I have absolutely no doubt in my mind that oil has already bottomed … and that it’s on its way to at least $40, if not higher, in the first leg up of what could prove to be a new bull market.
All of my technical indicators confirm it. My cycle forecasts, repeated here, confirm it. The extremely bearish sentiment in the oil sector confirms it.
You already own shares in UWTI and the April 2016 UCO $12 call options. I now recommend that you add another round of UCO call options, details in a minute.
First, a review of other positions and then on to my second recommendation.
Gold is holding its own, as is silver. A close above $1,103.50 (February futures contract) in gold would go a long way to confirming a further move higher and a close above the previous high at $1,109.90 would confirm a much larger move up to come.
Hold UGLD. I am monitoring the stop for you.
If not on board UGLD, using 5 percent of your trading funds, you may purchase it now.
Silver: Same overall picture, though a tad weaker than gold in the very short-term. Do not be surprised if you see one more minor selloff in silver before silver’s rally really gets going.
Hold USLV. I am monitoring the stop for you.
If not on board USLV, using 5 percent of your trading funds, you may purchase it now.
Euro: Still largely going sideways but with a bearish bias. It should break down hard, and soon.
Hold EUO with a good-till-cancelled protective sell stop at $24.33.
If you own the February $28 EUO calls as well as the January 2017 $28 EUO calls, hold.
If not on board any of the euro positions above, for whatever reason, wait for my next signals.
Stock market: Last week’s late market rally/bounce avoided an important sell signal, but it did not void it.
The rally was nothing more than that: A bounce. No overhead resistance levels or buy signals were hit. The bounce should run out of steam on Monday, Tuesday at the latest.
You have a protective stop locked in now that protects a modest gain in UVXY since the latest recommendation was to purchase at the $28.84 level and the new stop is at $33.58.
We should see another (sharp) leg down in stocks, with the S&P 500 ultimately moving as low as the 1,600 level and the Dow as low as 13,900 – heading into late March/early April.
I will look to get more aggressively bearish the stock market at the appropriate time/price.
Now, to my second recommendation for today: India.
India is one of the brightest economies in the world. Fully English-speaking with a population of 1.3 billion, it is now rapidly modernizing and gaining on China.
Prime Minister Modi’s policies have encouraged an open, entrepreneurial economy, conducive to foreign investment, a more transparent foreign policy and a large emphasis on infrastructure development.
In its latest fiscal global economic report, the IMF forecasts India’s GDP at 7.3 percent, the highest in the world.
Technically and cyclically, my work shows that India’s stock market is likely bottoming after a recent selloff that is about to buck other global equity markets, and that longer-term, the market should more than quadruple.
Shorter-term, over the next couple months, I expect a 20 percent gain, give or take.
My recommendation: Buy The India Fund, Inc. (IFN). Details below:
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For ALL Members: 1. Using 2 percent of your trading funds, buy the April 2016 ProShares Ultra Bloomberg Crude Oil call options, strike price $9.00 (UCO160415C00009000) at $1.95 or better, good till cancelled. Do not chase the market. If and when filled, I will monitor the position for you. If the limit price needs to be changed to the above order, I will immediately alert you. 2. Using 5 percent of your trading funds, buy shares in The India Fund Inc., symbol IFN, at the market. Place a protective good-till-cancelled sell stop at $18.43. |
Stay tuned and best wishes, as always …
Larry
