Transcription of last Friday’s “Market Situation Report”

This email is a full transcription of last Friday's "Market Situation Report". We all synthesis information differently…and for some text is best.

I hope you enjoy Friday's transcription. If you would prefer the video format, you can find that here

 Market Situation Report

 Let's talk about Quantitative Easing Forever!

I want to show you where the money went (flowed) when the announcement was made by Draghi, the European Central Bank leader, and the announcement from Bernanke, the Federal Reserve leader.

I thought the winner of "QE Forever" was going to be the metals, specifically Gold or Silver.  But it wasn't. It was a country that had fallen of my radar screen.

For reference I want to first show you the S&P 500 (Figure 1).

Figure 1: S&P 500


This first green line is Mario Drahgi's announcement where he said that European Central Bank is going to print money forever or until something good happens.  What that something might be, we don't know. 

The second green line is when Bernanke spoke.  Point A represents the day before the announcement was made.  From point A to point B the S&P 500 went up about 2.65%. 

2.65% in about two weeks is not that trivial…so the stock market generally liked the announcements.

Now let's take a look at the chart for the US Dollar (Figure 2).
Figure 2: US Dollar


Again, the first green line is when Drahgi spoke; the second is when Bernanke spoke.

Since everyone came out and said they were going to start printing money, the dollar has dropped about 2%.  This makes sense today.  More printing or a "printable currency" lowers the value of that currency.

BUT there was a point in the last four years when the US Federal Reserve, said they were going to print money and the US Dollar would rally…no more. Now it falls.

Tides are changing as well as sentiments towards money printing. Take note.

The Bond Market Index (Figure 3) shows that people still put money into the bond market even after these two announcements.  This is too bad as those people in due time will get crushed again…and for some the third time in 15 years.

Figure 3: Bond Market (BND)


The flow into bonds is telling us that people want to keep their money safe so they are putting it into the bond markets.  Too bad the idea of "bonds are safe" is dead. BND went up about 0.15%, it is the direction I want you to notice not the size of the move.

Now, Gold did what it probably should have done (Figure 4).  When Drahgi's announcement came out Gold went up big the next day.

Figure 4: Gold


Then, the next spike came after Bernanke gave his announcement.  And after that you got Thursday's pop on point C.

Gold looks really strong.  Gold wants to go up, it looks like it wants to break $1800.  Over the next five or six years Gold will definitely surpass the $2000, $3000 or even the $4000 mark. But we just have to be patient.

But the place where money "QE-Forever" popped the most for both announcements was a country that most people forgot about, including me.

Look at this pop that India did (Figure 5). I am using the tracking symbol EPI, which is an Exchange Trading Fund representing India. Look at this pop! It went up 15%.

Figure 5: India


This is not a Leveraged India Fund either. India moved up 3x more than Gold did.

It makes sense that the money is going to be flowing into emerging markets.

I thought that Hong Kong would have the biggest pop because the Hong Kong Dollar is pegged to the US Dollar.  But Hong Kong "only" went up about 9%.  I thought that was going to be the winner, but in fact it was India.

And that is the market situation for the week. Things are starting to sort themselves out.

The printing of money is already starting to squeeze out in parts of the investment world creating bubbles where they probably shouldn't be.

India is popping and the money is flowing over there faster than I thought possible.

We are going to talk about this more on our October 9th Monthly Strategy Gathering.  I'm titling  October's Strategy Gathering  "The Strategy of the Top 1%".

And to grow your money like the top 1%… it's all about how people behave.  It's not about what you buy. It's about HOW it is purchased. HOW you behave. HOW you own. HOW you sell. HOW you handle your tolerance to do what is best for your money.

It's about HOW to buy not about WHAT to buy.

Anyone who has been growing their money knows that being able to interact with other people that have been doing it properly is one of the differences that makes the difference.

I look forward to seeing you on the 9th

PS – I just finished making five training videos that will almost certainly help you protect and grow your money better than it ever has before. And here is the best part. I am making them free for you. The only catch…you are going to love the training videos so much that, if you are not already a member you will want to be one so you can simply plug your investments into the Fearless Wealth Platform. Keep an eye out for them in the next couple of weeks.


Together, we are growing and protecting your wealth,

RC Peck, CFP 

Fearless Wealth | Investment Independence
Helping Individuals Reach Financial Independence Sooner, Faster, Safer.