Real Estate Showing Signs Of Collateral Damage – Part IV
This final part of our multi-part Real Estate article should help you understand what will likely transpire over the next 6+ months and how the unknown collateral damage may result in a “Double-Dip” price event taking place before August/September 2020. In the first three parts of this article, we’ve attempted to highlight how the current COVID-19 virus event is different than any of the previous two crisis events.
We’ve also highlighted how consumer psychology will change over the next 12+ months as this event continues to unfold. Most importantly, we attempted to highlight how the disruption in income, one of the biggest factors we should consider, for businesses, individuals, states, and governments will likely present a very real contraction event over the next 24+ months.
It is difficult to really explain how so many people fail to see what we are seeing in terms of our research. Yes, the COVID-19 virus event will end at some point and the economy will begin to engage at growing rates. Yet, the process of getting to that stage is likely to be full of unknown economic events over the next 24+ months.
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We’ve published articles suggesting our Super-Cycles and generational cycle research suggests we have entered a 10 to 20 year period of “unraveling and crisis processes” before a rebuilding phase can begin to take place. If our research is correct, this unraveling and crisis phase will end near 2025~26. This suggests we have another 5+ years of unknown collateral damage and unknown economic events
On February 24, 2020, we published this article which is very important because it warned our followers to prepare for a crisis event and to protect your portfolios with what to expect in the yield curve.
Our suggestion is to plan to set up your portfolio so you have sufficient cash in reserve in the event of an unexpected market decline. We also suggest proper protection/hedge investments, such as precious metals and metals miner ETFs.
The reality is that mortgage delinquencies have already begun to skyrocket higher. It is obvious to anyone paying attention that the lack of real income opportunities for individuals and businesses will translate into major economic collateral damage processes (crisis events) playing out over the next 12+ months. Depending on how the COVID-19 virus lingers throughout the world and the extent of the global shutdowns, we could be on the cusp of experiencing one of the biggest “revaluation events” in history.
This Bloomberg article summarizes our research and thinking nicely. Despite government support, we believe a massive revaluation event related to Real Estate and other assets is just starting to unfold. Skilled technical traders will stay keenly aware of this potential event and position their portfolios to protect assets in the event of a sudden change in trend.
Price trends have just started to move lower based on this data from Realtor.com up to March 2020. We believe the April and May data will show a substantial collapse in pricing levels – particularly in areas that continue to experience high COVID-19 issues. This suggests California, Washington, New York, New Jersey, Florida, and other areas could experience a sustained price decline lasting more than 12to 24 months.
Florida Real Estate Price Trends
Washington Real Estate Price Trends
Watch as more populated areas (cities and larger regional areas) see a shift in consumer sentiment related to Real Estate price levels over the next 6+ months. Once the consumers start shifting away from seeing Real Estate as an opportunity at any price and begin to watch the price levels drop, their psychology changes in terms of “when will the bottom happen?”. Once this happens, the markets change into a Bear market trend for real estate as at-risk homeowners are placed under severe pricing pressure and markets continue to implode.
What this means for skilled technical traders is that opportunities will be endless over the next 12+ months to target real gains through skilled technical trades. As capital shifts from one sector to another – avoiding risk and attempting to capitalize on the opportunity, skilled technical traders will be able to ride these trends and waves to create substantial gains.
Protect your portfolios now. Don’t fall for the overly optimistic “follow the NQ higher” trade as risks are still excessive. Wait for the right setups and determine how much risk you can afford to take on each trade. This is not the time to bet the farm on one big trade – wait for the right setups and wait for the collateral damage to play out.
It doesn’t matter what type of trader or investor you are – the move in Gold and the major global markets over the next 12+ months is going to be incredible. Gold rallying to $2100, $3000 or higher means the US and global markets will continue to stay under some degree of pricing pressure throughout the next 12 to 24 months. This means there are inherent risks in the markets that many traders are simply ignoring.
I keep pounding my fists on the table hoping people can see what I am trying to warn them about, which is the next major market crash, much worse than what we saw in March. See this article and video for a super easy to understand the scenario that is playing out as we speak.
If you want to learn more about the Super-Cycles and Generational Cycles that are taking place in the markets right now, please take a minute to review our Change Your Thinking – Change Your Future book detailing our research into these super-cycles. It is almost impossible to believe that our researchers called this move back in March 2019 in our book and reports.
If you have been following me for a while, then you know my analysis and trades are the real deal. You also would know that I made over $1.9 million from the financial markets during the 2008 crash and recover into 2010. I have been semi-retired since the age of 27. I continue to follow, predict, and trade the markets because its the ultimate business and my passion.
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As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders. Don’t miss all the incredible moves and trade setups.
Subscribers of my ETF trading newsletter had our trading accounts close at a new high watermark. We not only exited the equities market as it started to roll over in February, but we profited from the sell-off in a very controlled way with TLT bonds for a 20% gain. This week we closed out SPY ETF trade taking advantage of this bounce and entered a new trade with our account is at another all-time high value.
I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.
We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.
If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.
Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.
Chris Vermeulen
Chief Market Strategies
Founder of Technical Traders Ltd.
