Investing Insights
Our most popular feature by far, Investing Insights unleashes the experienced minds of Jon and our team, sharing exclusive information & education we believe smart investors should know BEFORE risking funds in current markets. We share fresh insights at least weekly -- but sometimes more frequently -- as our proprietary economic and technically-driven models & indicators flash bull, bear, turning points, risk flags, wobbles, bubble alerts, accelerating profit opportunities and much, much more. Our members can learn a great deal from this section and it can help both grow AND preserve your nest egg and trading profits. Since you won’t find these insights anywhere else on the web, we encourage you to bookmark this feature and check back often.
BEAR MARKET WATCH March 23, 2023 Jon Wolfenbarger
What Could Go Wrong With Fed Tightening Into A Banking Crisis And Recession?
ANTWERP, BELGIUM — As expected, Jay “Transitory Inflation” Powell raised the Federal Funds rate by 0.25% to 4.75%-5.00% and reiterated the Fed’s plans to continue to shrink their balance sheet with “Quantitative Tightening”.
Powell said rate cuts are not in their base case and the Fed “anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”
The Fed reiterated their expectations for the Federal Funds rate to end 2023 at 5.1%, the same as their expectation in December. However, they raised their Federal Funds rate expectation for year-end 2024 from 4.1% to 4.3%, which signals rates being “higher for longer”, which is more hawkish than expected.
Acknowledging the banking crisis they helped create, the Fed said “Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain.”
Powell said he still thinks a “soft landing” (i.e., no recession) is “possible”, but the longer the banking crisis lasts, the lower the chances will be. In other words, don’t bet on it!
Meanwhile, Treasury Secretary Janet “Free Lunch” Yellen reiterated the government does not plan to support bank stocks and bonds, saying ”It’s important to be clear: shareholders and debtholders of the failed banks are not being protected by the government”. She also added "no losses from the resolution of these banks are being borne by the taxpayer,” which raises the question of who will be paying for the free lunch to bail out banks from this crisis.
The market currently estimates a 52% chance of another 0.25% hike in May and a 48% chance of no hike. We’ll see how that changes as the banking crisis and recession unfolds.
Leading Economic Indicators Continue To Flash Recession Warning
The Conference Board’s Leading Economic Indicators (LEI) continue to warn of an impending recession and they do not yet reflect the emerging banking crisis.
Justyna Zabinska-La Monica, Senior Manager of Business Cycle Indicators at The Conference Board, explained their latest LEI report:
“The LEI for the US fell again in February, marking its eleventh consecutive monthly decline. Negative or flat contributions from eight of the index’s ten components more than offset improving stock prices and a better-than-expected reading for residential building permits. While the rate of month-over-month declines in the LEI have moderated in recent months, the leading economic index still points to risk of recession in the US economy. The most recent financial turmoil in the US banking sector is not reflected in the LEI data but could have a negative impact on the outlook if it persists. Overall, The Conference Board forecasts rising interest rates paired with declining consumer spending will most likely push the US economy into recession in the near term.”

Source: https://www.conference-board.org/topics/us-leading-indicators
Many “experts” say a recession is virtually impossible given the continued growth of GDP. But GDP is not a leading indicator of recession.
As the following chart shows, the LEI (blue line) historically signals recessions long before GDP growth (gray line) turns negative. In fact, GDP growth never turned negative in the early 2000s recession, when the NASDAQ fell over 80%. Note that GDP growth has already slowed to levels seen in the first part of the early 2000s and 2008-2009 recessions.

Source: https://www.conference-board.org/topics/us-leading-indicators
Industrial Production Is Now Declining
The Industrial Production Index is one of the key coincident indicators of the business cycle. It measures real output in the manufacturing, mining and utilities industries and is produced monthly by the Federal Reserve.
The leading indicators predicted Industrial Production would decline as a recession starts. Like clockwork, Industrial Production is now declining (albeit only -0.25% so far), as it typically does at the beginning of a recession, as shown in the graph below (with recessionary periods shaded gray).

Stocks Are On The Precipice
Despite a banking crisis and signs of a recession, the S&P 500 is only down 17% from its peak in early 2022, after having fallen 28% through mid-October. Incidentally, every single time the S&P 500 has fallen that much over that length of time, there was a recession. But there has been a lot of back-and-forth churning in the market in recent months and the S&P 500 is still where it was in May of last year. This has been frustrating for both bulls and bears.
As the following chart shows, the 36-month moving average (36-mma) usually provides support for stocks in pullbacks…except when there is a major bear market, such as in the early 2000s and 2008-2009.
