Jim: Hello Adam and thanks for joining us. In summary, what’s the market doing currently and why?
Adam: As always, my pleasure. The market is acting great right now. In 2013, the S&P 500 vaulted a very impressive 30%. Then pulled back in January-early Feb to digest that move. At its lowest point, the S&P 500 only fell 6% from its record high which is completely normal and healthy during a strong uptrend. After that pullback, buyers showed up and sent prices right back to hold highs, and in some cases- to new highs. The action right now is very healthy in all three timeframes: Short, Intermediate, & Long.
Jim: And so The Fed is shouting loud and clear that they are steadily scaling back their efforts to support the market with printing money to buy bonds. Based on what you’ve seen in the numbers, is the market ready to stand on its own two feet now?
Adam: Eventually, yes. But not yet and that is why the Fed is still printing $65/b a month to help stimulate the economy. It is important to keep in mind that all the Fed stimulus takes time before Main Street reacts. Right now, we have seen Wall Street soar to new record highs and Main Street is following suit, just at a slightly slower growth rate. It is important to note that the US economy is the largest its ever been in history and is still growing, albeit at a slightly slower rate than people want. Most people do not talk about this fact and instead focus on the negative outliers. Overall both Main St & Wall Street are doing well. It just takes time for people to “feel” euphoric again. It takes time for the psychological wounds to heel from the vicious 2008 financial crisis. But in the process there is a lot of money to be made and those that pay attention are making it. In fact, for Midas Wave Alert Members. Every stock in their portfolio is up and every stock is up double digits. In fact, three of MWA’s stocks all gapped up after reporting earnings and are now up 38%, 29%, and 17%, respectively from when the alert was first published!
Jim: Any black swans out there that could affect what you see as on ongoing uptrend?
Adam: That is always possible but they have to emerge first and as we previously mentioned, significant market tops take time to develop so you can speculate all you want on the potential threats out there. But until the market starts to show signs of weakness, it deserves the bullish benefit of the doubt. A large concern is China. For years, China has been the primary growth engine of the global economy and is now beginning to show signs of weakness…or a slow down. That may become a major theme for 2014. Earlier today, Bloomberg reported: “China HSBC Manufacturing PMI for February came in below expectations and at levels indicative of contraction. This follows import and export data that was better than expected, but led some analysts to comment that it was possible Chinese companies were over invoicing in order to mask a slowdown. Today’s PMI reading could add credence to the risk of further slowdown in the Chinese economy.” So we continue to analyze all the data but remeber that the market always knows best.
Jim: So what do you see as the biggest opportunities moving forward?
Adam: The best and specific opportunities are provided to Midas Wave Alert Members in real-time. Generally speaking, the financials (XLF), biotechs (IBB), Healthcare (XLV), and tech stocks (QQQ) are all well positioned to capitalize on continued growth in the global economy and an aging population. Keep in mind that as all the baby boomers retire, they will need health care- whether we are in a booming economy or in a deep recession. So the health care space is poised to do very well down the road. Also keep look for innovation. I love finding companies that produce new products/services that revolutionize the way people live. Think about Apple Inc (AAPL) 10 years ago when they introduced the iTunes, iPhone, iPad, etc and completely changed the way people listen to music, used their cell phones, etc.. etc.. The stock soared as a result. Tesla (TSLA) is another great example. It is a little early but this stock has some real fire-power. It is up ~40% since it was featured in MWA just recently. They just reported earnings and smashed estimates, the stock surged another 10% this morning right at the open! That speaks volumes.
Jim: Okay, thanks very much Adam
Adam: My pleasure.
Note from Editor: Adam is the CNBC-quoted hedge fund manager and trading genius whose recommendations were actually UP 55% in 2008 and continues to provide great profits for subscribers to his Midas Wave Alert service available by invitation only.