A Big 'Wave' Could Hit Stocks Soon

Don't miss our free 'Town Hall' event... Oil prices spike (again)... An uncertainty cocktail... Greg Diamond's bearish warning... A big 'wave' could hit stocks soon... A 'relief rally' – for now...

Our editors covered a lot of ground in yesterday's special 'Town Hall' event...

If you missed yesterday's Digest, we highlighted that nine of our editors gathered via video yesterday for an unscripted, unedited broadcast to talk about the war unfolding in Ukraine... and how it could play out in the markets.

I (Corey McLaughlin) suggest you go and watch or listen to the whole thing for yourself...

Our Director of Research, Matt Weinschenk, hosted a great panel... including Retirement Millionaire editor Dr. David "Doc" Eifrig, Extreme Value editor Dan Ferris, and Ten Stock Trader editor Greg Diamond.

In the time and space we have today, we simply can't cover in-depth all the great ideas they discussed... like the large amount of food that Ukraine produces... or the brief back-and-forth Dan and senior analyst Matt McCall had about gold as an investment...

And we've also already covered the significant market news of today – oil prices spiking 8% to roughly $105 per barrel – when we explained last week how and why Russia's invasion of Ukraine would likely cause oil prices to keep rising... as they have for over a year.

So, in today's Digest, I want to explore the other shortest-term of topics that our editors discussed yesterday... and why one of them is expecting a big "wave" to hit U.S. stocks – for better or worse – this month.

Where do stocks go from here?

This is a question anyone with any amount of money in the markets would like to know the answer to...

In the longest of terms, as True Wealth editor Dr. Steve Sjuggerud likes to say, U.S. stocks have gone up 70% of the time, no matter what is happening in the world... Of course, it's that other 30% that gets people the most nervous – and rightfully so.

That's why close readers know that Steve, a known bull around our business, recommends everyone with money in the markets have an "exit plan"... Remember, investing rule No. 1 is – or should be – don't lose money.

Anyone who tells you exactly what is going to happen next in the markets – and is right all the time – has superhero-like powers that we don't... But what every investor can do in place of knowing the future with certainty is think about the possibilities of what could happen next...

Then you prepare accordingly by buying or selling different assets... or whatever else you might think is appropriate.

And what is appropriate is different for everyone... What you own should depend on your goals, your risk tolerance, and your time horizon.

The theme of 2022...

As we've said since the start of this year, there's a good chance 2022 will go down as a year defined by "volatility"... with wild swings in prices that investors haven't seen since the March 2020 "COVID crash."

I wrote in the January 6 Digest that the simple fact that the Federal Reserve is getting more "hawkish" – or tighter with monetary policy and talking about raising interest rates – was a big enough reason alone to expect asset prices to fall. We wrote...

It's probably wise for you to prepare for a "hawkish" ride in the stock market in 2022...

As a few of our editors have talked and written about lately, that could mean a wild, volatile trip in the short term...

To get more specific, a few days earlier in the January 3 Digest, we highlighted that "volatility" was our colleague Greg Diamond's "theme for 2022" in his Ten Stock Trader service...

We also shared that in November of last year, Greg was saying the bull market could end in February or March of this year.

He didn't profess to know the exact "why," but he had conviction on the "when," based on his technical trading strategy... which focuses on the price behavior of a stock or asset through various indicators, including human behavior.

RELATED: "How I Traded $900 Million in One Day"

We also highlighted that Greg's been tracking an "analog" between the two-year rally in stocks before the dot-com-bubble crash in 2000... and the nearly identical behavior we've seen in the markets following the COVID-19 crash over the last two years...

Greg's been spot on with his bearish warning...

With this in mind, we want to share what Greg said in yesterday's Town Hall, which, again, is free for all Stansberry Research subscribers as a no-strings-attached bonus in light of the current market events.

You can watch the Town Hall here. It's roughly 90 minutes long and don't worry, we don't ask you to buy a single thing...

During the event, Greg shared an important update to his "roadmap"... He started with the fact that many big-name growth stocks, like Netflix (NFLX) and Meta Platforms (FB), are down roughly 50% from their most recent highs...

They're down, by huge double digits... This is signaling to me, regardless of what the major indexes are doing, underneath the market, it's not very healthy.

The market is sick, and not in a "cool kid" way...

Right now, Greg says price action is showing dot-com-bubble-like behavior and that could continue... He says the market has reached a key "inflection point" that he will be watching closely into mid-March.

The catalyst for the market's next big move, Greg says, will be based on the action of the Fed, which has several decisions to make about monetary policy – in response to 40-year highs in inflation – at its policy meeting later this month.

To hear Greg say it yesterday, whatever they decide – raising rates or any other asset-purchase-related measures – the outcome for stocks is anyone's guess...

We've reached an inflection point where inflation is either going to take off and stocks drop 50% or, you have this 2011 scenario coming out of the Great Recession... everybody was worried about inflation and stocks kind of chopped around... and then stocks continued to move higher...

That's why I think this next coming Federal Reserve meeting is so important.

What's the Fed going to attack? Is it going to be inflation? Or are they going to allow it to do its own thing because of what happened in Russia and Ukraine? Do they back off? That's going to be a huge signal, and we'll find out whether we're in a 1970s scenario or whether we get that 2011 scenario and stocks take off again...

