ALERT
Buy Reco Aim: Double Money Before 2020
Deepcaster’s Analyses indicate Key Sectors prepping to Launch Mega-Moves Very Soon.
See our Buy Recommendation aimed at doubling your money, or more, well before the end of 2019.
Check out our recent Letters and Alerts for our Analyses which provide the basis for our Recommendation this week.
“Fundamentals” and “Macro” Risks to the downside for Equities abound — China Trade, Mid-East Tensions and especially the Massive Unpayable Debts Worldwide are among them.
And the Mega Bank and Government “Interventions” are about to be overwhelmed.
And, though we never rely solely on Technicals, which at best, only provide probability, the Technicals now reflect the Fundamental, Macro and Interventional Prospects:
Consider
“Stocks were mixed to flat Monday, July 15th on low volume. Stocks are topping. Our key trend-finder indicators remain on a Neutral signal as stocks rise into their top. There are cycle turn dates suggesting a top will arrive over the next week or so, including a Bradley model turn date schedule for July 23rd, and a Fibonacci Cluster turn window occurring right now, where there are six former large tops or bottoms that are a Fibonacci number of trading days from this week into early next week.
“Stocks are closing in on the completion of large Megaphone topping patterns from 2017, and concluding small Rising Bearish wedge patterns from a month ago. There are Bearish and growing divergences between major stock indices and their 10 day average Advance/Decline Line Indicator and their Demand Power measures. There remains a 10 observation Hindenburg Omen on the clock through September 2019. We will have confirmation that the top is in once our key trend-finder indicators move to new Sell signals.
“Further, there is a Bullish Declining Wedge for the VIX which is either complete or will be this week, which is suggesting the VIX will soon rise toward 23 from its 12.39 level. A reading of 23 is correlative with strong stock market declines. …”
McHugh’s Monday Market Forecast Newsletter, July 15th, 2019, technicalindicatorindex.com
And another very Strong Short-this-Equities-Market Message is coming from the Junk Bond Market.
Momentum indicators are all making lower highs recently while Junk Bonds themselves have made Higher Highs.
Conclusion: A Trend change in Equities is imminent.
Get out and/or get short.
In sum, we are looking for a Major Equities Move Down.
Recommendation to Consider (Post Split Tranche Purchase)
SPXS (Direxion S&P 500 Bear 3X ETF) is a Triple Leveraged Short ETF on the S&P 500 now Trading at just less than half what it did in just the last 52 weeks. Therefore
Buy Recommendation to Consider:
Buy SPXS at $20 per share or better
CAVEAT: Costly Daily Slippage of Leveraged ETFs occurs when rolled overnight.
WARNING: This is a High Risk Speculation. Key Macro events (e.g., a Trade deal with China and/or other factors) could cause a serious drop in Value.
Best regards,
Deepcaster
July 17, 2019
ALERT
“No Bid” Crash in Key Sector(s) Coming Soon: Forecasts & BUY RECOS
Deepcaster and Key Independent Analysts are forecasting a Serious CRASH in a Key Sector in the Next few weeks, so serious that that Market will likely Freeze into a “No Bid” Status and cause certain other Markets to Crash and Freeze as well.
Presciently, J.P. Morgan Chase — the Mega-Bank — said a few weeks ago that the threat of illiquidity in the Markets was a Major Concern.
And it has been for Deepcaster for quite a while too — we were ahead of JPMC on that one.
Indeed, we have already seen the onset of illiquidity in the Eurozone in three Eurozone businesses as British Writer, Bill Blain of Shard Capital points out.
Much of his analysis below is applicable to the U.S. and other countries as well.
“Interesting markets y’day. European bonds were off to the races, perceiving new ECB head Christine Legarde as QE lower-for-longer dove who will continue to ease, ease and ease like Draghi. Bunds at -0.40%! Even Italian 2-year notes dipped below zero percent as the EU dropped threats to take action against the deficit. Some day we shall shake our heads in disbelief at that price…
“…The bottom line is financial assets remain absolutely distorted by QE asset inflation. While its [sic] been great news for the market, the real economy remains deflated. That’s what Jerome Powell and Christine Lagarde should be thinking about as they play with the monetary policy toolbox.
