In his podcast addressing the markets today, Louis Navellier offered the following commentary.
If you wish to listen to this commentary, please click here.
The big news this week is President Joe Biden will address the nation Wednesday to announce another big release from the Strategic Petroleum Reserve (SPR) that will persist through December in a desperate attempt to manipulate crude oil prices just ahead of the mid-term elections.
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Representatives of the Biden Administration have also signaled that they will start refilling the SPR when crude oil hits $70 per barrel.
The reaction on Bloomberg TV was “since when did the Biden Administration decide to get into the commodity trading business and set a floor on crude oil prices.” The truth of the matter is the Biden Administration is running out of ways to manipulate crude oil prices as they drain the SPR to 1980 levels.
Energy markets like to look ahead and (1) strong seasonal demand in the spring, (2) Europe is still striving to shore up its 2023 energy supplies and (3) a resurgence in China as well as other major economies will put more upward pressure on crude oil demand.
As a result, I do not expect that crude oil will hit $70 per barrel, so the SPR will remain depleted due to the Biden Administration’s mismanagement.
End of Bear Market?
We have had five significant short covering rallies this month that are signaling the end of a bear market. Before October, the S&P 500 had fallen 25% from its previous highs and there have been nine similar drawdowns since 1928.
Bespoke Investment Group documented that after each of these big drawdowns, when the turnaround commenced as it has done in October, the average gain was 15.2% in the first month, 31.6% in the first three months, and 33.2% in the next six months.
Additionally, we documented that after the NASDAQ 100 (QQQ) surged 3% three days in a row, the QQQ average return since October 2002 was 17% in six months, 31% in nine months, 43% in 12 months, and 64% in 24 months.
Will History Repeat?
Despite these amazing historical statistics that we are likely in the midst of a massive market rebound, Jim Cramer advised investors to sell stocks this week as earnings season continues.
Specifically, Cramer last Friday said “The market’s dominated by the tick, tick, tick of bonds, oil and the dollar. So, remember, if we have a big up day like yesterday, that is a chance to do some (selling) because there probably won’t be any follow-through.”
If like Cramer, you are worried about inflation and want to flee the stock market, then you might be out of the stock market for decades, since inflation is expected to persist until common sense returns to our elected leaders.
More Americans now believe in aliens. Where just 20% of Americans thought that UFOs are probably either an alien ship or alien life form in 1996, the figure has crept up to 34% in 2022, according to a survey.
A majority also said that aliens are likely to be far more technologically advanced than humans, with more than a third of respondents saying they thought aliens would even be hostile toward our species. Source: Statista. See the full story here.