Watching the markets of late is a bit like watching paint dry. There isn’t a whole lot going on. The Dow remains in a tight but sloppy trading range, with a downside bias.
Gold is whipping around in a sideways fashion, along with silver and other precious metals like platinum and palladium.
Oil bounces a stair or two, then pulls back, but remains overall very positive. Natural gas remains weak, but is bottoming.
And perhaps the biggest news of all, the euro, is at least starting to slide again, breaking the key 1.0900 level this morning.
Overall, the lull in the markets, though, has not been good for your positions. Options values decline with time, and in reality, so do ETF values, due to the way they are designed and managed.
Nevertheless, I am confident not only that you are on the right side of these markets, but also that your positions are going to bloom for you, and potentially in a very big way.
This week in fact, is a turning point on my cycle models for many markets, which is perhaps why we are starting to see the euro this morning as the first major mover on the board.
Here is an updated neural net chart of the euro from my models, run earlier this morning (but based on weekly and monthly models).
As you can clearly see, the euro is following the model nicely, and now that it has broken the 1.0900 level, a further decline into mid-April should bring the euro much, much lower, which is great news for EUO and the longer-dated January 2017 $28 calls on EUO.
Naturally, as the dollar strengthens, we should see some downside pressure gather on the precious metals. I refer here again to last week’s chart of gold, showing just how sharp the decline may be.
We may yet short gold and silver, via put options or calls on an inverse ETF, but wait for my signals.
There is very little to do here at the moment. So hold all positions and related stops.
For stops that are expiring today with your broker – since today is the last day of the month – please be sure to reinstate the stop for the month of March.
I know you’re looking for more action, as am I. But trading just for the sake of trading is a losing proposition. So let’s not even go there.
I do see some opportunities coming up in copper, in emerging markets and in the grain markets as well, but wait for my signals.
Best wishes and stay tuned …
Larry
