Volatility collapsed this week after first round results of the French election on Sunday, plus renewed talk that President Trump’s tax plan is being fast-tracked.
As a result, stocks surged higher this week, with the Nasdaq notching new highs and the Dow quickly closing in on its March high at 21,169.
However, our E-Wave cycle forecast models tell us loud-and-clear that this rally is destined to fail, here’s why …
First, the second round of the French election is yet to come on May 7th, with the race between Le Pen and Macron still much too close to call.
A Le Pen win, or even a close contest that assures a divided government in France, is sure to trigger a reversal across key markets, with stocks heading south again.
Second, there are still plenty of additional factors that could stop this rally dead in its tracks including: In Europe, snap elections, in the U.K. on tap in June, and later this year in Germany.
Not to mention the geopolitical risks that continue to simmer in Syria, North Korea, China and tense U.S.-Russian relations. Any one of these factors could boil over, roiling financial markets in the process.
That’s why we recommend you buy volatility while it’s dirt-cheap by adding VelocityShares Daily 2x VIX Short Term ETN (TVIX) to your E-Wave Trader portfolio right away. Here’s what to do …
For ALL Members:
Using 5% of your funds allocated to this service, buy shares in VelocityShares Daily 2x VIX Short Term ETN, symbol TVIX, at the market. Place a good-till-canceled protective sell stop at $28.05.
Get this order in to your broker asap, continue to hold all open positions and stay alert for more updates.
Good investing,
Mike Burnick
