Recently business and financial guru Mark Cuban wrote an article about why this tech bubble is going to be worse than the tech bubble of 2000. This made me take another look at the long term charts again, but instead of looking up the NASDAQ or the tech sector I decided to check out gold mining stocks, gold price and the Dollar index.
From looking at the price action among the precious metals sector and the dollar it looks and feels like these markets are very close to repeating what happened in the year 2000.
The chart below is a monthly chart looking all the way back to 1996. I have color coded areas of the chart that represent weak and strong times for the price of gold.
- The US Dollar is trading roughly at the same level and trending higher as it was in 2000.
- Rising dollar is neutral/negative on commodity prices and resource stocks like gold miners.
- Gold price struggled as the dollar rose in value.
- Gold stocks fell sharply during the last year of their bear market.
- Gold stocks bottomed before physical gold by several months.
Concluding Thoughts on Dollar, Miners & Gold Price:
In short, I feel most of the downside damage has already been done to the price of gold. Gold stocks on the other hand could still get roughed up for a few more months before finding a bottom.
Money is likely to continue rolling into the dollar as a safe haven and this will keep gold and silver prices relatively flat. But once the dollar starts to show signs of increased volatility (top) similar to 2000 – 2001 money will find its way into other currencies and precious metals as the new trade and safe haven.
Get My Trades In Real-Time: www.TheGoldAndOilGuy.com
Everyone is looking for the holy grail of the financial market which will tell what will happen next in stocks, commodities, bonds etc… Knowing that the holy grail of trading does not exist I am going to step out on a limb and share my four month stock market forecast along with commodities and bonds.
It is vital that you understand this is a 2-4 month forecast only and as the market evolves my outlook will change as I follow price action as closely as possible.
Here are some key points you need to know:
- Bonds should perform well for a few months and possibly a long time until the bear market in US stocks takes hold and is well under way. BUT, the bond bubble will burst eventually when rates start to climb. This could be June, or much later in the year but until then I expect them to rise as the safe haven.
- Commodities typically outperform equities during the late staged of the bull market which is what I feel the US stock market is. Resource stocks and resource rich countries like Canada should hold up well, and possibly make new highs going into summer.
- Notice how gold and oil have moved from opposite corners of the chart compared to the US and Canadian stock indexes.
- During the 2000 and 2008 bear market we saw gold, silver, oil and mining stocks get hit very hard in the second half of the bear market. Will this happen again? I do not think it will because this time rates are at zero and there is only one way to go when they are at the bottom… Up!. This means stocks and bonds will likely both enter a bear market, maybe not at the same time, but they will eventually. This means the only places to protect your capital will be commodities, resource based investments, or simply cash CAD & USD.
Take a look at this 10 year bond price overlaid on the S&P 500 index. So far this year bonds have popped and rallied above short term resistance which we have seen in the past. Big money is rotating into bonds for the time being and this is a warning sign of a stock market top.
Market Forecast Conclusion:
In short, safe havens for investor’s capital will be more of a dance during the next bear market in US equities.
With many countries devaluing their currencies and a potential bull market in commodities I expect the Canadian Loonie and US Green Back to hold the value if not rise over the next year or two.
If you want my long term investing signals my ETF swing trades so you can protect your capital and profit during the next bear market – Sign Up Today!
The question on everybody’s mind for 2015 is when will the stock market start to correct in value and will it turn into a 50+% collapse?
Over the last 15 years investors has been through a lot in terms of market volatility. From the 2000 tech bubble bear market and the 2008 financial crisis bear market investors are far from having their investment psyche scars healing and is for good reason. Many sustained 50+% loss in their portfolio value more than once and are not willing to do it for a third time.
A large group of investors exited the stock market and has never returned. Unfortunately those who exited have missed the seven-year bull market rally to all-time highs. Those who remain in the market are in constant fear that a new bear market will emerge.
