Happy New Year!
Its time to welcome in a brand new trading season. As a 25-year trading floor veteran I know what that means
Everyone, and I mean EVERYONE always wants to know what Im hearing on the floor. People want to know the must-have stocks for 2018and the must-follow sectors.
So Ill cut to the chase and spill the beans right here. Consider this your 2018 insiders trade briefing
If we havent met before, allow me to introduce myself.
My name is Alan Knuckman. Like I said, Ive spent the last 25 years on the trading floor. Starting in 1991, I worked my way up the ranks from being a runner, phone clerk and broker
All the way up to becoming a professional trader and a member of the Chicago Board of Trade.
Today, some folks at home might even recognize me from one of my appearances on Bloomberg, CNBC, CNN or Fox News.
But more importantly, 2017 was a fantastic year for traders. For instance, one of the premium research services I publish, The 42 Day Retirement Plan, went an astounding 11 for 11 on closed trades in 2017.
Those are serious results, if I do say so myself. And you know whats really crazy? I think 2018 could be even hotter…
So let me to share a few of my 2018 predictions with you today. Lets get to it
2018 Prediction #1 — The Dow Will Reach 30,000
Thats right, I expect the second longest bull market in history to continue into this new year. I know youre constantly hearing talk of a bubble, but I think much of that fear is mislaid.
The Dow Jones Industrial Index is now within 21% of the 30,000 milestone which is very achievable after returning 25% in 2017.
With earnings season on the horizon, it won’t be long before the Dow trades through that level. In fact, the last two earnings seasons have produced historically high numbers and I expect the figures announced this month to be even higher due to the projections that include the new tax law.
So dont take yourself out of the game now, this bull market has still got legs.
Because the Dow is a price weighted index, look for high priced (but low valued) stocks to get us to that $30,000 mark. One that I have my eye on right now is Goldman Sachs (GS).
Remember, any bearish market predictions have been squashed since 2009. And here in 2018 theres no reason to go out on a limb and call a top. The trend is moving higher…keep on profiting while it does!
2018 Prediction #2 — Mergers and Acquisitions (M&A) Will Heat Up
In December alone…
Disney acquired major assets from 21st Century FoxCampbell Soup bought snack-maker Snyders-Lance Inc.Boeing announced theyre in talks to acquire Brazilian rival EmbraerAnd Penn National Gaming bought Pinnacle Entertainment
Along with many other major deals.
This is an extremely healthy sign for the market. It tells us that companies do not believe there is an upcoming market correction. Otherwise, they would wait to acquire these companies at a cheaper price in the future.
And with the Republican tax plan now allowing corporations to repatriate trillions of dollars in overseas cash, expect much of it to be used for mergers and acquisitions.
2018 Prediction #3 — The Oil Rally Continues
WTI crude oil just passed $60 per barrel for the first time since 2015 and I believe this is just the beginning.
As my paid-up readers know well, once the $45 to $55 trading range was broken on the high side, $65 became the new trading target — and I expect that mark to be reached in the near-term.
But there are also some fundamental factors that should buoy oil prices in 2018…
OPEC agreed to continue production cuts through 2018.Unrest in the Middle East continues to boil over.Growing wages in emerging markets means millions of consumers are now entering the auto market for the first time (and theyre not buying Teslas).
Stick with oil.
2018 Prediction #4 — Its All About The Dollar (Decline)
The U.S. Dollar Index was down 8.5% last year due to rising political uncertainties, interest rates remaining low and a strengthening European economy.
And this is a trend that I expect to continue into 2018. Thats because the initial fall in the Euro currency was greatly exaggerated in the first place which has sparked its 2017 upturn.
Right now, the Euro/USD spot price is around $1.20 but Ive got a breakout target set at $1.25 — meaning the dollar should continue to fall.
But this is not a bad thing!
A lower dollar will serve as both a catalyst for the energy and mining sectors while also propelling earnings of U.S. corporations that sell goods and services overseas (this is because overseas profits will be exchanged back into more U.S. dollars).
2018 Prediction #5 — Infrastructure Is In
Trump’s historic tax cuts will boost most American corporate earnings lines by at least 20% in 2018 — sending stocks soaring still from their current levels. And that’s just the beginning.
The administration’s next big item on the legislative agenda is already taking shape
I’m talking about the President’s plan to pour more than a trillion dollars into fixing the country’s crumbling infrastructure.
Like everything else in Washington, it won’t come easy. But if the White House can score a win on infrastructure, the market’s gains will come fast and furious.
One infrastructure play that I recommended to my readers is Freeport-McMoRan Inc. (FCX)… and since we bought were up over 15%…
Copper steel basic materials they could all boom in early 2018.
Bonus 2018 Prediction #6 — A Shameless Plug, With Endless Upside
As Ive hinted, my research advisories had FANTASTIC performance in 2017. It was a banner year for us…the economy stocks… and America.
And as you can tell from the predictions above, I think theres still massive room for more sectors and stocks to rally.
So Ill add a shameless plug
Right now were on the precipice of what could be the biggest market opportunity in a generation. And a brand new round of money-making market spikes are set to start
I call these short (but potentially profitable) timeframes retirement windows…
Simply put, you could make enough in a few weeks to help boost your retirement to the next level.
For the full story on this HUGE opportunity, click here right now.
Look, the biggest rule in trading is this: Markets can always go a lot higher than you think, and a lot lower than you think.
How many times over the past several years have you heard that stocks are massively overpriced by historical standards, that they just couldnt go any higher?
People have been talking about the top in the market since 2009. And its essentially gone straight up.
Think of how much opportunity you would you have missed out on if you followed this doomsday narrative for the past several years.
Look, I cant disagree that stocks are extremely expensive by certain metrics. But theyve been overpriced by those same metrics for a long time now. And stocks continue to climb, whether you think they should or not.
Theres no fundamental reason why stocks wont continue to climb. Remember, markets can always go a lot higher than you think.
It might not always make sense to you. But markets dont always make sense nor do they have to.
This market is offering incredible opportunities right now, and I fully encourage you to take advantage while it lasts.
Heres to a profitable 2018 trading season,
for The Daily Reckoning