The S&P 500 broke below the 36-mma in September, but bounced back above it in October. It is currently about 1% above the 36-mma. A clear break below it will likely signal significant downside to come, as it did in the last two major bear markets.

Implications For Investors
The Fed continues to tighten monetary policy with rate hikes and Quantitative Tightening, despite the banking crisis and signs of a recession. This is the opposite of their behavior during the major bear markets of the early 2000s and 2008-2009, when they slashed interest rates in vain.
As a result, we believe much more stock market downside potential exists, which will likely occur after the S&P 500 decisively breaks below its 36-mma.
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BANKING CRISIS March 13, 2023 Jon Wolfenbarger
Banking Crisis Implications For Investors And The “Softish Landing” Dream
RISING INTEREST RATES March 3, 2023 Jon Wolfenbarger
Do Investors Understand What Happens When Interest Rates Rise?
RECESSION WATCH February 26, 2023 Jon Wolfenbarger
8 Stages Of Recession Point To Crash Landing, Not “Softish Landing” (Part 2)
RECESSION WATCH February 22, 2023 Jon Wolfenbarger
8 Stages Of Recession Point To Crash Landing, Not “Softish Landing” (Part 1)
EARNINGS OUTLOOK February 12, 2023 Jon Wolfenbarger
Wall Street Bullishness Unfazed By Recessionary Earnings Outlook
MARKET OUTLOOK February 2, 2023 Jon Wolfenbarger
Powell Fuels Stock Rally With Hopes For A “Softish Landing”
RECESSION WATCH January 26, 2023 Jon Wolfenbarger
Credit Card Crisis Coming As Layoffs Mount (Part 2)
RECESSION WATCH January 22, 2023 Jon Wolfenbarger
Credit Card Crisis Coming As Layoffs Mount (Part 1)
INFLATION WATCH January 12, 2023 Jon Wolfenbarger
Headline Inflation Slowed, But High Underlying Inflation Keeps Fed Tightening
RECESSION WATCH January 4, 2023 Jon Wolfenbarger
Money Supply And Manufacturing Declines Add Fuel To The Bear Market Fire
STOCK MARKET OUTLOOK December 27, 2022 Jon Wolfenbarger
Can Investors Handle The Truth…About Stock Market Downside Potential?
BEAR MARKET SELLOFF December 18, 2022 Jon Wolfenbarger
Powell “Pivot” To “Pain” Kicks Off Next Major Bear Market Selloff
RECESSION WATCH December 12, 2022 Jon Wolfenbarger
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INFLATION RISK December 7, 2022 Jon Wolfenbarger
Fed Likely Forced To Fight High Inflation For Many Years To Come
BEAR MARKET UPDATE November 29, 2022 Jon Wolfenbarger
Bullish Sentiment Signals Major Stock Selloff Likely Coming Soon
EARNINGS ESTIMATES November 19, 2022 Jon Wolfenbarger
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BEAR MARKET RALLY November 11, 2022 Jon Wolfenbarger
Inflation “Beat” Causes Investors To Forget The 4 Most Dangerous Words In Investing
BEAR MARKET DURATION November 3, 2022 Jon Wolfenbarger
How Long Will This Bear Market And Recession Last?
BEAR MARKET LOSSES October 25, 2022 Jon Wolfenbarger
3 Ways To Estimate Stock Bear Market Downside Potential
INFLATIONARY BEAR MARKET October 17, 2022 Jon Wolfenbarger
Accelerating Inflation Creates Stock Bear Market Opportunities
BEAR MARKET INDICATORS October 9, 2022 Jon Wolfenbarger
Is The Stock Market About To Crash?