The stock market has a tendency to move in a 6 to 8 years cycle. With the current bull market now lasting seven years and was several indicators signaling weakness within the equities market it makes logic sense that a bear market is about to emerge.
The stock market cycle and technical indicators are not the only causes the trigger a bear market. A rising Fed funds rate can cause weakness in the equities market and if you know what to look for you can escape the next bear market and profit from falling prices.
Question: if you could put your money in a guaranteed investment not to lose any principle and receive a 1% per annum return on investment or receive potentially 7% per year but with no guarantee on your principle, which would you choose?
Most people would choose the 7% return option because they understand financial rewards almost always require some risk. Over the last 90 years the stock market has on average returned 7% annualized gains.
Obviously not all years will have a positive gain, but when averaged over many years, it is reasonable to expect an annual return of 7% from the stock market.
What if I told you there is a way to improve on this? For example, if you simply moved your equity investments to a large cash position at the start of each bear market?
The chart below showing the gain from your would have has from 1995 to 2015 by selling all stock holdings when the US stock market topped during 2000 and 2007 avoiding the last two bear markets.
100% cash position during bear markets would have generated 635% ROI, which is a 31% average annual return. The numbers are staggering to say the least. But obviously you cannot pick the exact top and bottom, but even if your timing was way off and you only pocketed half of those gains you would still be way ahead of game.
You may be asking yourself:
How do I avoid a bear market?
I believe for investors this is not that difficult because a major trend change takes time and because the moves are so large you don’t need to be perfect with your timing.
Take a look at my analysis charts below. The first one shows the 10 year treasury price which is broken its short term resistance levels and is rocketing higher. We have seen this happen 6-12 months before the last two bear markets started.
Let’s take a look at the Fed rates
Not every rate rise turned into a recession, but nearly everyone has. Rising rates will lead to a market downturn.
Could the next bear market/recession occur when rates start to climb? After analyzing economic data provided by Brad Matheny I have a max rate at 2% over the next couple years.
That combination of technical indicators, analysis above couple with the rising fed rate hikes had created the perfect storm for a bear market to emerge which I expect to last 1-2 years.
Bottom line, we are still in a bull market but only months away from a bear market. Do not ignore these warning signals.
Keep your eye on the 2 year treasury rates instead because they usually lead Fed funds, and will provide an earlier warning signal as to the markets down turn.
When rates start to rise, we may only be weeks, instead of months, before the stock market starts to collapse.
Get My Trade & Investment Alerts: www.TheGoldAndOilGuy.com – Limited Offer!
PURCHASE & DOWNLOAD eBOOK NOW LEARN AND PREPARE YOURSELF
A SUDDEN ECONOMIC COLLAPSE IS ON THE WAY
It is more critical than ever in our history to hedge against economic collapse, especially this year of 2015 and the autumn of this year.
Seven experts from around the world agree with this impending collapse, and they include The Jerome Levy Forecast, John Ing, Bill Fleckenstein, Paul C. Roberts, Phoenix Capital, Gerald Celente and Ron Kirby.
You have a once-in-a-lifetime opportunity to profit and survive when a sudden economic collapse arrives in 2015. Great chaos and confusion is going to accompany the crash. There are 3 primary ways you can profit from it. One is investing into gold shares, coins and bullion. The second is investment into silver. The third is that you can diversify a percentage of your holdings into an inverse Exchange Traded Fund (ETF).
When the crash occurs it will be too late to invest in the ETF market. The financial sector of the market will be virtually destroyed. Inverse ETFs , gold and silver will skyrocket to highs that you’ve never seen before.
You need to know the timing since it’s critical to invest at least 2 weeks prior to the event itself. The shadow government knows that the $18 Trillion in U.S. debt and the 1 Quadrillion in derivatives in the market are not manageable, nor can it ever be repaid. Their only plan is for a crash, to be followed by a devaluation. The end result is a financial tsunami the likes of which you have never seen before.
