Editor's note: It's impossible to predict market events with 100% accuracy. But according to Marc Chaikin – the founder of our corporate affiliate Chaikin Analytics – investors can get ahead of whatever the market throws our way.
So in today's Weekend Edition, we're taking a break from our usual fare to share one of Marc's essays. It was recently published in his free Chaikin PowerFeed e-letter. In it, Marc explains how one investing tool can spot vital clues in advance and steer you away from potential losses...
In November 2022, I shared a major prediction at a special Chaikin Analytics online event...
It probably felt like "too much" for many investors. At the time, I said that "a major shift in our financial system... could lead to a run on the banks in 2023."
Now, I didn't know that this situation would involve Silicon Valley Bank. And I didn't realize that folks would rush to clean out their bank accounts.
I didn't expect the situation to unfold exactly like it did. Nobody could have. But when I shared my prediction, it was clear...
Rising interest rates and low-yield bank accounts were changing the landscape.
I expected a lot of money to start flowing out of banks and into areas where investors could earn a higher rate of return. That's just basic economics.
It also seemed obvious that the situation could worsen and cause market volatility. And of course, that's exactly what happened starting in November 2022.
My point is simple... We can't predict specific market outcomes.
But we can still look for clues.
As I'll explain today, our Power Gauge system at Chaikin Analytics was watching the banks the entire time. And it saw what many financial experts and investors didn't...
The Power Gauge combines investment fundamentals and technicals. And it produces a simple, actionable rating for every stock in its universe.
In March 2023, the Power Gauge was already flashing warning signs. And Silvergate Capital, which was trading under the ticker symbol "SI" at the time, was the first domino to fall.
The crypto-focused bank announced a plan to wind down its operations. The chart below shows Silvergate's performance leading up to that point...
Pay close attention to the Power Gauge rating at the bottom of this chart...
The different-colored bars show the rating for Silvergate on any given day. Broadly speaking, yellow is "neutral" and red is "bearish."
You'll notice that the Power Gauge flipped to red ("bearish") for Silvergate on April 5, 2022. And it remained either "bearish" or "neutral" for an entire year.
In fact, the Power Gauge warned us about all the troubled banks...
Our system flashed a "bearish" sell signal on First Republic Bank on April 1, 2022. And it flashed "bearish" sell signals on Signature Bank and Silicon Valley Bank's parent company, SVB Financial, on July 11 and July 25 of that year, respectively.
The Power Gauge alerted users to sell (or avoid) all these banks... long before they collapsed.
Folks, this is exactly why I built the Power Gauge...
It's my life's work. I've put everything I learned in my 50-year finance career into it. And now, the system can help everyday investors thrive in any environment.
I don't pretend to know exactly what's coming next for the markets.
But with the Power Gauge at our side, we can pinpoint the likelihood of major shifts like a run on the banks. And we can do it before most folks even begin to figure out what's happening.
Good investing,
Marc Chaikin
Editor's note: On Wednesday, June 26 at 8 p.m. Eastern time, Marc is stepping forward with his next big prediction. He says a massive monetary shift is happening in the U.S. right now... one that will likely determine some of the biggest stocks of the next decade.
Every time we've seen a shift like this, a specific corner of the market has beaten the S&P 500 over the next year – 100% of the time. That's why Marc is urging folks to take advantage of one little-known strategy to capitalize on potential gains... Click here for all the details.