“Meanwhile, back in the real world, the chance of achieving real returns are getting more and more difficult….
“For the bulk of public funds, pension and insurance managers – the real money market – the doors on risk assets have been slammed shut. The well-publicised Illiquid asset problems at GAM, Woodford and H2O has triggered all kinds of market over-reaction. …
“It’s a two-way street. There are bad investments and there are bad investors. If you are invested in risky buy higher yielding instruments – be very aware of the risks, which includes being locked in if the market turns. Don’t try to pretend otherwise. Also be aware that when markets lock – as they did for financials during the crisis – nearly every bond asset ended up performing as expect and repaid. Sure a few struggled, but generally investors that had invested well and diligently got their money and interest back when markets reopened.
“I can’t comment on the reasons funds found themselves in trouble by investing in deeply illiquid assets. … It happens. I’ve seen some very clever investors buy some incredibly stupid things and walk away smarter people.
“All of which means investors are wracking their brains to work out how to generate any returns. If they buy liquidity – then they get effectively zero returns, and will be utterly reliant on Global Central Banks continuing to ease …
“But the brutal reality is no one is going to get their pension paid if European bonds carry negative yields and Treasuries just a smidge more. If you buy Treasuries, then you pretty much know they will remain a liquid investment in all circumstances. But, are regulators now going to classify corporate bonds and anything outside the FTSE or DOW as illiquid? Because that is what will happen when a market crunch comes. Markets will freeze, and just about every corporate bond on the planet will likely be ‘locked’.”
“Blain: When The Crunch Comes, Markets Will Freeze And Every Corporate Bond On The Planet Will Be ‘Locked’,” 07/04/19, via zerohedge.com, Bill Blain of Shard Capital
Critically important to note in this excellent analysis is that illiquidity in one Sector will spread to others and “Lock” them as well — a Real Disaster which will happen quickly.
Finally, in this regard, and even though our view is that “Technicals” only give probabilities, Note the Tech Analysis of Technical Indicator Index.
“There is a massive decline coming to the stock market. The VIX is finishing a Declining Bullish Wedge we show in chart on page 30. This is suggesting a rise in the VIX to at least 23. This will come only if the stock market plunges. We show large Megaphone tops from 2017 that are finishing a lot faster than we thought. This is a reliable topping pattern warning a powerful stock market plunge is coming once finished. At this time the upside price targets for a top are 27,250 for the Industrials, 3,100 for the S&P 500, and 8,200 for the NASDAQ 100. These are approximations but should be close.
“There are also smaller patterns, inverse Bullish Head & Shoulders bottoms, a small Megaphone top for the Industrials, an Ascending Expanding Triangle for the S&P 500, all with similar upside price targets. The timing for the start of this decline is dependent upon how fast these patterns and their upside price targets are reached. This should produce another 20 percent plunge, similar to what we saw last quarter 2018, not the gentle decline we saw in May 2019. Our key indicators will all move to Sells once this decline begins. There is a 9 observation Hindenburg Omen on the clock through mid-September. This is a potential stock market crash signal. Some catalyst will kick this decline off. We have been thinking the timing could be September 2019, but it is looking like it could start before then. …”
“Daily U.S. Market Forecast Report, Issue No. 3657,” 07/03/2019, Robert McHugh, technicalindicatorindex.com
The Freeze up and subsequent Crash only awaits a Trigger and we have identified several in our recent Letters and Alerts.
We have reported extensively on the fact that there is far too much debt in the world for it ever to be paid down given any realistic rate Scenario … so the Credit Markets will likely Freeze … followed by Key Credit Sensitive Equities Sectors.
