The 'Rolling Crash' Is Here

The market's underlying conditions have changed... Most investors watching the Dow and S&P 500 missed this event... The 'rolling crash' is here... It's time to plan for what's next... Join me tomorrow night at 8 p.m. Eastern time...

Editor's note: Before we get into our special investing series today, I (Corey McLaughlin) wanted to share some important developments we've been tracking this week...

Most notably, the war in Ukraine continues. But we're hearing some "good" news for now... In short, after a month of bloody fighting, Russia is moving military forces away from the Ukrainian capital city of Kyiv.

As Stansberry NewsWire editor C. Scott Garliss detailed earlier today, Russia's defense minister said the move was to boost trust in cease-fire negotiations with Ukraine. Those talks continued in the neighboring country of Turkey today.

This is the most substantial peace offering we've seen in the conflict so far.

It doesn't mean the war is over, but it looks like the sides could be inching closer to an outcome. The Donbas region along the Ukraine-Russia border is the crux of the conflict now.

What does this mean for the markets? As Scott wrote this morning...

While the S&P 500 is rallying, Wall Street's trust factor for Russia is low.

If this event leads to a long-term solution to the conflict in Eastern Europe, it could ultimately weigh on the prices of oil and other commodities, which spiked as the war began. That's because the worst-case scenarios about global inflation would become less likely.

We'll see what happens.

One other brief, but notable market note...

Bitcoin has busted out of the monthslong trading range we've previously talked about. The world's most popular cryptocurrency is up roughly 8% over the past two days to more than $47,000.

As NewsWire analyst Nick Koziol wrote yesterday, with this recent move higher, bitcoin has erased its losses for the year. And bullish trends are in place... Last week, crypto investment products saw their highest inflows of the year, as well as their eighth positive week of the past 10 weeks.

We'll have more on cryptos later in the week. For now, let's move on to the third part of the investing series from the folks at our corporate affiliate Chaikin Analytics...

On Friday and yesterday, Chaikin Analytics CEO Carlton Neel shared a couple of valuable "secrets" – having a repeatable investment process and buying investments in the "best of the best" market segments. Over the next two days, company founder Marc Chaikin will explain why those two investing secrets are especially important right now...

As you'll see, the "investing road map" isn't as clear as it was just a few months ago. And according to Marc, the next 90 days could determine your wealth for the next decade...

Your suspicions are correct...

The U.S. stock market is a wildly different animal than it was even just three months ago. That's true in terms of both the fundamentals and the technicals.

Behind this shift is a financial story that no one is telling right now. And it's keeping me (Marc Chaikin) up at night.

I can see it in a way that most everyday investors can't. That's because my Power Gauge system is picking up on it...

It's showing an extreme setup I haven't seen in years. Something like this hasn't happened since well before the COVID-19 crash in March 2020.

Simply put, we've been on an easy ride with a clear investing road map for the past couple of years. But the road map has gotten much harder to read in recent months...

And now, I'm worried that millions of U.S. investors are about to drive straight off a cliff. They'll make every investing mistake in the book – including missing out on one of the biggest wealth-building opportunities in recent history.

In short, a big shift is coming within the next 90 days. That's why I'm here today...

However, you've likely missed what's happening if you've only followed the 'broad market'...

Most folks right now are worrying about the next big market crash. They're scared that it will come soon.

But if you're looking at the market like I do – and like a hedge-fund manager would – you know the real answer...

It's already happening.

You see, most industries have already crashed. Some of these crashes started happening as far back as February 2021. And when it comes down to it, almost all the industries in the market have already crashed 20% or more within the past year.

For example, the biotech industry crashed 47%. And retail stocks crashed 25%.

That's not all, either – not by a long shot...

The software industry crashed 23%. Health care services and health care equipment stocks both crashed more than 20%. And transportation stocks crashed 20%.

Even defense-related companies and oil and gas stocks – which are both up a lot recently – crashed into a bear market within the past year. Oil and gas stocks fell as much as 32%, while defense stocks were down 21% at one point.

The tech crash is particularly interesting...

So-called "innovative technology" stocks crashed as much as almost 40%. Just look at what happened to the SPDR FactSet Innovative Technology Fund (XITK) in late November...

Beloved stocks in this industry took a very publicized beating.

Regular Digest readers know all about Cathie Wood's ARK Innovation Fund (ARKK). It's the poster child for investing in "overpriced" tech stocks.

And that was before the broad market took a nosedive in January and February...

In other words, this corner of the market started crashing long before folks were scared about a broader crash. No one at the time feared the war in Ukraine or anything like that.

Now, just a few months later, it's a much different story... The S&P 500 tumbled into a correction. And since then, we've seen heightened volatility and erratic movements in the market.

Meanwhile, hundreds of stocks in the weakest industry groups have been suffering big crashes for more than a year. The only difference is that now the losses are becoming widespread enough to get the attention of the mainstream media.

Again, the overall market had dropped as much as 13% earlier this month before bouncing back over the past few weeks. It's still about 2% below its all-time high.

But if you were to zoom in, you would see that more than 60% of the industries we monitor at Chaikin Analytics have plummeted between 20% and 50% since February 2021.

That's a market crash, my friends. It just doesn't look like the ones you're used to.

It's called a "rolling crash."

A rolling crash doesn't happen in an instant. It can be much worse. It spreads across the market over time. It sends specific industries crashing before spilling over into the next.

It acts like a snowball. It gets bigger and picks up speed as it races down the hill. And the only way to not get run over by the snowball is to know where the crash is rolling next.

Have other rolling crashes occurred in the past? Absolutely...

