Don here...
Professor Jeff Bierman is one of the smartest people I know.
So, when he says danger lies ahead, even when everyone else is in party mode, I stop and pay close attention.
And in today’s session, he highlighted three key items that should have EVERY trader concerned.
Warning Sign #1: The Seven-Year Car Loan Crisis
Cars are now so expensive that buyers need seven-year loans to afford them.
The average American can't afford basic transportation without extending payments to nearly a decade. That tells you everything about where real inflation stands.
Warning Sign #2: The Credit Quality Collapse
Here's the stat that should terrify you: US consumers with the highest credit scores are starting to fall behind on repayments for the first time since 2004.
We're talking about people with AmEx black cards missing payments. These aren't subprime borrowers. These are the most creditworthy people in America, and their repayment rates just hit a 20-year low.
Warning Sign #3: The Hard Hurdle Rate Crisis
Hard hurdle rates drive every move in this market right now. You just probably didn’t know it.
The S&P is up just 7.5% year-to-date, but hedge funds need 8% to hit their hard hurdle rate. Below 8%? No bonus. Zero.
That's why every dip gets bought. It's not confidence. It's desperation.
Jeff's Trades Right Now:
- Successfully shorted Cisco Systems after it broke the Genesis Cog channel
- Captured Yum Brands on a bearish engulfing pattern (up $3 in five days)
- Long CubeSmart as a defensive play ahead of the correction
The risk-reward setup Jeff described is "the best I've seen in probably a decade." When you're positioned for both scenarios, you're protected either way.
→ Watch the full session replay
The pause button is pressed. Nvidia earnings tomorrow will determine if we break higher or finally acknowledge what the data is screaming at us.
To your success,
Don Kaufman
Chief Market Strategist, TheoTRADE
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