So to Profit and Protect see our recent Letters and Alerts containing Buy Recommendations aimed at Profiting and Protecting as the aforementioned Scenario unfolds.
Best regards,
Deepcaster
July 9, 2019
ALERT
Key Sectors Turning—Forecasts: Equities; Commodities; US$/Euro, Gold & Silver; Interest Rates
Key Sectors are sending critical Turn Signals this week — essential to consider for our Forecasts and for Profit and Protection going forward. (See our Buy Recommendations.)
The US$ eroded from 97 basis USDX three months ago to 95ish now on economic weakness and Fed easing.
Key Turn Signals are revealed in Precious Metals and Commodities Sectors (see below) for which evaluation of Underlying Realities via Shadowstats provide essential Background in the Fiat Currency Context.
Forecasts
U.S. Dollar/Euro, U.S. T-Notes, T- Bonds, & Interest Rates
Bogus Official Numbers vs. Real Numbers (per Shadowstats.com)
Annual U.S. Consumer Price Inflation reported June 12, 2019
1.79% / 9.51%
U.S. Unemployment reported June 7, 2019
3.62% / 21.10%
U.S. GDP Annual Growth/Decline reported June 27, 2019
3.20% / -1.04%
U.S. M3 reported June 15, 2019 (Month of May 2019, Y.O.Y.)
No Official Report / 4.59% (i.e., total M3 Now at $19.527 Trillion!)
But since the $US and U.S. Treasuries are still the Least Dirty Shirt in the International Economic Laundry, the $US and U.S. Treasuries are relatively Stronger, for now. China and the Eurozone are relatively worse off.
But all, including the USA, are Vulnerable to The Great Debt Bubble! so it is not surprising that $US has weakened to 95ish in the recent quarter. The Greatest Bubble of all time — the Debt bubble — is about to burst; and several of the potential Triggers we earlier Noted — Interest Rates and the Mideast, Trade Tiffs and the worsening EU Crises and the Far Left and Deep State Attacks on President Trump and Now Crude Oil Price — have been activated. Compare the size of The Tech Bubble (2000-02, $15 Trillion), The Housing Bubble (2008, $30 Trillion) and today’s Debt Bubble (over $100 Trillion) and including Derivatives, over $550 Trillion!
Moreover, these numbers do not include all consumer or business Debt — many businesses and consumers are over-leveraged as a result of several years of Fed-engineered Easy Money.
That means the Debt (e.g., Bonds et al) can never be repaid without devaluing the $US via an orgy of Fed Money Printing (probably beginning in late 2019), Similar Situation in China where Debt is over 200% of GDP and in many Eurozone Nations.
Similarly, the Emerging Markets, EU countries, and China are all unsustainably over-leveraged and their Economies are weakening.
Significantly, The Fed stopped its tightening earlier this year since Liquidity (The Big L) was drying up from Fed Q.T. (Quantitative Tightening). Fed hints of loosening have forced the $US below 97 to 95ish basis USDX. Long-term, the $US is likely Toast anyway because, inter alia, the U.S. has unpayable Debt. And the $US has increasing competition as the World’s Reserve Currency from
- IMF-SDRs and
- Gold-Backed Chinese Yuan
- A 27-Country Consortium led by the Swiss
- And several of these Countries are creating an Alternative to the U.S.-dominated SWIFT System (the Monetary “Clearing House”)
- And now the Euro, according to Herr Juncker (but we seriously doubt the Euro’s long term viability).
But as the chart above shows, Inflation is just beginning to rear its Ugly head as reflected in the recent price rises in Crude oil and Commodities.
And, indeed, it is the Crude Oil Price which (against the Background of the Shadowstats Chart Realities) is giving us one of our two Major Turn Signals — Inflation is coming. See the Crude and Commodities Sectors below.
But the other “Turn Signal” is coming from the Precious Metals and specifically from Gold.
