When you consider the world’s economic condition and the political turmoil here in the U.S. and around the globe, it’s easy to see that we are living in a pivotal time. You can feel the pressure building and the question on everyone’s mind is: When is it going to blow up?
I think 2016 will be the year. I really thought the end of 2015 was when the financial market poop was going to hit the fan, and it did in part when the bear market began in May and the stock market crashed in August, but the PPT (Plunge Protection Team) was able to plug the leak of confidence, at least for the short term.
But the pressure building in the system is palpable, you get a sense that things have gotten out of control and something’s about to break soon. We are reaching critical mass and for those who are unprepared, they will be blindsided and potentially ruined financially.
I’ve seen this disaster coming for years and have always been a gold bug. The system has taken much longer than I ever expected to reach the point of no return, but I truly believe we are at that pivotal point now.
It could truly happen any day. In fact, I actually think it’s happening now, but it’s just a gradual collapse of the system that will pick up steam as it gains momentum.
That’s the most dangerous thing about it. It’s happening so slowly that most people are complacent about it and fail to do anything to protect themselves. That’s why all market crashes seem to take people by surprise. They are lulled into complacency and then BAM, they get blindsided.
The Complacency Bubble
In a recent article, the following phrase captured my attention.
…the bubble in complacency has never been larger - at a time when it should be fixated on fear.
There are no truer words. People are going about their business completely ignoring the turmoil that’s about to be forced on everyone and consume their livelihoods. They have been gently lowered into the pot of warm soothing water with no sense to escape before the water begins to boil.
Don’t let the recent downturn in gold fool you, this is just short term noise. This week was options expiry week and today the phony BLS employment numbers gave the cartel an excuse to smash precious metals. It won’t last and next week we’ll see a move back up.
Gold has been trading in a fairly wide channel pattern for nearly 2 months. It started out in overbought territory, but over the past few weeks the stochastic oscillator has managed to drop back down into oversold territory. (See chart below.)
The good news is that with all the efforts by the commercial banking cartel to bring it down, it has managed to stay above $1200 and consolidate for another build-up of upward pressure.
I believe once the downtrend line is broken to the upside, we should see a significant move up to higher highs.
It’s important for you to understand that precious metals will be a home run. That’s why I recommend holding long term 2017 options or if you have enough capital, just buy the stock. Once it gains momentum, it’s going to make you rich.
Stock Market: (SPY) (QQQ)
If you’re a trader, you probably know that the VIX is a chart that most traders use to determine when the stock market is going to change direction in the short term. The VIX, also known as the Volatility Index, has an inverse relationship to the stock market. That means it falls when the stock market rises and vice versa.
Traders look at the peaks and bottoms of the VIX to determine the next change in direction for the stock market. If the VIX is at or near the bottom, you can expect the stock market to change direction to the downside and that’s exactly where we are today.
In the chart of the VIX below, you can see that the VIX has dropped down to a new low this year and at the same time the S&P has been rising to a new 2016 high.
A rising VIX typically signals a falling stock market and right now the VIX is at record lows for the year and about to change direction. This should signal a change to the downside for the stock market in the very near future and we should see a dramatic drop to new lows in the coming weeks.
Energy Stocks: (XLE) (UNG) (USO) (LNG)
As expected, oil has changed direction and is now heading back down. This last rally was created in part by a huge short squeeze, as investors covered their short positions during this short term rally. Now the energy has run out and we are headed back down to where the fundamentals take us.
We have the largest global oil glut since the Great Depression, very low demand due to declining global economic conditions and collapsing fundamentals.
I do believe however, that the oil glut and current demand has stabilized and US production is dropping due to the amount of US rigs going offline. Eventually we should see a bottom and perhaps later this year, I expect another swing up as the potential for growth in the energy sector rises.
Commodities: (FCX) (JJG) (DBA)
Commodities are heading back down again and decreased global demand will continue as the world economies tank.
US Treasury Bonds: (TLT)
I told you last week that I thought Treasuries were telegraphing a turnaround in the stock market. Investors will go to Treasuries when they believe the stock market is rolling over. Today Treasuries continue to rise as investors lose confidence in stocks.
(SLW) January 2017 CALLS
(GDX) January 2017 CALLS
(ABX) January 2017 CALLS
(FNV) January 2017 CALLS
(RGLD) January 2017 CALLS
(SPY) December 2016 PUTS
(IYF) August 2016 PUTS
When Central Bank Intervention Fails, The System Will Implode!
We are witnessing the western Central Banks’ last gasp at preventing total systemic collapse.
Martin Armstrong Asks "When Will Trump Be Assassinated?"
The point is, those in power will NEVER surrender their power willingly. Donald Trump is flying in the face of people so corrupt that they would not hesitate to have him assassinated somehow, be it a plane or car crash or under the pretense of some minority who gets amazing access.