If the market can't rally after the Fed's meeting later this month, Greg says, it could be a lose-lose indication of investors "pricing in" more inflation... or the idea that the Fed's policy-tightening moves are going to hamper growth. As Greg said in the Town Hall event...

It becomes a cocktail of a lot of uncertainty. If the market proves me wrong, so be it. I'll adjust to that, but right now, this is the roadmap that I'm following.

Greg, a Chartered Market Technician, recommends short-term trades in his Ten Stock Trader service... But as we have mentioned before, and we know subscribers have picked up on, his outlook also provides helpful insights on where the broad indexes or various sectors could go next, which can be helpful for any investor.

You might be surprised to learn Greg just put on a short-term bullish trade...

In recent days, Greg's actually been expecting the U.S. indexes to rise (within the context of his bearish longer-term outlook)... In fact, today he recommended a trade to Ten Stock Trader subscribers that is a winner if the benchmark S&P 500 Index rises over the next week, at least.

In his Weekly Market Outlook on Monday, Greg said he's following a potential "relief rally" from the recent lows in the S&P 500 to near 4,500 or 4,600 into next month. But then, importantly, "the bigger wave" he sees on the horizon will arrive...

This second wave, the end of the relief rally, is the wave we'll wait for. It's the patience we'll need to exhibit to ride our wave and take advantage of extreme volatility.

Greg compared the situation with being out surfing... waiting to catch waves. You might want to try to ride every wave that rolls in, but then a better wave eventually comes along... and you might miss it or not have the energy to give it your best ride.

If things play out as Greg thinks they could, this next "wave" he's preparing for will be a moment that anyone with money in the markets should pay attention to – because it can be a point where folks can make or lose money in a short period of time. This isn't predicting. This is preparing.

As we said today, a lot of it has to do with how the market responds to the Fed's next move that is coming this month. Stay tuned... and we'll keep you posted on any important updates to Greg's thesis.

When Credit Markets Get Sick, Equities Die

In this interview with our editor-at-large, Daniela Cambone, Executive Director of Validus Power Greg Foss outlines his vision for the credit markets and stocks... and explains why you should own bitcoin as a "short position on sovereign debt"...

Click here to watch this video right now. For more free video content, subscribe to our Stansberry Research YouTube channel... and don't forget to follow us on Facebook, Instagram, LinkedIn, and Twitter.

New 52-week highs (as of 2/28/22): Altius Minerals (ALS.TO), Altius Renewable Royalties (ARR.TO), Freeport-McMoRan (FCX), Freehold Royalties (FRU.TO), Lockheed Martin (LMT), Cheniere Energy (LNG), Mosaic (MOS), Northrop Grumman (NOC), Nucor (NUE), Palo Alto Networks (PANW), Raytheon Technologies (RTX), Suncor Energy (SU), Viper Energy Partners (VNOM), SPDR S&P Oil & Gas Exploration & Production Fund (XOP), and Zeta Global (ZETA).

In today's mailbag, feedback on yesterday's Digest about the war in Ukraine and our special "Town Hall" event. If you missed the free roundtable discussion yesterday, you can find it here... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"The question has been raised elsewhere as to whether or not the Russian nuclear alert is theater. Depends on how Putin looks to the future.

"Ukraine accounts for 16% of the world's wheat and 12% of its corn. This would serve as income to Russia if not polluted. Or put another way, don't pollute the hand that feeds you.

"The second item is in the northern hemisphere the winds blow from southwest to northeast predominantly. Any nuclear fallout could easily blow toward Russia.

"Putin has more money than he can ever spend. It may not matter to him what happens to the country. Heck, maybe he shorted the ruble." – Paid-up subscriber Joe W.

"Regarding your Stansberry Digest 'What the War in Ukraine Means for the Markets'...

"Your contact there, Bill, reported that Russians were getting caught wearing Ukrainian uniforms...

"The way the Russians are getting caught is simple. If a Ukrainian sees a group of four to five guys in uniform, Russians would not go around by ones or twos, then the Ukrainian starts talking to them in Ukrainian.

"Since Russians speak only Russian, but not Ukrainian, whereas Ukrainians speak both Russian and Ukrainian, if the guys in uniform do not answer in Ukrainian, they are Russian troops. Caught!

"I spend a lot of time in Ukraine myself. Many contacts. My wife is Ukrainian. I speak Russian (but not Ukrainian fluently)." – Paid-up subscriber Robert R.

"Excellent job on the Town Hall. I so much appreciate everyone having the freedom to speak their mind." – Paid-up subscriber R.W.

"In today's event one slide caught my attention. I have been concerned about the inflation discussion lately. I see predictions of interest rates below 3% at [year-end 2022], some way below.

"To beat inflation, [former Federal Reserve Chair Paul] Volcker raised rates that much above the inflation rate. The slide that had CPI, inflation rates and interest rates made this really obvious. Do we really think even seven raises of 25 basis points will make a difference?

"Thanks for the Town Hall, by the way. It was really well done." – Paid-up subscriber Ernie B.

All the best,

Corey McLaughlin
Baltimore, Maryland
March 1, 2022