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Season 2, Episode 30: The Real ‘Melt-Up Is Still Ahead of Us’

September was a “fake out sell off,” says David Hunter.

David Hunter of Contrarian Macro Advisors rejoins the podcast to update listeners on his vision of a “parabolic melt-up” in risk assets that will presage the next market crash.

What we’ve seen since late March was not the real melt-up, Hunter says. Most of the gains are still ahead, in fact the coming months should see the final (and most dramatic) period of the rally. Then things get ugly.

Content:

  • What we saw in September was a “fake out sell off”. We will regroup and see the real meltup later this year (3:25);
  • The target for the S&P 500 is still as high as 4,500. The NASDAQ could go as high as 15,000. The final move into the secular top should begin this month and will continue through the election and quite possibly beyond (4:15);
  • A new stimulus package by the U.S. Congress may be the catalyst that extinguishes all the bearishness currently seen in the market (6:11);
  • The election and its aftermath surely pose a risk. What about the coronavirus? (8:49);
  • The Fed could resume stimulus measures as well. Indeed, Powell & Co may have already started (15:11);
  • After the melt-up there will be a crash that will be very ugly indeed (17:35);
  • A Fed policy misstep will likely be the cause (19:04);
  • No, a Biden administration will not likely lead to a new Fed chairman. The crash will unleash additional stimulus and loosening measures by the Fed — another overreaction — in the second half of 2021 that will eventually lead to inflation, though not until about 2023 (23:43);
  • “This is a call people are going to want to lock me up for…I think you will see potentially a full retrace of the last 40 years of declining inflation and interest rates” (28:45);
  • This inflation cycle will result in commodity prices “you can’t imagine:” $10,000 gold, $15 copper, $300/barrel oil (29:52);
  • Ultimately you may see “a collapse of the entire system” that will make the 1930s “look like a picnic.” (38:14)

Find out about David Hunter’s newsletter by following him on Twitter @DaveHContrarian and sending him a direct message.

Not intended as investment advice.

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