Over the weekend, we sent a survey to the T3 Live community to get their thoughts on pressing market issues like the Fed, gold, and what they think could take this market down.
Before I get started, let me point out the obvious: these survey results only represent a portion of the T3 Live trading community — NOT traders or investors as a whole.
Still, I think you'll find them interesting… especially when it comes to what traders think will destroy the bull market.
So let's go through our questions one by one:
1 ) The S&P 500 closed at 2164 on Friday. Will it make a new all-time high above 2193 before 2017?
81.3% of survey participants said the S&P will make new all-time highs before year-end.
This was a pretty big surprise to me, given that broader market sentiment is fairly bearish.
Then again, we're less than 2% from a new record above 2193.
2) Gold fell 3.3% to $1225 on Friday. What will it hit first – $1200 or $1250?
58.7% said that Gold would hit $1,200 first, and so far they're right.
Gold is ticking lower today, and the downtrend isn't showing signs of stopping.
3) Will the Fed raise interest rates in December?
74.3% of surveyed traders believe the Fed will hike in December.
The CME's FedWatch Tool currently shows an 85.8% probability of a December rate hike.
That's not terribly far off.
4) Are traders too bullish or too bearish right now?
34.3% of respondents believe traders are too bullish.
19.3% believe traders are too bearish.
And 46.4% think trader sentiment is just about right.
Next time around, I'll simplify this with just two choices — too bullish or too bearish.
5) Which sectors will perform best into year-end?
The banks and biotechs have been ripping since Donald Trump's US Presidental election victory, and our survey indicates that traders expect more of the same.
A whopping 51.4% believe financials will lead into-year end.
In second place was health care & biotechnology at 26.1%.
Technology has been lagging, and just 5.8% of traders think it will lead into year-end.
6) Which area of the market will perform worst into year-end?
On the flip side, traders expect bonds to lead the decliners' column.
31.2% of respondents said bonds will perform worst into year-end with gold in second place at 16.7%
7) What single factor is most likely to break the bull market? Please be as detailed as you'd like.
This question was an open-ended question designed to determine whether traders believe Donald Trump will disrupt the bull market.
I wanted to see how many traders would offer up Trump without being prompted first.
14.4% of traders cited Trump as the single factor most likely to break the bull market.
Meanwhile 15.6% of traders believe the Fed or monetary policy will be the culprit.
13.3% cited terror attacks or other negative geopolitical events.
Here are some of the more interesting responses to this question: (I made minor edits for clarity)
“The alt right and rising nationalism around the world.”
“Too much too fast based on nothing new. The market is overbought and tech is selling off based on assumptions that Trump will go after them. If they really think he will and put taxes on imports, the companies will get ready for bad times which result in high unemployment.”
“Interest rates going too high too fast because President-elect Trump has huge fiscal package that will require massive debt via bonds.”
“Negative world event such as significant terror attack on or around inauguration.”
“Debt will be a big drag on companies bottom line and government debt is unsustainable. So governments and Central Banks should continue to print and go nuclear on interest rates to try and finance that debt. Banks will then put that money to work by sticking most of it in the stock markets. There will be a big tug of war between inflation and deflation over the next couple years.
Want to participate in our next trader survey?
If so, sign up for this week's forex webinar via this link: https://t3campaigns.clickfunnels.com/optin10668137
We'll add you to the list!