The biggest profits for investors are made once they get in a new bull market in its early stage. The challenge, in doing so, is that investors can be too early so that they either have to wait too long for the bull run to start (in which case many investors lose their patience) or they did not get a confirmation of the new bull market (in which case they have to wait even longer).

So the big challenge for investors is finding the ‘right’ moment to go long at the start, or right before, a new bull trend at a risk of being too early.

Our readers know that we have successfully identified a couple of major bull markets:

• Blockchain stocks are the bull market of this decade, maybe even the bull market of this generation.
• Emerging markets are looking very strong for the years ahead.
• China, in particular, looks extremely strong, specifically a couple of sectors in the Chinese market looks amazing.

Interest sensitive markets could become extremely bullish

One other major trend is rising interest rates. Do not underestimate the importance of interest rates in markets, they are – by far – the most important asset from a fundamental perspective. Stated differently, they influence many other markets, first and foremost stocks but also most risk assets, and, in doing so, commodities.

Interest rates are on the rise, and they could do something that is amazingly important: break out of a 4-decade falling trend. Consequences on markets will be huge, without any doubt. The million dollar question is which trends exactly will be triggered?

One of our loyal readers reached out to us, and challenged our thoughts on this. This was our answer:

I personally believe that we should thoroughly assess the state of markets, intermarket dynamics and secular intermarket trends, once 20-year yields reach the top of their 4-decade falling channel. Depending on the new trends that become visible from an intermarket perspective, we should be able to get a view of what’s next. That is my personal opinion though, nobody has a precedent to know for sure because if interest rates transitioning into a new secular bull market has not happened in 4 decades so hardly anyone can know for sure what’s next.

That is our honest assessment.

One thing is clear though: interest rate sensitive markets will outperform. That is why we believe that the banking and insurance sector is bullish as explained in Top 4 Insurance Stocks To Consider In 2018.

The opposite is true as well: utilities will do very bad, so this could be a short idea.

Do not forget however that long banks or short utilities is part of one and the same trend. So in terms of diversifying a portfolio it can or cannot make sense. That is a personal question each investor has to assess.

Economic sensitive markets are already bullish

Another market trend which is visibly bullish are economic sensitive sectors. This is where the chart in this article helps us make our point. The Baltic Dry index is typically bullish is the economy goes well. Crude oil and copper are both confirming this uptrend.

One way to play this bull market is one of the largest copper miners: Freeport McMoRan. As explained more than a year ago in Freeport McMoRan (FCX) Stock Price At Breakout Level we identified $24 as the most bullish price target of Freeport McMoRan. It is now 20 percent below that price target.

Note that copper related investments and steel stocks are also part of the same trend. Commodities in general are economically sensitive. That is one of the reasons why we believe that even gold could do well, and that our gold price forecast for 2018 could get invalidated: gold typically can do well in an inflationary environment combined with a strong economy and risk on sentiment.