The Global Economic Collapse of 2015 book covers the history you need, the facts you need and a detailed description of the 2015 strategies you must employ. This book provides you with the tools you need, and the precise timing of the engineered crash to occur later this year.
The Great Depression of 2015 is going to happen, but you can profit from it. In this book Investigative Journalist David Meade explains how. A chilling look at the facts, graphs and cycles behind America’s next economic collapse.
There is a pattern of economic crashes occurring approximately every seven years dating back to the Great Depression. The Great Depression suffered its worst year in 1931, then later we have the Arab Oil Embargo, the S&L crisis, Black Monday, the 1994 Bond Massacre, the 2001 NASDAQ crash, and the 2008 Financial Collapse. Each occurred at the very end of a 7-year economic cycle.
There is an additional mystery to this cycle which makes it absolutely extraordinary. This seven year cycle also lines up with the 7 and 49 year cycles of land rest and jubilee debt forgiveness that God commanded the Israelites. This is called the Schmita Cycle. We’ll cover this. It is the “cycle of cycles” that economists have been looking for. We are on the verge of the greatest depression in history, and with it the most opportunity to profit.
There is a plan to destroy the US Dollar and not to pay back the 100 Trillion in unfunded liabilities. The elite would prefer to simply transfer their personal holdings to Euros and gold. Their plan is to divest American assets, sell the dollar, renege on all debts and start with a brand new currency. That plan is revealed here.
This book will show you the cycles, analyze the inevitable outcome and give you the information you need to profit from the coming economic collapse. Get ready for the most amazing buying opportunity of your lifetime. Gold strategies, Silver strategies, gold stock strategies and much more are covered in this one-of-a-kind manual.
INTRODUCTION – FROM THE AUTHORS
- Oil & Geopolitics
- The Timing and Cause of the Global Economic Collapse of 2015
- World Gold Shares
- The History of Gold
- How to Develop a Gold and Silver Portfolio
- Silver Investing
- Creative Non-Paradigm Planning and Thinking
I have not found any other books that allow the investor to safely re-balance their portfolio from their home office, without leaving there. It is written as an eBook, for ease of search ability (just enter Ctrl F and you can find any search term or topic you want), and for ease of research ability.
I am an Investigative Journalist, a cryptographer and have been employed at the Pentagon and Fortune 500 Companies. I’m the author of close to 10 books. Enjoy this one!
David Meade and Chris Vermeulen
TABLE OF CONTENTS
- You Must Buy Gold
- Seven Experts Who Agree With Me
- The 7-year Cycle and 2015
- The U.S. Research Project
- You Must Know History to Understand the Present
- Oil, Geopolitics and War
- Ten Commandments for Buying Gold and Silver
- Bullion Portfolios
- Gold Stocks Around the World
- How To Protect Yourself Using Index, Gold & Oil ETFs
- Emergency Preparedness
- Non-Paradigm Thinking
Learn More: www.AlgoTrades.net
Since the beginning of January 2014 stocks have shown signs of institutional selling. This can be seen in the small capitalization stocks index the Russell 2000. This group of stocks generally leads the S&P 500.
Most bull market tops in the S&P 500 shown below take 8-12 months to form before it starts to fall in value. So far the market has been under distribution selling meaning the large traders (institutions, hedge funds) is selling their positions to the average investor to be left holding the bag when things go south.
The chart posted below shows some of my analysis of the SP500 index. This chart shows the 200 day moving average which is a great indicator of the major trend of the market. Green means bull market, red indicates bear market.
Also you will see the red ATR (Average True Range) indicator at the bottom. This tells us if the average daily movement for the index is high or low. When this red area rises we know there is a large amount of money flowing in and out of the equities market. It takes large amounts of capital to do this and is why the sellers are most likely hedge funds and institutions rebalancing their portfolios for an upcoming trend change.