Gold and Silver
EXTRAORDINARILY INTENSE Cartel Price Suppression had forced the Precious Metals lower over the last few months and held them in a Narrow Price Range below $1300 for Gold and below the $15s for Silver until just a few weeks ago.
However, in recent weeks, the aforementioned Realities/Risks have begun to be acknowledged by the Markets. Results: Gold and Silver have recently started to launch (Gold to the low $1300s and Silver approaching $16ish) despite ongoing Cartel price suppression. The Great Launch has begun.
Current: as we have seen in recent days, the temporary strength in the Equities Markets post the Trump-Xi detente has given The Cartel a Takedown Opportunity again and has driven the Precious Metals back down again and will continue to do so! But these takedowns will be temporary and not even down to recent lows.
The Shadowstats data indicate coming Inflation and Economic Troubles and the Precious Metals Moves up recently reflect that. Indeed, Prospects for the Precious Metals price inflation are better than they have been for years.
IN SUM, Despite recent and ongoing intense suppression attempts, Gold has recently moved strongly back to over $1300ish per ounce and Silver well above $15. The Cartel has been unable to KEEP them suppressed! A Key Signal!
The Big Launch has begun, and will continue, albeit fitfully, with interludes of Cartel Price Suppression. Indeed, the prospects are excellent that The Cartel will be overwhelmed some month soon and the Precious Metals Bull will begin to soar to record Highs (see below). Consider what they have been, and are, up against. (See our recent Buy Recommendations.)
But important to Note, The Cartel Intervenors are still Active.
Recall the following report from earlier this year.
“…The quarterly report from the U.S. Office of the Comptroller of the Currency showing bank trading revenue …contains two remarkable graphs showing the increase in the notional value of gold and precious metals derivatives held by “U.S. commercial banks and savings associations” quarter by quarter since 2001.
“These derivatives, according to the charts, have increased for ‘foreign exchange and gold’ from about $4 trillion at the end of 2001 to nearly $40 trillion in the quarter ending in July this year, and for other precious metals from about $2.5 billion at the end of 2001 to nearly $50 billion in the quarter ended in July this year…
“The powerful implication here is that the trading of futures market derivatives through intermediaries, particularly JPMorganChase & Co., is the mechanism by which the U.S. government is suppressing commodity prices… [Emphasis added. Ed.]
“Why the gold (and FX) and the ‘other precious metals’ (presumably silver) derivatives have increased 10-fold and 20-fold in 17 years is certainly a legitimate question. Mine supply has of course not risen anything like this amount.” (JBGJ)
The JBGJ report on the dramatic $ Multi-Trillion increase in Precious Metals Derivatives indicates the increasing intensity of The Cartel’s price suppression in recent years and their increasing desperation.
Moreover, decreasing (relative to Demand) Mine supply of Gold and especially Silver and the fact that Russia, China, and India and now Hungary and Poland are all taking Delivery of Physical indicate that Gold and Silver will likely continue their launch up even more strongly at any time now, and we expect more such strength soon. In our view, Silver, ultimately, has the most upside but Gold has plenty of upside too. See our recent Buy Recommendations.
Indeed, Major Central Banks are beginning to seriously stock up on physical Gold. In that connection, we recommend you consider our DHPS Precious Metals Royalty play BUY RECO from late last year and our Silver Recommendations ¾ both have great gain potential and yield.
Also important to note, earlier this year, the Royal Canadian Mint embargoed Silver advertisements due to the intensifying supply shortage.
Thus, Technicals and Fundamentals for the Precious Metals are stronger than they have been for many a month.
Breakout Timing: Deepcaster has for months emphasized how dangerous the excessive Leverage around the World is. (And on November 28, 2018 Fed Chair Powell said that was the Fed’s #1 Worry!) Based on this Reality alone, the Next Very Few Months should see Mega Gains in Gold and Silver, though there are other drivers as well.
