned negative for the first time in 13 years (to the month, coincidentally). There’
Looking at the S&P 500 Index, you could easily be mistaken for assuming that everything is fine in the world...
…but as you can see below, looking at the two previous negative signals that triggered in late 2000 and 2006, a negative Checklist score is not to be ignored.
From September 2006, to the eventual bottom in March 2009, the S&P 500 incurred a drawdown of almost -50%. Notably, it did first continue to rise for around 12 months, but even with a higher base this drawdown would have devastated your account.
And from October 2000, the market was in an immediate free fall, eventually bottoming two years later with a similar 40-50% drawdown.
This is just one of the ideas that we have been looking at this month, based on our professional trading methodology and market intel that Lex and I employ as fund managers, and share exclusively with Trading Club members.
So what will you do based on this information? Can you afford to ignore it? Or will you take your chances and hope for Central Banks to step in with further QE to save the day? Whatever you decide, with our process you will undoubtedly be better informed than 99.9% of retail traders (and frankly, many professionals). Join us at the Academy to become a member of our Trading Club, and learn from Lex himself with our Million Dollar Traders Online Course.
Have a great weekend,
James Helliwell | Chief Investment Strategist