GOVERNMENT DEBT WATCH October 3, 2022 Jon Wolfenbarger
The US Government Is Heading Toward A Major Debt Crisis
BEAR MARKET INTENSIFIES September 24, 2022 Jon Wolfenbarger
The Fed Pivots To Even More “Pain” For Stocks And The Economy
FED WATCH September 14, 2022 Jon Wolfenbarger
High Inflation Continues To Force Fed To Cause “Pain”
COMMODITIES September 5, 2022 Jon Wolfenbarger
Oil And Commodities Bear Market Is Likely Just Beginning
RECESSION WATCH August 28, 2022 Jon Wolfenbarger
Powell’s “Pivot” And The Top 10 Signs Of An Impending Recession
HOUSING WATCH August 17, 2022 Jon Wolfenbarger
Housing Bear Market Will Help Cause Great Recession 2.0
BEAR MARKET WATCH August 9, 2022 Jon Wolfenbarger
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RECESSION WATCH July 31, 2022 Jon Wolfenbarger
Fed Rate Hike + Negative GDP = Stock Market Rally
BEAR MARKET WATCH July 22, 2022 Jon Wolfenbarger
It’s Like 2008 All Over Again, But Likely Worse
BEAR MARKET RISK July 13, 2022 Jon Wolfenbarger
Here Is Why Stocks Will Likely Fall Another 40%+
DISINFLATION TREND July 5, 2022 Jon Wolfenbarger
From Inflation To Disinflation: Impact On Stocks, Bonds, Commodities And Bitcoin
COMMODITIES WATCH June 27, 2022 Jon Wolfenbarger
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RECESSION WATCH June 23, 2022 Jon Wolfenbarger
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BEAR MARKET TECHNICALS June 19, 2022 Jon Wolfenbarger
How To Spot Stock Bear Market Selloffs And Rallies
BULL VS BEAR June 9, 2022 Jon Wolfenbarger
Three Key Reasons This Is A Bear Market Rally, Not A New Bull Market
INVESTING RISKS June 1, 2022 Jon Wolfenbarger
The Biggest Risk Investors Face In Coming Years
RECESSION SIGNS May 23, 2022 Jon Wolfenbarger
Central Planning Disaster…The Fed Is Hiking Rates Into A Recession
BULL VS BEAR May 15, 2022 Jon Wolfenbarger
3 Reasons Bear Market Rally Could Continue, Despite Recessionary Signs
BEAR MARKET SIGNS May 7, 2022 Jon Wolfenbarger
Bear Market Rules Apply…Sell The Rallies Instead Of Buying The Dips
BEAR MARKET SIGNS April 28, 2022 Jon Wolfenbarger
This Is Not Your Father’s Stock Bear Market
BONDS AND COMMODITIES April 21, 2022 Jon Wolfenbarger
Outlook For Bond And Commodity ETFs In The Coming Recession
SECTOR TRENDS April 12, 2022 Jon Wolfenbarger
Stock Sector Performance Is Warning Us About The Market’s Direction
FED WATCH April 8, 2022 Jon Wolfenbarger
Can The Fed Predict Anything?
RECESSION WATCH April 4, 2022 Jon Wolfenbarger
Recession And Bear Market Countdown Has Started
FED WATCH April 1, 2022 Jon Wolfenbarger
The Fed Can’t Control The Economy, But They Do Lower Living Standards
LONG-TERM RETURNS March 27, 2022 Jon Wolfenbarger
Will The Stock Market Really Be 50%+ LOWER In 12 Years?
BULL VS BEAR March 20, 2022 Jon Wolfenbarger
Strong Stock Rally Last Week, But Evidence Remains Bearish
BEAR MARKET SIGNS March 10, 2022 Jon Wolfenbarger
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ETF TRENDS March 2, 2022 Jon Wolfenbarger
War Is Helping Fuel The Commodity ETF Bull Market
BEAR MARKET SIGNS February 21, 2022 Jon Wolfenbarger
Warning: Widespread Shift To Bearishness Across Most Stocks And ETFs
SECTOR TRENDS February 17, 2022 Jon Wolfenbarger
Current Best And Worst Stock Sector ETFs
PROFIT FROM INFLATION February 9, 2022 Jon Wolfenbarger
How To Profit From Inflation With ETFs
INTEREST RATES AND STOCKS February 1, 2022 Jon Wolfenbarger
Proof That Major Stock Bear Markets Can Start Without Rising Interest Rates
BULL VS BEAR January 24, 2022 Jon Wolfenbarger
Stock Market Crashing: Bull Market Correction Or Bear Market Beginning?
FED WATCH January 18, 2022 Jon Wolfenbarger
What Fed Rate Hikes Can Do To Stocks And ETFs In 2022
STOCK MARKET INDICATORS January 8, 2022 Jon Wolfenbarger
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LEADING ECONOMIC INDICATORS December 31, 2021 Jon Wolfenbarger
2022 Perfect Storm: Global Slowdown + Fed Tightening?
SECTOR TRENDS December 20, 2021 Jon Wolfenbarger
Current Best And Worst Stock Sector ETFs For Long-Term Trend And Short-Term Trade
ASSET TRENDS December 13, 2021 Jon Wolfenbarger
Current Best and Worst ETFs For Long-Term Trend and Short-Term Trade
BULL AND BEAR TECHNICALS December 5, 2021 Jon Wolfenbarger
Holiday Sales Continue On Stocks and “Risk-On” ETFs
BULL AND BEAR TECHNICALS November 27, 2021 Jon Wolfenbarger
“Red Friday” Sale On Stocks And Most ETFs
FED WATCH November 19, 2021 Jon Wolfenbarger
The Market Says Interest Rate Hikes Are Coming, Whether The Fed Likes It Or Not
COMMODITIES November 11, 2021 Jon Wolfenbarger
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BULL VS BEAR November 4, 2021 Jon Wolfenbarger
Bull Market Continues, But Stocks Will Likely Be 50%+ Lower In 12 Years!
