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Fear Forms Bottoms

Kurt S. Altrichter, CRPS®
Kurt S. Altrichter, CRPS®
  • If you’re trading in this market, you’ll need to move quickly and take small wins.
  • We are sitting on roughly 70% cash.
  • Is this the cycle for alternative investments?

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Kurt S. Altrichter, CRPS®
The street hasn't been pricing in inflation. They have been pricing in the steady rise of default risk. The procedure of natural phenomenon looks like it is about to change in a BIG way.
Click HERE for the full analysis.
Fear Forms Bottoms
It would be silly to expect every bear market to turn into the Great Depression. It would be equally wrong to expect that a fall from overvalued, to more fairly valued, couldn’t badly overshoot on the downside. - Seth Klarman
The market has traded down ever since Fed Chair Powell was at the conference in Jackson Hole. The Ivory Hill RiskSIGNAL is still red (since January) and we are sitting on roughly 70% cash, and we’ll likely raise more cash as our technicals dictate. This is a trader’s market, short and simple. Volatility is in chop mode, which means going long on anything can be risky if you do not have a process for this market. If you are shorting stocks or ETFs here, you have lots of room to get chopped up as bear markets make fools of bulls and bears.
If you’re trading in this market, you’ll need to move quickly and take small wins. We have a substantial amount of cash on hand, and in volatile markets, patience is a virtue.
We are barely holding any bonds right now. In the past, when the stock market was performing poorly, bonds were a terrific area to hide, as you could make money while protecting your downside risk. The 20-year Treasury ETF (TLT), which holds bonds backed by the US government, is down 30% from its all-time highs. When the Fed signals that it is halting interest rates, which could take some time, bonds at the longer end of the curve will be a terrific location to start layering into before equity markets turn up. Since the market is usually way ahead of this, I would expect to start seeing a positive movement in Treasuries before the Fed pauses rates.
Bitcoin is down, and it might retest support in the 18200 area. If this area of support is broken, you could see Bitcoin sell off to the 12500ish area, and I would not at all be surprised if this happened. This has been a heart-stopping fall from the 67000 highs, to where it is now at the 19500 level. We do not own any Bitcoin currently, and when we have, we have used ETFs and been very quick to take profits. This is not the right time to own bitcoin right now. The entire crypto “asset class” is fueled by leverage and excess liquidity, and that is being taken away by the Fed. Fun fact, there is actually more debt taken out (leverage) to buy crypto than there is actual cryptocurrency in the market place, and too much leverage always leads to an inevitable demise.
Before we dive in, I would like to address a question that I have been getting lately. In my experience, if one person asks me a question, then there are usually others thinking the same thing.
“Someone told me silver was a great investment right now.” What are your thoughts on it?“
That was a question from a business owner who was encouraged by a friend to purchase physical silver bars and coins. And given yesterday’s 2.09% drop in silver and the more notable 2.17% drop in gold, which hit a fresh 52-week low, I thought it would be timely to include my take on that question.
Click HERE for the full analysis.
Outperformance is achieved through the avoidance of major market crashes.
Best regards,
-Kurt
Schedule a call with me by clicking HERE
Kurt S. Altrichter, CRPS®
Fiduciary Advisor | President
8400 Normandale Lake Blvd, Suite 920, Bloomington, MN 55437
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Kurt S. Altrichter, CRPS®
Kurt S. Altrichter, CRPS® @kurtsaltrichter

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8400 Normandale Lake Blvd, Suite 920, Bloomington, MN 55437