(Note, the March 3 CASH signal was written starting on Feb 28 but sent on Mar 3. In my rush to get the report out before the close, the title was not updated.)
The recent downturn in stocks is due in part to new US tariffs. President Donald Trump has announced new tariffs on imports from major trading partners like Canada, Mexico, and China with retaliatory measures already taking place. These actions have sparked fears of escalating trade wars, which could negatively impact global trade, increase costs for businesses, and potentially lead to reduced consumer spending due to higher prices. The uncertainty around how these tariffs will affect the US and global economy has led to a significant sell-off which could continue since, beyond tariffs, there's worry about inflation, interest rates, and the broader economic health.
While those such as Jamie Dimon, CEO of JPMorgan, thinks the tariffs may cause some inflation, he believes it's good in the long run for the US. Maybe so, but the price to pay may be a global recession. This suggests major averages may have put in a major top. Of course, the pace of global liquidity which largely depends on inflation since inflation guides the hands of central banks will determine market direction, but it can lag markets so in the meantime, markets can continue to fall.
Nevertheless, should tariffs create recessionary conditions on a global level due to a trade war, central banks would be forced to print by lowering interest rates in a hurry as they have done in past recessions. This could suggest a short-lived recession depending on how much QE is utilized and how fast rates are reduced. Since 2008, central banks have not been gun shy about blasting the markets with QE during crises. The question is whether a recession would fall under that category. Nevertheless, in such a scenario, major averages could certainly undergo sharp corrections until additional QE in some form was launched.
List of Potential ETFs for investors:
1-times inverse
PSQ - NASDAQ 100 1x bear.
2-times inverse
QID - NASDAQ 100 2x bear.
3-times inverse
SQQQ - NASDAQ 100 3x bear.
NOTE: This is a suggested list. Investors may wish to become acquainted with the full range of available ETFs, and should make an effort to understand how these ETFs are created and what their components are, as well as being aware of the downside risks involved, especially with leveraged ETFs. Certain ETFs may be more appropriate depending on one's risk tolerance levels. Typing in keyword 'ETF' into the FAQ keyword search bar or going here https://www.virtueofselfishinvesting.com/faqs/search?p=1&q=etf and visiting this site https://etfdb.com/ can be instructive.