Home 2020 Marty Zweig: “Don’t fight the Fed and Don’t fight the Tape”

Marty Zweig: “Don’t fight the Fed and Don’t fight the Tape”



From Marty’s advice I minted my own that I have closed nearly every weekly Redroadmaster Report for the past 22 yrs: “Always take what the market gives.” Often followed by: “Tune out the Noise!

What that means

Don’t fight the Fed means that you cannot fight a Fed boss who intends to get the stock market going. Last week Fed Chairman Powell assured investors there will be no more bankruptcies; no more lost jobs from public companies because they do not have the money because they can go to the credit markets, ask for money, and the Fed will give it to them.

In the Great Recession people were worried about banks failing and they did until finally, after most of the Big 1’s disappeared or were on the ropes, Dr. Bernanke finally stepped up and said he would not let anymore banks collapse.

Now Chairman Powell’s not only insuring the banks are going to make it but he is also insuring their larger clients are going to make it too.

Plus, what came up loud and clear is that those who contracted the C-19 coronavirus and who needed help to breathe, the sickest people, benefited from an off the shelf steroid that costs $1.00 a pill. Great news.

Next, Marty’s Don’t fight the tape dictum.

The tape is this: the living action happening in the market on any a given day. Then we got a 17.7% increase in the retail sales, which means that the aid/relief/stimulus is being spent.

That changes some sidelined sentiment with a lot of money looking for a home to buy stocks, because they know The Trump Fed is not going to raise rates, Wall Street likes the certainty of Cheap Money.

So now The People and the professionals are not fighting the tape.

Whether it be new retail buying cruise ships, airlines and low dollar energy or any issues that had no reason to be bought, hang on there is the hint of a $1-T infrastructure bill, and customers are returning to once closed stores, thus creating a tape that 1 cannot fight for fear of being left out.

There is nothing certain about either directives, you have to have faith in the market’s history, optimism is Key, take what the market gives.

Tune out the Noise

If you listened listened to the some of the Top money managers like Ray Dalio, Bill Ackman or Stan Druckenmiller, they said that this is the most dangerous stock market ever, steer clear, else you with get a short haircut.

But, if you bought when those gurus told you to get out, you made a fortune.

And now we have moms and pops and young investors piling to the market and doing very well, oblivious to the advise of those who have made so much money that they have lost touch with what makes stock markets work.

The young investors are trashing Warren Buffett, a loud voiced seller, not a buyer, in the waterfall, by buying the airline stocks he so publicly sold. And they are making lots of money.

So, know what, this action does not end badly, as the Trump, Fed, Treasury and Congress will not let it.

So, play the White House Trade, let your winners run…cut losers fast.

Daily you will find trading tips and buy recommendations in our Sitting on a Cash Pile column, click here, the record is strong, the research deep, the convictions solid.

Have a healthy day, Keep the Faith!

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Paul A. Ebeling, a polymath, excels, in diverse fields of knowledge Including Pattern Recognition Analysis in Equities, Commodities and Foreign Exchange, and he is the author of "The Red Roadmaster's Technical Report on the US Major Market Indices, a highly regarded, weekly financial market commentary. He is a philosopher, issuing insights on a wide range of subjects to over a million cohorts. An international audience of opinion makers, business leaders, and global organizations recognize Ebeling as an expert.