Last week we wrote that one of our select leading indicators signaled ‘risk on’. This is what we wrote: Mid-Cap Sector Signals Stocks Bull Market And “Risk On”. Our focus in that article was on this year. However, one even important risk indicator in our pallet is 20-year Yields in the U.S., and since this week it signals as well a continuation of ‘risk on’. With same conclusions from 2 distinct risk indicators we are confident to confirm that the global stock bull market will continue into 2019.
Before looking into the details on why we expect the global stock bull market to continue in 2019 we want to highlight that we expect our 2019 forecasts will be performing very well in the coming months.
Our leading risk indicator is in favor of the global stock bull market
As explained in our article The Most Important Chart Of This Decade: Are Yields Signaling A 2008-Alike Scenario the 20-year Yields in the U.S. were flirting with a trend change. From a long term downtrend to a new uptrend. We wrote this in February, when everyone was panicking:
If, and that’s a big IF, 10-year yields break outside of its falling channel it will be very disruptive for U.S. markets. First and foremost, U.S. stock markets would look entirely different. A new paradigm will hit U.S. stocks. We prefer not to predict the exact evolution as that’s largely unknown. We will assess how intermarket trends play out at that moment in time. If anything, interest sensitive sectors would do very well.
In the meantime we know that rising Yields are good for stocks.
Global stock bull market in the first months of 2019
We have included the long term 20-year Yields chart.
Visibly, as we annotate the pattern(s) which represent the dominant trends Yields are now rising in a long term downtrend. However, this rounding bottom has likely signaled the trend change: from downtrend to uptrend.
Whatever happens longer term it is clear that short to medium term Yields are rising to the 3.4, ultimately 3.8 level. We expect this level to be hit in the coming months, presumably in the first months of 2019.
That’s why we believe that global stock markets will do well in the coming months. Not only do we expect an end-of-year-rally, but also a good start of the year 2019.
Why is this important? Because this is the ideal ground for high beta stocks to oupterform. We think, primarily cannabis stocks in Canada will do amazingly well, with this one as an ultra-bullish stock tip This Quality Cannabis Stock Will Be A Multi-Bagger In 2019.
Moreover, we expect crypto to recover in the coming months, as it is setting a long term bottom now. Our premium crypto subscribers get all detailed updates on our vision, forecasted path forward as well crypto and blockchain stock tips.