Are you ready for a Fed interest rate hike on March 15? Markets are not and may be caught off-guard on March 15. That could cause dislocations and a major drawdown in stock prices.
U.S. Debt Ceiling Becomes Law
The debt ceiling will freeze in at $20 trillion. It will then be law. It will be a hard stop. The Treasury will have roughly $200 billion in cash. We are burning cash at a $75 billion a month rate. By summer, they will be out of cash. Then we will be in the mother of all debt ceiling crises. Everything will grind to a halt. I think we will have a government shutdown. ~ David Stockman
Marine Le Pen anti-Muslim; anti-European Union, National Front Party expected to win.
Death of Gold Manipulation
Physical gold is scarce and the supply is at historical lows. The physical market is transitioning to control the market price and this time there is no physical to back the paper short positions up. Gold is leaving the banks and going into private storage where it is unavailable to support the paper gold market It’s just a matter of time before the paper gold market freezes up and the gold price resets to a much higher price based on physical availability. Analysts are predicting a 90 day window before a reset of the gold markets.
Sometime this year, China could devalue the Yuan drastically or reset the price of gold. China is unofficially the largest hoarder of gold.
‘(Gold) Cartel rapidly losing strength, as too many catalysts (and crashing currencies) are thwarting it; imminent collapse of the Euro, and European Union; Imminent Yuan devaluation? Historically overvalued stocks and bonds, and historically undervalued PMs; Surging Bitcoin; The dying “Trump-flation” meme, as seen via the 2.5% cap on the 10-year Treasury yield.’ ~ Andy Hoffman
China does not believe in fiat currency and it especially doesn’t trust the dollar as the basis for a monetary system. It does trust gold, which is a major threat to the dollar. As long as China stays on course, gold is destined to become the center of a new monetary system, and as a consequence will follow a steeper and more protracted upward path than almost anything we’ve seen before for any financial asset. ~Stephen Leeb
‘The strong money (in stocks) is selling to the weak hands and at some point the insiders will go short and the weak hands will be holding the bag.’ ~ Dave Morgan
The Fed has been jawboning about a rate hike this week scheduled for the March 15th meeting, as a result, the cartel has used the headlines to attack mainly silver, but also gold. I don’t expect gold to drop too much farther and this is the perfect time to enter into any new positions.
The miners have been hit hard this week in what many believe is an artificial attempt to destroy the positive sentiment in the gold market. The cartel didn’t have any success suppressing gold in the futures market this month due to the extreme supply conditions.
Every time they tried to attack gold in the futures market, investors came in and bought up massive quantities at the lower price only to cause the price to bounce right back. That’s why they hit the silver market so hard yesterday, as over $1 billion dollars of silver naked shorts hit the silver market right after the close of the European markets. (See chart below.)
We had a Bollinger crash on Thursday in the miners (below) and the stochastic oscillator is stretched to the downside limit. The miners appear to have bottomed and a surge higher is expected next week.
Stock Market: (SPY) (QQQ) (XLF) (IYF)
The chart below illustrates how incredibly overvalued the market is with never before seen, historical highs and a Shiller PE in excess of 27. A normal PE is 16.
I have posted no less than 7 recent stories below from different financial analysts and economists indicating that a stock market collapse is eminent. It’s likely to happen this year and possibly in May or shortly thereafter.
Folks, I’ve been telling you this for years and it’s now finally coming to pass. I told you last week that I am not in the stock market and believe the upside potential is limited and too high risk for smart traders.
No one wants to believe it and the retail investors (public) continue to pile into the stock market at the urging of their greedy stock brokers.
When the smart money decides it’s time to short the markets, all hell will break loose and those invested will endure heavy losses, if not get totally wiped out.
If you are trading with me, stay alert for a signal to short the market (Buy Puts) on (SPY) (XLF) and (IYF). This blow off top could end at any time and it will probably happen in the futures market in the evening or weekend hours and surprise everyone when the markets open the next day.
Energy Stocks: (XLE) (UNG) (USO) (LNG)
I think oil is waiting for some catalyst to trigger a move in either direction. If the Trump administration rescinds the nuclear deal with Iran, that could cause a military reaction with US warships off the Iranian coast and, I know, that’s a suicide mission, but any stupid Iranian reaction could cause a spike in the price of oil.
Crude could go either direction, so I would wait for a break of either trend line before placing any positions.
Housing Market Stocks: (DHI) (TOL) (PHM)
I really expected housing stocks to retrace lower and fill the gap (Oval Circle), but interest rates have remained unchanged for the past few weeks and the housing bubble continues to be red hot. We had a Bollinger crash yesterday and the stochastic is showing weakness, so I expect at least a short term retracement to the current uptrend line shown below. If it breaks the uptrend line and continues down, then I expect it will eventually fill the gap created a couple of weeks ago.
The 10 Yr. Treasury is still trading within a stagnant channel pattern. Although hit pretty hard this week, we need to see it break the lower support line for continued downside risk. This will cause interest rates to inch upward and put additional pressure on the housing market.
Bitcoin Market (COIN)
Bitcoin is a digital currency that is quickly becoming mainstream. Bitcoin cannot be controlled by governments and that’s why governments hate it. It is controlled completely by free market forces and is currently soaring in value on par with the value of gold.
In China where people are worried about the value of the Yuan, the Chinese people are buying Bitcoin to protect their wealth and the result has caused Bitcoin to surge higher in the past few weeks.
There are several ways to invest in Bitcoin. You can own it outright by purchasing through an exchange like ‘Coinbase’. Coinbase is a digital exchange where you set-up an account and transfer dollars to exchange for Bitcoin. They also give you up to the minute value on Bitcoin with charts and graphs. You can find it here: https://www.coinbase.com
A new way to invest in Bitcoin may be through your stock broker or trading account. A couple of new ETF’s that hold Bitcoin are trying to get approval to trade on the stock exchange.
One such ETF is Winklevoss Bitcoin ETF (COIN) and it’s scheduled for approval on March 11th. If approved, this would make investing in Bitcoin much easier and should result in a huge sum of money pouring into Bitcoin.
This could spark a trading frenzy which would push Bitcoin to a much higher valuation in the months to come. If this ETF gets approval, we could see the value of Bitcoin come unglued and surge to incredible highs exceeding the price of gold.
A small investment here, though risky, might result in a huge gain.
(FNV) January 2018 CALLS (Or 1year from position entry.)
(GDX) January 2018 CALLS (Or 1year from position entry.)
(ABX) January 2018 CALLS (Or 1year from position entry.)
(GG) January 2018 CALLS (Or 1year from position entry.)
(DHI) Short DHI only if bonds continue to fall below 123.50 and hold.
A Great Crash is Coming: Virtually Everyone Agrees That Current Stock Market Valuations Are Not Sustainable
Current stock market valuations are not sustainable – A Great Crash Is Coming. It may not happen next week or next month, but it is going to happen. And when it does happen, it is likely to make what happened in 2008 look like a Sunday picnic…