Wow! In my now 38 years in the financial markets, I have never seen the first few days of a new year start off like this year.
- Two days of limit-down, halted trading in China’s stock markets
- 4% to 7% equity market plunges around the globe
- Saudi Arabia executing 47 dissidents in a single day, including a major Shiite cleric, and duking it out with Iran, threatening a wider Middle East War
- North Korea setting off a hydrogen bomb
All in the first week of the new year! Harbinger of what’s to come? You bet it is. As I foretold in last month’s forecast issue of my Real Wealth Report: “2016 will be the first full year of a five-year roller coaster ride through hell.”
That roller coaster ride actually got started in October of last year. That’s when I told you – in no uncertain terms – that the winds of a major global economic change were upon us.
And since then, the destructive economic winds have been steadily picking up, in almost every conceivable way.
This morning, global equity markets are down again – as much as 3.3% – across the globe. As I pen this issue (6:14am EST) in early pre-open trading, the Dow Industrials are down over 384 points.
Gold is still firming, but it needs to get above important resistance at the $1,107 level to confirm a breakout. Failing that, gold and the precious metals could just as easily start to slide back down.
I am watching gold very closely. If I feel it’s time to exit the bearish gold DZZ position – and reverse and go long – I won’t hesitate to pull the trigger.
The dollar and euro are largely going sideways now, but the dollar remains poised for another rally and the euro, another decline.
Oil is weaker than I expected, slumping again yesterday. And yes, you should have been stopped out of your shares in UWTI. That stinks, since all of my indicators suggest oil is very close to a bottom in terms of both time and price. If you are long the UCO call options, hold!
Also hold your shares in UVXY with a good-till-cancelled protective sell stop at $22.24. If not on board this position yet, for whatever reason, wait for my next signal on the stock market.
Yesterday, you should have been able to purchase Market Vectors Gold Miners ETF (GDX) at roughly $14.21. Hold. I am monitoring a stop for you and I will advise when you should enter it into the market.
Hold all other open positions and related stops.
New members: Be patient. I will help you get your portfolio up to snuff but wait for my specific instructions and/or new recommendations.
Best wishes, as always and stay tuned!
Larry