But inflation and Sovereign Debt are increasing and that means that many Debts which are becoming unpayable will be Unpayable and Unrefinanceable. And that will start a Debt Default Domino Effect and cause The Fed (and other Central Banks) to launch into QE (or intensify ongoing QE) again (see Equities). And that will facilitate the Breakout in the Precious Metals which cannot be capped — 2011 Highs will be surpassed for both Gold and Silver eventually.
As we forecast last November, the Breakout has nearly arrived. But we caution that The Cartel will still be intermittently successful in generating down legs.
Crude Oil & Copper & Other Commodities
The prospect of inflation, above-ground drawdowns, increasing political conflict risks including tensions with Saudi Arabia OPEC et al price fixing and the imposition of Sanctions on Iran, the Venezuelan Crisis ( with Maduro regime supported by Russian and Cuban Thugs) has caused Oil to bounce back toward $60ish and looking higher.
Indeed, it is likely Crude will continue to spike up again in the Near future because of any one or more of the following is coming or could occur, and/or worsen.
- Multiple Tensions in the Mideast and Iranian and Venezuelan Chaos and the Saudi debacle demonstrate the actual and potential Threats to the Oil Supply Market.
- Thus, the increasing Political Instability and thus supply interruption, i.e., Saudi Arabia, Iran and Venezuela is Threatening Supply
- A “Risk On” appetite is returning to the Markets (but likely not to last long) and
- As for “Fundamentals”, the OPEC production quotas not only holding but expected to be continued and the demand for Crude has increased and therefore, the Price. Thus, Higher Crude Prices (are in Prospect) from several Factors:
- The IEA indicated Demand is rising faster than anticipated and unanticipated above-ground supply drawdown, and
- Very Real Inflation (i.e., increasing $US Weakness) Expectations, perhaps the most important Driver! Along with Geopolitical Developments
- Anticipation of Greater Economic Growth (generally, resulting from an unjustified optimism) resulting from the Tax Reform Also resulting in higher Near-Term Prices
- Tensions with several producing Nations
- And, until recently, several straight weeks of declining above ground inventories
- And above all, until recently, the Crude Oil Price was up because it “smells” inflation coming! Energy is a good Inflation Hedge.
Bottom line: Looking ahead, we expect Oil Supplies to Tighten World Wide and they are especially because of the prospect of Iran Sanctions and Saudi Tensions and the collapse of Socialist Venezuela.
In sum, with WTI Crude approaching $60ish and Trending up, the long-term Crude Price Trend should continue to be up from here (subject to further intermittent dips on bad Economic News and Equities Markets Crash Legs) especially when The Fed starts printing Money from Helicopters (likely in mid to late 2019) in response to an Equities Crash Leg And Fed Q.E.
Moreover, the U.S., not Saudi Arabia, is now the swing producer because fracking becomes quite profitable when WTI is over $60. And, Many Investors still buy the Economic Recovery Narrative (false in our view), but that view will weaken as the Equities Debt Multiple-Crash Legs Scenario unfolds. Indeed, the weakening Sentiment has already begun among sophisticated Investors.
All the foregoing are why selected Energy and Precious Metals Subsectors and many Commodities (i.e., in Agriculture) are our Bull Sectors going forward.
Equities
The Background Analysis we provide for all the aforementioned Sectors provides the Backdrop for Equities also.
Since a China Trade Détente was consummated, Equities will likely make one more Major UP Move, a Move which has already begun. But such a development does not negate the Vulnerabilities outlined above. That is inflation and Equities Markets Crash Legs are coming in the next very few months.
And a Major Leg down will likely start when one of the Triggers mentioned above activates it. (See our Buy RECOS.)
Best regards,
Deepcaster
July 2, 2019
June 2019 Alerts are available at Alerts: 06/June 2019
May 2019 Alerts are available at Alerts: 05/May 2019
April 2019 Alerts are available at Alerts: 04/April 2019
For March 2019 Alerts, see Alerts: 03/March 2019
For February 2019 Alerts, see Alerts: 02/February 2019
For January 2019 Alerts, see Alerts: 01/January 2019