If we step back and take a look at the bigger picture using the monthly chart of the S&P 500 we can foresee what is likely to happen in the next 12-36 months. The US stock market is losing momentum which can be seen by the relative strength indicator at the top of the chart.
Also the support trend line give us a feel on how soon a breakdown in price may happen. It appears to be just months away…
Taking things one large step further back, roughly 70 years you can see some patterns of that in the past. The question is not will there be a bear market, but how far will it correct?
The cart below shows a very bullish outlook of a minor correction of 30% in the next 36 months. Also I do have analysis that shows that if we break below the 30% level we could have a 50-60% correction which could trigger a chain reaction of issues including the US bond bubble to burst.
US Stock Market Conclusion:
In short, the US stock market continues to grind higher but with several warning signs to investors who know how to spot them.
There are three ways to play a bear market. The first is to do nothing, which is what most people do as they watch their life savings slowly evaporate right in front of them month after month.
Second, is to liquidate a large portion of equities and sit safely in cash while others lose money.
The third and last is to position yourself to profit from a falling market. It’s known that stocks fall 4-7 times faster than they rise, which means you can potentially make 7 years’ worth of profits in just 1-2 years if done correctly.
These are ways to play a bear market, and I say play because you do need to be a little more active to enter and lock in profits in this market condition. This is something I can help you with through my trade alert newsletter.
www.TheGoldAndOilGuy.com – Bear Market Offer – Save Now!
Protecting Yourself with Gold, OIL and Index ETF’s
In 2009 I shared my big picture analysis, investment forecast and strategy in a book called “NEW WORLD ORDER ECONOMICS – What you can do to protect yourself”. In January 2009 I forecasted that the Dow Jones Industrial Average was going to make a bottom within a couple months which it did. I also predicted the price of gold to start another major rally, and for crude oil to bottom and rally for years, which were also correct.
You can call it luck, skill or a mix of both… but the truth is that the markets cannot be predicted with 100% certainty. With that said, the US stock market, gold and oil look to be setting up for their NEXT BIG multiyear moves.
THE OIL BEAR MARKET IS ABOUT TO END
Crude oil and energy stocks are tricky to navigate in a situation like this where the equities market is nearing a bull market top.
It is critical to remember that when the US stock market turns down and starts a bear market virtually all stocks and commodities will fall in value including oil and energy stocks. Investors need to understand that even though the price of crude oil is nearing a bottom it could and will likely stay low for a considerable amount of time “IF” the stock market turns down.
Over the last 100 years we have seen nearly 30 bear markets. The average length of a bear market is 18 months and has an average decline of 30%.
I do feel currency problems and a war breakout will be bullish for both oil and gold. So if we get a bear market in equities, and a war oil and oil should rally while stocks in general fall.
But if we do not have those sever crisis’ then if gold and oil break below their critical support level which is the red line on the charts and a bear market in stocks start you do not want to be long stocks or commodities.
PRICE CHART OF OIL
The chart below shows the line in the sand for the price of crude oil. If this level is broken with a monthly bar close below $43 per/barrel I think $30-$33 will be the next stop and the low for the oil market. It seems everyone is bullish on precious metals and have been buying like crazy.
The points I made about gold which I talked about in PART II should be reread because if the support levels are broken oil will fall 40%, and gold another 35% from their current prices.
Below are some ETFs that takes advantage of rising oil prices. While there are other funds that cover oil stocks I feel they may not perform well during the equities bear market. Investing in physical oil is the best play at this stage of the game but when the equities bear market looks to be nearing an end, energy stocks will be the best place to invest.
PART 3 CONCLUSION:
In short, I feel crude oil will has or will find a bottom within the next couple months. Long term the value is great, but we must be aware that if equities start a bear market it will be best close all equity positions and wait for the bear market to subside. When the time is right investing in crude oil and energy stocks which pay high dividends will generate life changing gains and an income stream. Patience is the key.
Join My Free Newsletter and Receive More Trading and Investment Ideas: www.GoldAndOilGuy.com