June 12, 2024 12:42 AM | 2 min read
20-year pro trader reveals “Moneyline”
Ditch the indicators and use the “Money Line”. A simple line that tells you when to buy or sell without the guesswork. It’s the line on a chart that helped Nic Chahine win 83% of his options purchases. This is how he does it.
According to a Wall Street veteran, the stock market is currently facing a potential bubble that could lead to a big buying opportunity.
what happened: Richard BernsteinThe RBA’s chief investment officer warned that the market’s most expensive stocks are probably overvalued and could be heading for a correction, but this could present a “huge” buying opportunity for other areas of the market, Business Insider reported.
Bernstein highlighted the disconnect between the bond and stock markets, signaling a possible correction: Tighter credit spreads in the bond market, signaling rising corporate profits, while in the stock market, only a few stocks are doing better, suggesting most corporate profits are stagnating, he said.
He suggested the bond market could be signaling a wave of credit events and corporate bankruptcies, but a more likely explanation is that the most expensive stocks are overvalued and in need of a correction, while the rest of the S&P 500 is showing signs of strength.
“Fundamentally, it just doesn’t make sense. The bond market is saying corporate earnings are going to be strong, but the stock market, which is led by a very narrow band of seven companies, is saying the earnings outlook is dire,” Bernstein said.
“I like all but seven of them. In fact, I think the opportunity set is the broadest it’s ever been in my career,” he said. “I think there’s a tremendous opportunity here.”
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Why is this important?Bernstein’s warning adds to growing concern about the current state of the stock market. Harry Dent He predicted “the biggest crash of our lifetimes,” suggesting the S&P 500 could plummet as much as 86% from its peak.
Similarly, economists and financial commentators Peter Schiff He warned that U.S. stocks are overpriced and advised investors to be more cautious with their investments.
Despite these warnings, Bernstein sees a silver lining for investors who have diversified away from the most expensive mega-cap tech stocks. He thinks the bubble’s bursting is good news for their portfolios, because it could pave the way for a “lost decade” in the stock market during which small cap, energy and emerging market stocks could perform very well.
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Image courtesy of Shutterstock
This story was produced by Benzinga Neuro. Kaustubh Bagalkote
20-year pro trader reveals “Moneyline”
Ditch the indicators and use the “Money Line”. A simple line that tells you when to buy or sell without the guesswork. It’s the line on a chart that helped Nic Chahine win 83% of his options purchases. This is how he does it.
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