The last rolling crash happened in late 2018.

That year, investors were worried about war with China. And talks of a big interest-rate hike led many folks to believe the end was near. Sound familiar?

Stocks were still chugging higher overall back then. But the rising index failed to warn investors that something serious was bubbling under the surface...

You see, the average stock in the index was down 18%. So it's not surprising that the market soon tumbled into a downturn.

The 2018 rolling crash spread from the banking industry... to automakers... to raw materials... to the semiconductor industry...

And it all culminated in a big, market-wide plunge. The S&P 500 nearly entered bear market territory on Christmas Eve.

I called it the "Christmas Eve Massacre" at the time. For investors with money in the wrong stocks, it felt like there was blood in the streets.

And again, you might notice that it all sounds eerily similar to what we're seeing today. Geopolitical fears and interest-rate rumors are swirling. The parallels are quite clear when you analyze the market on an industry level.

Another rolling crash happened on a smaller scale in 2015...

A "flash crash" occurred in Chinese stocks. Then, the price of oil plunged.

And when you zoom into the industry level, you can see how the rolling crash spread from industry to industry in just less than a year...

The mining industry collapsed 58%. The crash then rolled into the entire oil and gas industry, which plunged 55%.

Then, it rolled into a 47% crash in the biotech industry... a 40% crash in the pharmaceuticals industry... and a 30% crash in the health care industry.

In the end, the S&P 500 itself only dropped 15%. But the months leading up to that were still a terrifying, painful time for investors. Many folks were blindsided by massive losses.

That's the exact experience most investors have felt since the start of this year, too.

And a similar phenomenon happened in 2011. Back then, the markets quickly plunged after Standard & Poor's downgraded the credit rating of the U.S. from the coveted "AAA" level.

I've seen this period called "the bear market nobody talks about"...

Overall, the S&P 500 crashed 19%. But before and after the broad market fell, a far more devastating rolling crash spread across specific industries...

The banking and insurance industries both crashed more than 30%. Meanwhile, industries like transportation, biotech, and retail didn't peak until as much as five months later. And then, they crashed 20% to 30%.

It's crazy to think about... but even an investor in his or her early 30s, who is still just testing the waters, has already lived through four rolling crashes.

They're a natural result of the stock market growing bigger and more complex.

The good news is that you can STOP worrying about the day of the next big crash...

It's already here.

And it has already sent a wave of losses through 60% of the market's industries.

The bad news is that you have a very narrow window of time to prepare for what comes next. I'll say it up front... Things are about to get a whole lot worse for some stocks.

But at the same time, not everything will crash. Some stocks are poised to deliver gains that will rival – and even exceed – what we've seen over the past couple of years.

In fact, one industry in particular is still churning higher in spite of the recent volatility and rolling crashes. And I'm planning to share one of my favorite stocks within this industry with everyone who tunes in for my special event tomorrow night.

Plus, I'll tell everyone about the No. 1 worst stock to own right now. It's a soon-to-fall pandemic stock that many investors have overlooked. But you can't afford to ignore what the data shows us. If you're holding shares, you'll want to unload them immediately.

This free online event will kick off tomorrow night, March 30, at 8 p.m. Eastern time. I encourage you to have a pen and paper handy to take notes. Save your spot right here.

New 52-week highs (as of 3/28/22): AbbVie (ABBV), Berkshire Hathaway (BRK-B), Brown & Brown (BRO), Hershey (HSY), Palo Alto Networks (PANW), Pure Storage (PSTG), Virtu Financial (VIRT), and Utilities Select Sector SPDR Fund (XLU).

In today's mailbag, some more kudos for professional golfer and Stansberry Research partner Kevin Kisner, who got some more airtime over the weekend. Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"Watching the WGC [World Golf Championship] Match Play on TV this weekend and saw that Kiz [Kevin Kisner] is sponsored by Stansberry. Well done!

"Kiz is one of my favorite players – a bulldog who doesn't give up. Thank you for choosing to support him. As an Alliance Member, I'm very happy with this choice and with Stansberry's research." – Stansberry Alliance member Jeff B.

Corey McLaughlin comment: Thanks, Jeff. Happy to hear you are happy about our relationship with Kevin – and our research, of course.

Kevin has been on a heater lately. As we mentioned a few weeks ago, he finished fourth at the prestigious Players Championship. Then, this past weekend, he finished second in the WGC Match Play event – kind of golf's equivalent of college basketball's March Madness.

A past winner of the Match Play tournament, "Kiz" made it into the final on Sunday for the third time in six career appearances. He came up just short against Scottie Scheffler, another guy who is playing really well. And Scheffler took over the world's top ranking with the win.

For the second-place finish, Kevin pocketed $1.3 million. That puts him at more than $2 million in prize money in the past month alone. But, Jeff, as you allude to, it's not just about the money with him...

Given his top finishes lately, Kevin's attitude – the "bulldog" mentality is appropriate, given he's a University of Georgia alum – has been in the media spotlight again.

Ranked 27th in the world, Kevin brings a certain grit and humility to the golf course that is easily appreciated by those of us so easily frustrated by our own attempts to play the game.

As Golf.com writer Dylan Dethier wrote about Kevin in an article yesterday, "He loves being, as he says, a 5'10, 160-pound underdog. And we love watching him be all of the above."

Kevin spent most of the past weekend talking about how he just wanted to be "annoying" to the world's best. And he put together an incredible comeback in the event's Round of 16, rallying from a three-hole deficit with four to play to beat former world No. 1 Adam Scott.

As he wrote on Twitter afterward...

That's our guy.

Good investing,

Marc Chaikin
March 29, 2022