The Gold chart below shows at least 4 days of Bollinger Band crashes and the RSI is extremely oversold. The payroll report today came in better than expected which caused a huge gap down in Gold today. The $1078 Resistance level is the line in the sand.
The Most Surprising Thing About Today's Jobs Report
This is a trader’s dream scenario, but most investors see it as Armageddon. This recent move down is setting up for a massive move to the upside. Once we see a reversal, which should be soon, the move back up should be a strong one and we should expect a bounce from here to reach the $1,200 level or above.
This would make for a 100+ point move or approximately $10+ in GLD. Consider buying March 2016 Call options in GLD.
Look at the chart of GDX below. I believe it’s setting up for a strong move to the upside. The recent decline was needed to set up the right shoulder of the inverse head and shoulders pattern. The price is at the bottom of the Bollinger Bands and the RSI is showing an extreme oversold position.
We should see a turnaround any day now for a move up to the $18 - $20 level. Now might be a good time to enter a trade with a slight out of the money Call option to expire in March 2016 or later.
Stock Market Indices: (SPY) (QQQ)
The stock market has made an incredible come back from the panic crash we had in August, however, as I told you in my September reports, this is classic market behavior at the beginning of a bear market. No one wants to believe we are in a bear market and the market turning back up just reinforces the belief that the crash was just an anomaly and this move back up has everyone jubilant again.
I believe we are experiencing an epic ‘Bull Trap’ in the stock market. A point in which everyone believes the bull is back and piles in only to be hit hard by another crash down into the bear.
In the daily chart below the RSI is showing divergence in extremely overbought conditions and it appears that the market is beginning to rollover.
I expect we will start to see a move down very shortly in November and it could be brutal. If you have any short positions, I would watch your stops and trail any downward move in the market. If you stopped out of your short positions a while ago, now might be the time to reconsider adding some more.
March or June 2016 PUTS in (SPY) slightly out of the money.
Energy Stocks: (XLE) (UNG) (USO) (LNG)
Oil has been trading in a channel pattern for the past 3 months. From a technical standpoint, it could continue down until it hits lower support and then bounce again. But based on the news in the oil sector, it sounds like it might break support and continue down into a bear market. Only time will tell.
I’m going to wait for a break out of support or a bounce off of support before I make any trades.
Natural Gas continues to move up slowly, but we still have the entire winter months ahead of us. If you bought Spring 2016 Call options, just sit back and enjoy the ride.
Financial Stocks: (XLF) (IYF)
I’m watching the stock market closely before I short any financial stocks. If Deutsche Bank is any clue as to what’s happening in the financial sector, and I think it is, we should expect all hell to break loose over the next several months.
Biotech: (BIB) (KITE) (IBB)
I don’t short biotech stocks and with this flaky market, I’m staying out of biotech for now.
Commodities: (FCX) (JJG) (DBA)
Commodities are setting up for a big run up once investors realize the stock market has topped.
US Treasury Bonds: (TLT)
US Treasuries are getting hammered. Although extremely oversold, I think they still have some downside to go. Notice the support line at $124. Treasuries could crash some more before bouncing higher again. Investors like to go to treasuries when the stock market starts down, so once the stock market shows some serious downside moves, expect treasuries to make a slight comeback. Should be soon.
The Free Market is Dead!
If you’ve never heard of Gerald Celente, he’s an American trends forecaster who makes predictions about the global financial markets and other events of historical importance. He’s the publisher of theTrends Journal, which you can find here: http://trendsresearch.com/trends-journal/
In 2009 he wrote, "Wall Street controls our financial lives; the media manipulates our minds. These systems cannot be changed from within. There is no alternative. Without a revolution, these institutions will bankrupt the country, keep fighting failed wars, start new ones, and hold us in perpetual intellectual subjugation."
More recently, he stated the following: “Capitalism is dead. It has been replaced by Bankism, one of our Top Trends for 2015. The principles of free market economics, price discovery and fiscal discipline have been replaced by central bank policies that artificially pump up failed economies and equity markets with cheap money rather than let them take their natural course. Bankism policy has created a global debt bubble estimated at $225 trillion. When it bursts and economic chaos prevails, gold, we forecast, will emerge as a safe haven asset.”
Celente has been right more than wrong and when he’s wrong; it’s more the timing that is wrong rather than the actual prediction. I agree with the statements above and I believe we are starting to witness these predictions now. The stock market bubble is faltering, liquidity is drying up among the banks and bond markets, we are on the cusp of war and the global economy is in free fall.
Things are not looking good!
Global Economic Instability
You’ve all heard of doomsday preppers and most think these types are nuts and conspiracy theorists. Well, the more I study the global markets and the economic and political instability that is now pervasive in the world; the more I think about how to prepare for an economic collapse and a possible World War.
I’m not talking about building a bunker, but I am making financial preparations and contingency plans in case of financial collapse and/or war. America is trying to pick a fight with both Russia and China and the US has been the major instigator of the instability in the Middle-East.
I don’t agree with our foreign policy and I think it’s going to create World War III. The difference this time is that any war with Russia and/or China will come to American soil and that has me concerned about the safety of my family.
Americans have been lulled into a state of complacency and coupled with the blatant propaganda coming from our government and its accomplice mainstream media; Americans are hopelessly misinformed and insulated from the events that are currently happening around the globe which will impact their lives in the very near future.
I have subscribers who call me a doomsayer who thinks the ‘sky is falling’. All I can say is; if you pay attention to what’s happening in the world, the sky is falling!
Live long and prosper.
Analyst Warns Of Turbulence: "Geopolitical Dislocations Could Result In Key Resource Supplies Disappearing"
Some of the world’s biggest investors have been taking significant positions in the commodity resource sector as of late, most notably in gold. With geopolitical tension and fear of economic breakdown reaching a near boiling point, it’s not difficult to see why.
Join Greg Hunter of USA Watchdog as he goes One-on-One with Bill Holter
“If they didn’t raise the debt ceiling, there would have been an immediate implosion. You have to understand, Americans are the only people on earth that aren’t laughing at the debt ceiling. Foreigners are laughing at it. You are talking about $20 trillion. It can’t be paid. We are at 110% of GDP already, and we’re the reserve currency.”