The Only Thing That Can Stop A Bear Market

I do think there's a good chance that in February we began a long overdue bear market. Technically we haven't gone down 20 percent so Wall Street still calls it a correction and recently we've had a bit of rally which to me looks like the correction in the bear market.

The only thing that would stop the bear market from actually materializing would be a change of policy by the Federal Reserve which I wouldn't rule out because I do expect the Fed to change policy.

I expect the Federal Reserve to reverse the rate hikes and to go back to zero interest rates. I expect the Fed to launch another round of quantitative easing, QE4. So if they do that before we're in an official bear market then we may never have an official bear market so I just don't know how long the Fed is gonna wait before showing its hand.

Stocks: This Is A Bear Market

It looks like the period of relative calm in the markets is over and the next leg down has begun. 

This is a bear market, the upward move was the correction. It was the first correction in this young bear market that technically is not a bear market yet because we're not down 20 percent but that's only a matter of time before people call the bear market what it is.

Global Debt Has Reached Record Levels

Global debt has reached record levels. According to a recent International Monetary Fund (IMF) report, the world has amassed $164 trillion of debt. Three countries account for half of the total global debt – the US, China and Japan.

Petroyuan Clould Be The Death Blow For The U.S. Dollar

As an article at the Gold Telegraph starkly put it, “the rise of the petroyuan could be the death blow for the U.S. Dollar.”

Podcast: The Calm Before The Storm

Peter Schiff discusses the state of the economy and his market outlook on his most recent podcast.

Gold: Ever Tightening Supply

During the Squawk Box interview, US Global Investors CEO Frank Holmes noted that the massive money-printing around the world has made gold an important part of an investment portfolio. Holmes also mentioned the ever tightening gold supply.

Related trading instruments: 

• SPDR Gold Trust ETF (GLD)
• Market Vectors Gold Miners ETF (GDX)

Stock Market: Short-Term Pain

Even President Trump came out today and he said the stock market might be in for some short-term pain right but he says it's worth it because we're going to get a long-term gain and of course he's referring to his tariffs or a trade war that we're gonna win this trade war and that's going to deliver the long-term gain. It ain't! We're gonna have short-term pain and then the pain is gonna get worse in the long run.

Gold: A Tight Trading Range

If you look at the gold chart the range is really getting compressed. We're not breaking out but we're not breaking down. It's getting narrower and narrower, we're really consolidating.

Related trading instruments: 

• Market Vectors Gold Miners ETF (GDX)
• Market Vectors Junior Gold Miners ETF (GDXJ)
• SPDR Gold Trust ETF (GLD)

Stock Market: We Are In A Bear Market

We're in a bear market, it's just not officially acknowledged yet. You know, just like a lot of times you know they don't acknowledge the recession until after you have two quarters of negative GDP growth but clearly you're in the recession for a long time before it's officially admitted. 

There's one caveat if the Federal Reserve comes in and changes the game by taking away the rate hikes or launching QE 4 then we may never make it to a bear market. But if the Federal Reserve continues on its current path and maintains the current pretense then we are in a bear market and it's only a question of time before it is officially acknowledged.

Related trading instruments: 

• SPDR S&P 500 Index ETF (SPY)
• SPDR Dow Jones Industrial Average ETF (DIA)
• iShares Russell 2000 Index ETF (IWM)
• Nasdaq 100 Index ETF (QQQ)

Stock Market: More Down Quarters To Come

The market action that I've been observing really to me looks like a bear market. 

For the first quarter all the major stock market indexes were down. This was the first time in 10 quarters as we had 9 consecutive positive quarters (I think that's a record).

The US stock market finally broke that winning streak we'll see how investors who thought the US stocks can only go up may react to their first down quarter in ten. But it's not going to be the last down quarter, I think this could be the beginning of several more down quarters to come.

Related trading instruments: 

• iShares Russell 2000 Index ETF (IWM)
• SPDR S&P 500 Index ETF (SPY)
• Nasdaq 100 Index ETF (QQQ)
• SPDR Dow Jones Industrial Average ETF (DIA)