The market reaction to the European Central Bank’s announcement that they are going full throttle on stimulus tells you everything you need to know about where we find ourselves.
European stocks, along with the euro, couldn’t figure out which way to go immediately following ECB President Mario Draghi’s speech on Thursday. Investors should be squeamish at the sight of Draghi throwing everything he’s got at the specter of a painful global recession. He definitely hasn’t got much to throw.
The picture overseas is terrifying, Japan is about to fall into recession after unbelievable stimulus while Germany and Italy already have dipped into contractionary territory. And let’s not forget all the leading indicators at home — under performance of retail and financial sectors, home construction peaking years ago along with RV sales…
But there is still potential for a series of events to ignite the Final Dark Window rally that we’ve been talking about all year.
Donald Trump is urging the Fed very strongly to step on the gas pedal here… If the markets keep weakening and gold prices keep going up that’s going to scream ‘slowing’. That will give Fed Chair Jerome Powell enough of a reason to pull a Draghi and that could ignite a final rally.
Remember, as I explain in more detail in this week’s video, there are two scenarios. But the Final Dark Window rally is still a distinct possibility.
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PS: There’s a BIG surprise coming for the AUD in 2020. Click here to find out what it is (free report)