From Terrible To Worse

Stocks rolled over to start this week, with one of the worst sell offs of the year so far.

The trigger?  Another named excuse to sell.  Evergrande... a real estate company no one really knew until headlines started popping up potential trouble brewing.

"Evergrande Real Estate Group is the second largest property developer in China by sales."

Evergrange has some $300 billion in debt.   Thats almost half the size of TARP in 2008.  Wow.

Remember when $300 billion was a mind boggling amount of money?

Well... in 2020 we went from hundreds of billions being a lot of $$$  to $7+ trillion and counting....

The bailouts, spending, stimulus.... its reached ludicrous speed.

Trillions?  What after trillions....  10's of trillions?

Asset prices  can't keep rising forever... can they?

Evergande is just another name added to the list.

Named excuses to sell.

And sell they did earlier this week.  And perhaps we will retest those lows of this week in the near term.  But guess what?  Longer term this market will continue to do what its been doing, evergrande or not.

Go higher.  That's what its been doing.  That's the trend.  Taper talk, government shutdown talk, debt ceiling talk be damned.

Ironically all this bad news is good for the stock market down the road... well ...  its good if you equate good to higher stock prices.

For those rooting for a collapse of the stock market... they should be doing the exact opposite of what they've been doing every day for 10+ years and root for an economic boom and a daily dose of good economic news.

March 2020 was a perfect example of why terrible news is good news for asset prices.

And why this Evergrande will just be another bump in the road to new record highs.



Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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