‘We’re In Trouble’: Trader Warns Interest Rates to Surge, Destory Stocks | Todd Horwitz
TL;DR
Trader Todd Horwitz warns that despite markets rallying on the Iran deal resolution, underlying economic deterioration and Federal Reserve rate hike expectations create a dangerous setup where investors should take profits and prepare for significant downside in stocks and oil.
⚠️ Economic Warning Signs 3 insights
Consumer debt crisis accelerating
Over 13% of credit card holders are 90 days past due, 6% are defaulting on auto loans, and 4% on mortgages as job losses mount.
Real unemployment remains elevated
True unemployment measured by U6 stands at approximately 8.5%, with jobs-to-population ratios showing continued deterioration despite official headline numbers.
Fed pivoting back to hikes
Markets are pricing in a 60% probability of rate hikes with no further discussion of cuts, creating headwinds for equity valuations.
📉 Trading Strategy & Market Timing 3 insights
Prepare to short the rally
Horwitz is waiting to short the NASDAQ and S&P 500, expecting a 5-10% correction after the current Iran-deal euphoria fades and thin holiday volume ends.
Take profits on strength
Traders should lock in gains during the current rally rather than chase prices higher, as parabolic moves above 8,000 on the S&P would present automatic selling opportunities.
Avoid new long positions
With triple witching expiration and artificially light volume distorting price action, Horwitz recommends sitting on sidelines with new capital until clearer short setups emerge.
🛢️ Energy & Commodities 3 insights
Oil heading to $60s
Maintaining short positions from $110-115, Horwitz expects crude to reach the $60s by year-end due to overwhelming domestic supply glut and would short again at $85.
Gasoline prices peaked
National average gas prices will not sustain levels above $4.60 and have likely reached annual highs as panic buying subsides and strategic reserves remain ample.
Gold and silver bottomed
Precious metals have completed their corrections with gold finding support at $4,056 and potentially rallying to $5,500-$6,000, making them the preferred long positions.
Bottom Line
Take profits on the current Iran-deal rally and prepare to short equities on any parabolic move higher, while maintaining exposure to precious metals and avoiding new long positions in overbought tech stocks.
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