How to Trade a Phantom "Megacrash"

Once again, the market defies the growing crowd that insists on forecasting another megacrash like we witnessed in 2008. March 18, 2014     How to Trade a Phantom "Megacrash"   Another megacrash coming? Why the bull might just be getting started Plus: Gold cracks the whip...   Greg Guenthner coming to you from Baltimore, MD... Greg Guenthner Here's this morning's unofficial tally: Putin takes Crimea. Stocks go up. Gold goes down. Got it? Good... Once again, the market defies the growing crowd that insists on forecasting another megacrash like we witnessed in 2008. In fact, the financial blogosphere is bursting with market comparisons to 1987, 1929 and any other year stocks took a tumble. Stocks are up big over the past five years. So they must suffer a big drop soon, right? Not necessarily... Let's put away from the charts for just a minute and get to a question that a lot of people just aren't asking: How are businesses responding to the economy right now? "Admittedly, there's been a bit of a disconnect between stocks and the economy," says Rude researcher Noah Sugarman. "But this bull run could be nothing compared to what's in store should spending pick up steam." Between 2009 and 2011, businesses under-invested by about $175 billion, according to the Wall Street Journal. Many businesses have been hesitant to put their capital back into a still fragile economy. That's been a drag on the big picture. But things could be about to change... BMO Harris Bank sees businesses ready to invest this year, with 64% of smaller businesses (revenues less than $20 million) and 82% of larger ones planning on spending in 2014. These numbers reflect what BMO has seen over the past 18-24 months - companies making more investments in cap-ex for both maintenance and expansion. "Perhaps most encouraging, is that companies plan on using their cash, rather than debt," Noah continues. "Just 11% of small businesses and 6% of larger ones intend to fund their investments with debt alone. That's opposed to 59% of small companies and 49% of large ones saying they'd exclusively using their cash reserves." That means the coming spending won't be overleveraged like we've seen a lot in the past. And if that's the case, just wait until this spending boost is reflected in economic data. "Sure, the S&P 500 has surged 200% on a total return basis since 2009," Noah says. "That might signal a peak to some. But we could be staring down incredible gains for both the economy and the markets. Don't make the mistake of counting this recovery out yet."         The Great American Retirement Hoax Discover the dirty details of Obama's war on your retirement and, more importantly, what you should do about it. Learn more here.           Rude Numbers Targets, Predictions and Wild Guesses   50% year-to-date gains in Green Mountain Coffee come alongside news that the company will be added to the S&P 500 later this week. 65 years ago, hydraulic fracturing was created in the U.S., leading to the creation of 332 fracking wells within the first few years. $8 billion separates Google's market-cap from the cap of the second largest company in the world - Exxon Mobile. 1,857 is where you'll find S&P futures this morning. The market moved sharply higher this morning after Putin announced Crimea will join the Russian Federation... $1,357 marks the spot for gold futures today. Gold is now enduring its first downdrafts after breaking above $1,350 last week. The yellow metal has dropped $30 off its price since Sunday evening...     Rude Trends When to Buy... When to Sell   Gold's getting a bit crazy already... These big changes in trend can be volatile. But this is borderline insanity. After hitting a high of $1,392 Sunday night, gold futures have taken the elevator back down toward the big breakout zone near $1,350. I told you Friday that strong moves like what we witnessed last week usually don't pause long enough to let hesitant traders in on the move. Well, I'm already wrong about that one... Still, I like the miners for longer-term trades here. We've been playing miners in the PRO since early January--and had the chance to book some nice gains along the way. And I still think we'll eventually see more gains from one of the market's "most hated" groups... But for now, it's important to keep your stops tight. No matter how good a trade looks, there are no "sure things" when it comes to the markets... [Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner]     Ignore At Your Own Peril Today's Must Read Links   Check Your Pockets and Your Piggy Bank... And Hoard These Coins How to "Disappear" from the IRS by April 15, 2014! How a Carpenter and a Puppet Maker Could Kill Obamacare     BE SURE TO ADD dr@dailyreckoning.com to your address book.       Additional Articles & Commentary: Join the conversation! Follow us on social media:         The Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Agora Financial delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from The Rude Awakening, click here. Please read our Privacy Statement. For any further comments or concerns please email us at rude@agorafinancial.com. If you are you having trouble receiving your Rude Awakening subscription, you can ensure its arrival in your mailbox by whitelisting The Rude Awakening. © 2014 Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security they personally recommend to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.