BEATING THE MARKET October 26, 2021 Jon Wolfenbarger
Why Mutual Funds Don’t Work
CRYPTOCURRENCIES October 19, 2021 Jon Wolfenbarger
Bull Case For Bitcoin ETFs — And The Best One To Buy Now
BULL AND BEAR TECHNICALS October 11, 2021 Jon Wolfenbarger
The Stock Market Is Weakening More Than Most Stock And ETF Investors Realize
BEAR MARKET PROFITS September 30, 2021 Jon Wolfenbarger
How To Trade ETFs To Maximize Bear Market Profits
BEAR MARKET PROFITS September 22, 2021 Jon Wolfenbarger
How To Identify Bear Markets With ETFs And Basic Technical Analysis
BEAR MARKET PROFITS September 19, 2021 Jon Wolfenbarger
How To Make Money -- Instead Of Lose Money -- In A Stock Bear Market
ETF STRATEGY September 16, 2021 Jon Wolfenbarger
Proof That ETF Strategies Using Technical Analysis Significantly Beat “Buy And Hold” Investing
BULL AND BEAR TECHNICALS September 10, 2021 Jon Wolfenbarger
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BEATING THE MARKET September 1, 2021 Jon Wolfenbarger
Three Ways To Beat The Market With Stocks And ETFs
BEAR MARKET RISK August 28, 2021 Jon Wolfenbarger
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ETF TRENDS August 26, 2021 Jon Wolfenbarger
These Popular ETF “Inflation Hedges” Are Now Moving In Opposite Directions
ETF STRATEGY August 24, 2021 Jon Wolfenbarger
What Smart ETF Investors Need To Understand About Bitcoin, Gold and Stocks
SECTOR ETFS August 19, 2021 Jon Wolfenbarger
Sector ETFs With The Best and Worst Earnings Growth In 2021 and 2022
ECONOMICS 101 August 12, 2021 Jon Wolfenbarger
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MONEY MISCHIEF August 9, 2021 Jon Wolfenbarger
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BULL AND BEAR TECHNICALS August 7, 2021 Jon Wolfenbarger
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MONEY MISCHIEF July 31, 2021 Jon Wolfenbarger
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STOCK MARKET TREND July 24, 2021 Jon Wolfenbarger
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STOCK MARKET SENTIMENT July 20, 2021 Jon Wolfenbarger
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STOCK MARKET WARNING July 14, 2021 Jon Wolfenbarger
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ASSET TRENDS July 9, 2021 Jon Wolfenbarger
What Major Asset (and ETF) SURPRISINGLY Has The Most Bearish Trend Right Now?
INFLATION DANGERS June 30, 2021 Jon Wolfenbarger
3 Reasons ETF And Stock Investors Must Prepare To Profit From Rising Inflationary Pressures
DEBT DANGERS June 23, 2021 Jon Wolfenbarger
The Government Debt Bomb Could Decimate Stock And ETF Investors Who Are Not Prepared
BULL AND BEAR TECHNICALS June 15, 2021 Jon Wolfenbarger
What This Proven Indicator Is Telling Us About The Stock Market And Economic Trend
BOOM AND BUST INDICATORS June 8, 2021 Jon Wolfenbarger
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BOOM AND BUST INDICATORS June 1, 2021 Jon Wolfenbarger
How To Use The Yield Curve To Profit From Booms And Busts
CREATING WEALTH May 25, 2021 Jon Wolfenbarger
How To Achieve Financial Freedom By Investing In ETFs And Stocks
FREE MARKET INSIGHTS May 19, 2021 Jon Wolfenbarger
How Successful Stock And ETF Investing Benefits Society By Creating Wealth
CRYPTOCURRENCIES May 13, 2021 Jon Wolfenbarger
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BULL AND BEAR TECHNICALS May 6, 2021 Jon Wolfenbarger
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BULL AND BEAR TECHNICALS April 30, 2021 Jon Wolfenbarger
Why Smart Stock Traders Always Use The 250-Day Moving Average