Since early October I’ve given so many warnings about the stocks market it’s almost making me sick already. No, not because the market might correct or even crash, but because I must be starting to get annoying to all of you. The intention of my warnings is to make you aware that there are risks and that you do everything that’s in your power of protecting your wealth (see Do NOT underestimate the risk). This is why we’re here, aren’t we? Making money is important, but protecting it, this is an even more important task in my opinion.
Let’s take a look at a banking sector. I wrote a post about financial sector a few weeks ago and that we are looking to short it under the right conditions (see Sectors on the watch to short). I was also going on about yields falling or bond prices rising in the intermediate term (see From yield curve inversion to bond squeeze?).
What if the FED hikes for the last time this December and pauses with rate hikes next year? What if the natural consequence is that the banks suffer in the same period? And when banks are trading lower it is never a good sign for the stock market in general!Read More