Why Greg Diamond Sees a 'Super Bull Market'

Catching up with Ten Stock Trader editor Greg Diamond... He called 'the' top and bottom of 2022... 'The market doesn't work like that'... A 'super bull market'... What Greg cares about... The process of technical analysis...

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Imagine a guy who called 'the' top and bottom in U.S. stocks in 2022...

You'd probably be interested in hearing his insights, right? Well, I (Corey McLaughlin) do know a guy. His name is Greg Diamond, editor of our Ten Stock Trader advisory and a former Wall Street trader whom I've been fortunate to get to know over the last several years at Stansberry Research.

I know Greg's subscribers feel the same way following his daily updates in Ten Stock Trader. I've seen a lot of the feedback, like this one from subscriber George O., who remarked about Greg and the strategies he uses...

Greg is the best practitioner I can find of W.D. Gann (best market trader in history) and Elliott Wave technical indicators… If one does not believe that W.D. Gann and other technical indicators with massive decades-long records for being correct, then as we say in the South, "There is no cure for stupid."

One of the great things about Greg's work is that he not only shares actionable recommendations on what to do but constantly explains why he's doing it, too. Subscribers get these explanations as Greg goes about his technical analysis and time-based approach to the markets, which might be unfamiliar to many.

Greg has also been wildly successful lately, nailing the top in stocks in January 2022 and the bottom last October and delivering multiple triple-digit-winning trades over the past 18 months for his subscribers.

Stocks have been in an uptrend for the past 10 months – yet they're showing weakness lately. And still, many folks in the markets are concerned about what lies ahead.

So for today's edition of the "late-summer series" we're having in the Digest this week, I wanted to catch up with Greg and get his current outlook and share it with you.

Below, you'll find a lightly edited transcript of our conversation. (Mostly, I'm leaving out our lament about being longtime disgruntled fans of the New York Jets. If you know, you know.)

We began back at the end of 2022...

Corey McLaughlin: All right, let's start with your "bottom" call last October. I remember sitting with you at our Stansberry Conference that month talking about the markets, and you were getting the sense it might be near...

Greg Diamond: I actually traded calls on Caterpillar (CAT) the day of the bottom. I remember that.

CM: And then it was a little bit iffy for a while after that, right?

GD: Well, what happened was – and this is a good discussion for subscribers, it's all about the time cycles for me – there was a period there where it was looking like the analog of 2000 to 2003. It was looking pretty bad if you think about the 2020 to 2023 that we could have, with another big leg lower as a possibility.

The first three months of this year were tough. It was a tough environment to make money as a long options trader. And the possibility loomed of another leg lower. But luckily I was able to see, based on technical analysis and especially time analysis, that the low was in... and we were going to have this huge bull market. Then once March ended [and the banking crisis passed], that's when I switched and just went completely bullish. And obviously, that turned out to be correct.

CM: But that was hard to say at the time. Recession talk, for example, was very loud earlier this year with a lot of pessimism in the market.

GD: As investors, we have 20/20 hindsight, but the market doesn't work like that. The market, especially stocks, definitely bonds, is a discounting mechanism. We've talked about this before, when everyone is saying, "Oh, the recession is going to come." That's not how things work. Things happen when people don't see it happening...

People were talking so much about the recession. It was the most anticipated recession of all time. But, no, that was in 2022. And guess what? Yeah, it was bad, but it wasn't anything like 2008. It was a mild inflation recession.

Look, [the consumer price index ("CPI")] went from 9% to 3%. It's still higher than it was, and there will be things that will be higher for a longer period of time because the Federal Reserve screwed up and the federal government screwed up during COVID, there's no doubt about that. But in terms of the stock market and the broader economy, it was resilient.

Looking at the present...

CM: So where do you think we are now in the markets? What are you telling subscribers? Is this a new bull market, an extension of the old bull market? Something else?

GD: It depends on your definition of those things. But in simple terms, yeah, we're in a bull market. Go look at a stock chart of the S&P 500, Nasdaq Composite Index, Dow Jones Industrial Average from after the major low in March 2009. It's not without its corrections. This is a... call it a "super bull market" since 2009.

And you can talk about all the quantitative easing and fiscal policy and monetary policy we've seen since then. I get it, but forget about the why. I'm focused on what the market is doing. Do you want to make money or do you not? You can scream and shout as loud as you want about why the market should do this or that, but the market is going to do what the market is going to do. As an unbiased trader and investor, what is the market doing? It's going up.

Look at Apple (AAPL), Nvidia (NVDA), or Advanced Micro Devices (AMD) from that time period between January and March 2020... The crash during that time is just a blip on a price chart now. Again, I'm not saying what the Fed and the government did was right. I'm saying, "What is the price action telling you?" It's telling you it's a super bull market. So that's where I stand.

Are the chickens going to come home to roost one day? Absolutely. There's no doubt about it. The debt is out of control. When does that game end? I don't know. But what I do know is that we're in a monstrous bull market.

CM: In your style of trading – based on technical analysis – you don't necessarily care about the "why." But let's talk about it for a little bit – I'm curious what you think. Why might we be in a bull market again at this point?

GD: I think the why is inflation went from 9% to 3%. It's still high, but let's do a little reverse analysis. Why was 2022 so bad? The Federal Reserve went on a monstrous rate-hiking cycle. Why? Because of inflation. And now inflation has come down...

There's still a lot of money sloshing around in the economy from the most expensive stimulus package of all time, both monetarily and fiscally, but inflation has come down. The jobs market isn't the best. The economy isn't the best, but now you have artificial intelligence coming to the forefront, which is why tech has outperformed.

