The #1 most reliable guide to winning in the stock market is "Don't Fight The Fed!".
Since almost every Fed Governor and almost every Fed President are standing firmly in line behind Fed Chairman Powell's current hawkish stance on monetary policy, we should therefore be out of U.S. stocks now!
RIGHT?
WRONG!!
It is my strong view right now that the Fed is about to "pause" in its self-proclaimed path to higher short term interest rates, and that except for the possibility of one last 1/4 point hike, the next multiple change in short term interest rates will be to the downside.
BIG money in stocks is made when you can see the next major turn in Fed policy, especially if that change is "imminent" and not well discounted by investors. Imminent is defined as 6 months or less.
The Fed is now looking for overwhelming evidence of "disinflation" before pausing in its path to higher rates. However, almost all the economic data that I am looking at right now reflects actual "deflation" year-over-year.
If this is true, then U.S. Government's reported inflation indicators are actually lagging real world data and they will soon catch up! And when they do, U.S. stock prices will soar (in response to a major reversal in the Fed's monetary policy from hawkish to dovish)!!
Bottom line: It's time to jump on the Northbound train in U.S. stocks!
And it's time to expand holdings of precious metals mining stocks!!
