I can keep slapping you in the face with information and evidence each week, but if you don’t want to believe what you read or witness in the markets, that’s your prerogative. When things finally do hit the fan, you at least can’t say nobody warned you.
Things are lining up to reach critical mass very soon.
1. We have all of the major global stock markets crashing.
2. We have mounting layoffs from western companies like Caterpillar, Winn Dixie, Wal-Mart, McDonalds, and even major banks.
3. We have a record 95 million Americans not participating in the labor force with the labor participation rate at an all-time low. That’s nearly 1/3 of the US population.
4. We have phony labor statistics published by the FED and their main stream propaganda machine.
5. We have an escalation of war happening before our eyes in the mid-east, specifically Syria with Russia and Iran sending arms and ground troops into Syria.
6. Israel is getting jumpy and could fire the first round from NATO at any time. This powder keg could erupt into a full scale World War at any minute.
7. We have a stock market that has peaked and turned down into a bear market.
8. We have weak to zero economic growth with 3rd quarter GDP expected to be less than 1.1% and that’s only if you use the government numbers. Shadow Stats (http://www.shadowstats.com/) predicts GDP in the negatives.
9. We have a run on physical gold and silver with demand surging and supply almost non-existent and this week we have gold and silver soaring higher.
10. The Comex and LBMA are extremely close to physical default with not enough physical supply to cover the demand, therefore, buyers are settling in cash. There are 200+ paper contracts for every 1 ounce of physical metal on the Comex. Under normal market conditions the price should be skyrocketing. This manipulation is about to end due to the extreme demand vs. supply ratio. When it breaks, it’s going to break big to the upside.
11. The US Dollar is losing its reserve currency status at an alarming rate. China, Russia, India, South Africa, Saudi Arabia and many other nations have all started using different payment methods to circumvent the petro dollar.
12. US Dollar reserves held by foreign countries are being unloaded like hot potatoes. They know what the American public doesn’t know.
What will take down the US economy?
Here’s a brief list of possible Black Swans:
A crash occurs in the stock or bond market. (Already happening across the globe.)
The paper gold market crashes, when the shortage of physical gold is revealed causing the price of physical to skyrocket. (Very close now.)
Creditors dump US debt back into the US market. (Has already started.)
European countries default on their debt. (Ever heard of Greece, Italy, Spain, Portugal, Ireland, France, Puerto Rico, Brazil?)
The US dollar ends as the World reserve currency. (Russia, China, Saudi Arabia, India, South Africa, among others, have already started using alternative payment methods circumventing the U.S. Dollar.)
Interest rates are forced higher as the bond market collapses, as they did in 1929. (Very close to happening, probably in late 2016.)
Banks freeze or confiscate deposits. (Congress passed ‘Bail In’ legislation earlier this year, 2015. This allows the banks to confiscate the money you have deposited in the bank to cover their bank deficits.)
A credit collapse occurs (followed by dramatic inflation or hyperinflation). (We have this to look forward to.)
If you do nothing, complacency will be your downfall.
If you’ve been a trader for long, you should know that gold trades inversely to the US Dollar. We had quite a run up in gold for the past few days and if you look at the chart of the US Dollar below, you can see that the run up in gold corresponds to the drop in the dollar.
On Wednesday and Thursday the dollar crashed thru the Bollinger bands and is now bouncing out of that breach. This is causing some downward pressure on Gold, however, this will be short lived and the US Dollar will resume its bearish decent which will inversely cause gold to continue on its upward journey into Wave 3.
If you compare the chart of Gold below to the dollar chart above, you can clearly see the mirror image of the inverse relationship between the two. I expect Gold to continue higher into next week after a slight retrace.
Stock Market Indices: (SPY) (QQQ)
Today is options expiration day and the stock market tends to always run up just prior to options expiry and then roll over the following week into a retrace. In addition, the market is heavily overbought and is due for a retrace back down. If you look at the MACD below, you can see that the market is in extreme overbought territory and due for a correction. I expect the markets to move down over the next couple of weeks and a possible crash scenario could surface during that time or into November now that we are in poor earnings season.
Energy Stocks: (XLE) (UNG) (USO) (LNG)
Last week I told you that Crude Oil was setting up for a downside move after the Bollinger band crash from last week and it might be a good short term trade using PUT Options. I trade (XLE) for oil trades, as it tends to mimic the Crude Oil chart fairly well.
If you placed a trade earlier this week, you should be looking at a nice profit so far, however, I don’t think the downside is over yet. There should be some more downside to go and I would place a trailing stop on this position and play it out.
Financial Stocks: (XLF) (IYF)
It’s time to short financial stocks, the tide has turned and the devastation will be ugly. This crash will start slowly and then build momentum over the coming months, therefore, if you place short trades, make sure they are longer term with expiration dates into 2017, if trading options.
Biotech: (BIB) (KITE) (IBB)
Have you ever heard of cancer immunotherapy? It’s a new method of cancer therapy where they take the DNA of the cancer cells and develop an antibody from your own immune system to kill the cancer cells. It’s similar to a vaccine except that it uses your cancers actual genetic make-up to attack it with your own immune system. The treatment has had incredible success rates with most cancers being wiped out entirely.
Well, there is a new ETF that just opened for business called Cancer Immunotherapy ETF, symbol (CNCR). It holds a basket of companies on the forefront of this new technology.
You might want to put this one on your watch list. Even with the biotech sector taking a hit with the stock market collapse, this one might have the strength to maintain or inch to the upside over the coming months. I would consider this a long term trade. You might want to just put it in your long term investment account and trail it with a 20% trailing stop.
Commodities: (FCX) (JJG) (DBA)
Commodities will move higher when we have inflation, however, right now we are experiencing deflation as the global economies crash. Commodities are taking a huge hit as a result. Inflation will begin once the central banks begin printing more money to try to stem the crash in the markets. I will just watch these until I see a signal of a move up in price and a break of the downtrend line.
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