You combine those different things and there you go. There are more bullish factors than bearish factors.

What may be next...

CM: What are you looking at now as near-term catalysts for market movement, one way or another?

GD: I think the Jackson Hole meeting [where Federal Reserve Chair Jerome Powell will make a speech on Friday]. The Federal Reserve has the opportunity to at least pause interest-rate hikes, and what's another 25 basis points if they decide to do that [at their next meeting in September]? I'm not sure if that really matters.

They're not doing 75 basis points. They're not doing 50. So, maybe we're slow and steady. The Fed wants to get inflation down to 2%. If it comes down to 3%, that's still pretty good. So then they might start to back off a little bit...

I look at this as a continued bull market for a while. 2024 is going to have some volatility, from what I'm seeing. You have a presidential election, for example, but this bull market is going to be intact for at least another two, maybe even four years.

The process...

CM: Let's talk about how you go about your work in Ten Stock Trader. What's your process? You wrote the other week about your time working a late night/early morning shift at a major hedge fund trading European markets early in your career. What's your day like now?

GD: It's really all about time and price. As a long options trader, I am always concerned with getting a trade right. I have to get my trades right in a certain amount of time and get the price direction right in a certain amount of time, which isn't very easy, which is why not a lot of people trade long options.

So what I'm looking at first is trends. I'm looking for opportunities to buy or sell based on price, and then I look for time factors, with Gann analysis, in which to do that and time my trades. And it doesn't happen all the time. On a weekly basis, I'm looking at setups, and then I'm alerting subscribers to, "Hey, this is what I'm looking at. These are potential scenarios." I'm not trading every day, but I'm analyzing every day.

My daily process is to go through the various indexes, the various important stocks, precious metals, interest rates, bonds, what's happening overseas, and then relaying that information to subscribers and saying, "This is what I'm thinking." I try to relay that in everything I publish so that subscribers can begin to see how I see things so they can begin to understand how I think. Because I want people to learn, not just follow my trades.

And I know that some people really don't care about that, and they just want the trade, which is fine. But at the end of the day, I would like people to learn my process because I have been successful at it for a very long time, and it's different than [what] anybody else uses (at least at Stansberry) in terms of analyzing time and price together.

And while investing for the long term is everyone's goal, I'm showing subscribers how to invest in the short term as well with my strategy.

CM: I've really picked up on that from reading your work over time, and I think subscribers have too. Speaking of that, I know you had an event recently where subscribers were able to meet you in person. I'm curious, did you receive any memorable feedback?

GD: Yes. The one that sticks out to me is a guy and his buddy that he dragged down from Philadelphia, who drove about two-and-a-half hours just to meet me. That's what really makes my job here at Stansberry such a great experience that I would have never gotten on Wall Street. He was a truck driver, makes whatever, and said, "You helped me upgrade my living room and helped my son buy his first house." That was really cool.

CM: That's awesome.

GD: It means a lot to me to help people navigate these markets. And to shake hands with someone and know you've made a difference in their lives – well, that is something I'll never forget.

CM: That's a great place to end. Thanks for the time, Greg.

GD: Thanks, Corey. Anytime.

New 52-week highs (as of 8/21/23): CBOE Global Markets (CBOE), Cameco (CCJ), Eli Lilly (LLY), Option Care Health (OPCH), and Sprott Physical Uranium Trust (U.U-TO).

In today's mailbag, more response to Dan's Friday Digest on temporary millionaires. If you have thoughts on our work – good, bad, or snarky – send them to feedback@stansberryresearch.com.

"I follow a number of Stansberry writers but [Dan Ferris'] Friday writing, which began with 'number of new millionaires in 2023' really struck me.

"It wasn't the millionaire numbers, but the one line 'Saving is the single most important skill for investing' that really got my attention! YES! YES! I grew up with a family of farmers and as a youngster I would overhear my elders talking about the many issues of farming. But mostly I remember my Grandfather would join these discussions with the phrase 'no matter the good or bad days we must always save for tomorrow.' As I grew older, I talked with him about 'saving' and of the many things said, he advised to save a quarter for every dollar I earned. Marriage and raising a family strained that but we managed.

"Fast forward to financial discussions with my wife (which happens about every three or four months) she commented early in our marriage that 'I guess we will always live with a Budget.' We can laugh about that today. We are retired now and live very comfortably. I thank my grandfather for his wisdom and Dan!" – Subscriber Dwight G.

"The whole point of buying anything (unless you’re shorting) is to buy at a low point, WHEN momentum is starting to shift to the upside (watch the MACD and the RSI), and then sell when momentum peaks out. I don’t care whether that’s AMC, Bed Bath & Beyond or AT&T, Microsoft, Tesla, whatever.

"If you get in at the right place, get a profit, put in a breakeven stop and then sell when momentum starts peaking (and it’s not that hard folks, just watch the charts), you can lock in profits. Anybody who rides things back down after being profit is a moron.

"I know people who bought NIO at 7.5, rode it to 66, and rode it back down to 7.5, without selling. That’s just stupid. An 800% profit, and you don’t take something off the table, and make the rest of the trade risk free? Then you deserve what you get. Same goes for anyone who speculates in any Meme stock. Or any stock for that matter. I have no sympathy for anyone who can’t take the time to learn a simple indicator (such as MACD or RSI), can’t be bothered with stop-losses or trailing stops, etc." – Subscriber Mark G.

All the best,

Corey McLaughlin with Greg Diamond
Baltimore, Maryland
August 22, 2023